Tags
Bakers Food and Allied Workers Union, Bankruptcy, bonuses, Ding Dong, employee compensation, employee relations, Hostess Brands, labor, Los Angeles Times, New York Times, unions
Hostess Brands’ website boldly announces:
Hostess Brands is Closed. We are sorry to announce that Hostess Brands, Inc. has been forced by a Bakers Union strike to shut down all operations and sell all company assets.The company claims that its demise is a result of:
. . . an inflated cost structure that put the Company at a profound competitive disadvantage. The biggest component of the Company’s costs was its collective bargaining agreements that covered 15,000 of 18,500 employees.
In other words, we’re going tit’s up because of the damned greedy production workers. This ignores the reality that the company first entered into Chapter 11 bankruptcy in 2004 and since that time has won repeated give-backs from its unions. That first bankruptcy proceeding resulted in lost union jobs and reduced wages and benefits but did nothing to stabilize the business model or to improve management procedures. In fact, the company failed to update its product line or to modernize its facilities. Constant CEO turnovers added to the chaos. A second bankruptcy, filed in January of 2012, did nothing to stabilize the 82 year old company, but it did result in nearly $2 million worth of pay packages for top executives who “meet budget goals during the liquidation process.” The current CEO, Gregory Rayburn, is making $125,000 a month! I live on not much more than that for a year!
freshchocodiles.com
Throughout my life, I’ve had a troubled relationship with labor unions; I know, intimately, the problems that lurk within a unionized labor unit. But there is something inherently wrong when a handful of suits can walk away from a broken company with their lives in tact and bonus packages that would feel like a lottery prize to the people who counted on a livable retirement after investing more than 20 or 30 years of their lives producing the goods. Once again, we see executives walking away with a fistful of dollars on the backs of workers, whose lives have been turned completely upside down and often too late in life to recoup.
Yes, it’s easy to blame everything on the guy at the bottom, but it’s a cheap shot. The guy at the bottom is less crafty, less eloquent, and looks less important. But without the guy at the bottom, there is nothing to support the guy at the top. When will we absorb this fact?
Sources: The New York Times http://dealbook.nytimes.com/2012/11/16/hostess-brands-says-it-will-liquidate/ Idaho Statesman: http://www.idahostatesman.com/2012/11/29/2363160/hostess-to-seek-approval-for-executive.html#storylink=cpy Candice Choi – AP Food Industry Writer The Los Angeles Times: http://www.latimes.com/business/la-fi-hiltzik-20121125,0,966735.column by Michael Hiltzik Bakery, Confectionery, Tobacco Workers and Grain Millers International Union http://www.bctgm.org/newsblog/the-latest/
Rangewriter 
I read where the CEO and a few other top executives made sure they nearly doubled their salaries as they were planning to file for bankruptcy, locking in huge gains for themselves while at the same time bargaining ferociously with the unions to try and make them eat the companies losses. Talk about bad faith. Never mind the fact that Hostess never responded to health-driven market changes over the last decade and a half and so have lost market share annually as fewer and fewer people were willing to eat their crap.
This is not to say that the unions were faultless. Requiring two different workers to load/unload cakes and breads from delivery trucks, etc. is ridiculous. When unions actually demand inefficiency to get “what’s theirs” they’re just asking for it. I really wish they’d wise up and stop insisting on the kind of stuff that just makes them look bad. I think organized labor it so important, especially these days with the growing oligarchy, but they have to factor productivity into their demands, too. Just a rant. 🙂
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I couldn’t agree more with you regarding union’s having their heads up their butts. For most of my career I was a scab simply because of the very ridiculous demands that you cite. Towards the end, though, I began to see a deadly, heavy-handed power grab on the part of business and management. I reluctantly joined the union because I could see workers’ rights eroding globally. In almost all cases of labor-management disputes wonderfully positive changes are possible if only both sides of the equation would sit and listen to each other’s needs. However, just like Congress, that seems to be impossible in this age of knee-jerk, wise-assed, headline-grabbing rhetoric.
Thanks for contributing, Dia.
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Well said. The unions don’t have the “spin doctors” that the suits have.
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So true, Sybil.
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Perfect
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Thanks for visiting.
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The older I get, the better I understand the basic tenets of Communism.
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True. As with all “isms” it all comes down to how it is managed. Unfortunately communism got a black eye thanks to the power moguls who used the concept as a mask for their own evil ways. The basic tenets, as you say, make a lot of sense, as does, Socialism.
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Imagine what impact there would be if those going to “negotiation” school (both management and union) were taught positive communication techniques designed for trusted & clear disclosure, problem solving, developmental proposals and commitment to win-win.
(I saw a friend’s manual from his Shop Steward’s negotiations workshop. One suggestion was to find some indiscreet family matter and casually throw it onto the table. I was seriously shocked. Must be modelled after political platforms, I realized.)
Yes, it would take a commitment to change from both sides. It would be a HUGE decision. Impossible? It is if that’s how we continue to think.
If we use the same old, same old…as a certain Dr. would say…”How’s it workin’ for ya, folks?!”
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I agree with you, souldipper. It’s difficult to believe that no compromise would have been acceptable. On the other hand, there isn’t really a thing made at that factory that serves us well. Perhaps Twinkies could have been used to fill potholes, though.
