• Quick note - the problem with Youtube videos not embedding on the forum appears to have been fixed, thanks to ZiprHead. If you do still see problems let me know.

Hostess workers strike may kill company

Once upon a time, when I was a young engineer filled with dot-com era optimism and pro-business ideology, I spent several months working for a struggling startup for "deferred pay." I was the last engineer to find another job and quit. Wouldn't you agree that, despite having work to do and some money owed to me in the company's books, I was a sucker?

Maybe, but it would depend on all the details you haven't shared. Anyway, it doesn't seem like it's really analogous to the Hostess situation.

Maybe everybody who worked there were suckered in with a fraudulent sales pitch by the founders, and you were one of the last ones to wise up.

Maybe you were a sucker in the sense that you didn't realize that startup ventures fail more often than not. All the other engineers knew what they were getting into, and moved on once it became clear that the risk:reward ratio of this particular venture was seriously upside down. Maybe you were only a sucker because you believe you were a sucker; everybody else understood and accepted the risks.

Anyway, the Hostess strikers aren't being asked to work for a dot-com startup and get paid in IOUs. So to whatever degree you were maybe a sucker, they're probably less of a sucker than that, if they take the Hostess deal.

ETA: And there's always the possibility that the suckerdom goes the other way, in this case. The striking employees could have been suckered into believing that a strike was the best choice at this point.
 
Last edited:
Well, I'm just pointing out that there are limits to the idea, that taking what the management offers for the company to continue