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Funny! Too squishy, though. Can you imagine riding your bike over a Twinkiehole and getting sprayed with white glop?
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Amy, I think at one time, labor management styles in the US were headed in a more positive direction. However, I think the tremendous greed of the 1990’s corporate explosion ended all that. Now, the bottom line is the only line. Corporate CEO’s and boards are interested only in short term, immediate profit. Their defense always comes down to, “what if you owned stock in my company? If you failed to reap high rewards, you’d jump ship to some other stock which provided higher yield, so we have no choice but to put the bottom line first.”
Unfortunately Hostess is not alone. And you can bet that after a nice six month vacation in the Bahamas, Gregory Rayburn will be back at the helm of some other company to “meet the goals of liquidation.”
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That would be interesting to watch…think we can let him know some very savvy women are watching? Might scare the behiminey out of him! 😀
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I wish. I fear the only thing that would scare him is the complete collapse of Wall Street. Sigh.
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It saddens me when greedy people get away with what they want.
You’ve captured it perfectly in saying, “But without the guy at the bottom, there is nothing to support the guy at the top.”
On a different note, how do ding dongs taste like?
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Nel, what a great question! Here are some interesting facts for those not raised in America. Hostess products are some of the most incredibly bland and unhealthy things on the grocery shelves. They are so filled with saturated fat, refined sugar, and preservatives that they seem to have an infinite shelf-life. (Which SDS is referring to in the next comment.) Their flagship product, Wonder bread, was THE bread of the 1960s. It is a pure white, nearly crustles product, with texture more like marshmallow than bread. When I was a child, my mother wouldn’t have the stuff in the house, so of course, I craved it and loved going to friends’ homes to eat Wonder bread which I could roll up into a gummy ball. (Yuk…I can’t even believe that this appealed to me, but it did.) Another interesting thing about Wonder bread: now when adults refer to a “white bread community” like my own, they are recalling this flat, tasteless, characterless white bread. In other words, a predominantly white, Christian, community with few to no ethnic people, foods, customs, or religions. Thankfully, Boise is slowly growing more colorful.
Later, when I was in college I became addicted to Ding Dongs, which are made with a spongy “chocolate” cake filled with a white cream of dubious substance and covered in a shell of chocolate frosting. I ate these things for breakfast, lunch, and sometimes even for dinner throughout my freshman year. No wonder I later became a lardo! It has been suggested that there is some sort of addictive element baked into Hostess products. I wouldn’t argue.
Another interesting fact: In the early 80’s a murderer’s defense hinged on the fact that he’d consumed too many Hostess Twinkies, thereby diminishing his mental capacity and self control. http://en.wikipedia.org/wiki/Twinkie_defense
Truly, the world won’t end with the demise of Hostess. But the lives of the many employees who worked in the Hostess manufacturing plants may end.
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Well said. When I heard that they had approved enormous bonuses for the upper mangement and elite, while continuing to try to represent the problems of their management skills as being union related, I wanted to hurl twinkies at their heads. I have never been a fan of any of their waxy tasting products and will not miss them – but I do feel for the workers and their unions who are taking an unfair media blow. Thanks for correcting this.
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Teehee. If you hurl twinkies at them, you might to load ’em with pebbles. Otherwise it’d be too much like a pillow fight. 😉
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As always, the guys at the top are being overpaid and rewarded for what mostly amounts to sheer luck, while the people who actually do the work face losing their homes and life savings. I’m an optimist, though, and I still think Twinkie the Kid is going to ride in and save the day.
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I need an optimist in my life! Thanks for the cheery prediction.
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In response to Bronxboy, I’m all for the guys at the top, luck or no, getting paid a motivating salary. Otherwise where would the incentive be for the guys moving in at the bottom? Where would be the incentive to go to school to get a good job? Also, it bothers the hell out of me when labor unions demand ridiculous pay for completely unskilled labor. Reminds me of the time, when I was a teenager, that I was hired to sweep floors for $23 per hour. I liked the pay, but that was seriously stupid on somebody’s part.
When companies are either forced to outsource or forced under because of labor union mandates, I get irate. But it doesn’t really seem like that’s at all what happened to the Hostess company.
This company was giving massive bonuses and salary increases to its executives even while they were on the verge of ruin! What ever happened to cutting back on the spending during tough times. Sure you’ll lose some guys here and there, but the real company men are going to stick it out, irregardless.
I believe that conservatives are jumping the gun way to fast by faulting the labor force in this company’s demise.
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Yes, I’m for getting paid a motivating salary, but not a salary that strips the capital from the operation, not a salary that is based on squeezing dry all the human and mechanic assets from the operation, and not a salary that is 200 times (or more) above what the producers make.
And I know exactly what you mean about outrageous union demands. This is why I was a scab for the better part of my career. But, in the final years, I realized that my own organization was behaving just like corporate America… feeding the egos and 3rd homes of a bunch of idiots who didn’t know their asses from their kneecaps, on the backs of employees whose every step was timed and recorded, included bathroom breaks. It became way too uneven and that is when the only alternative is to bury your differences and work together, to help each other, and to look out for each other. Believe me, it was very distasteful at times.
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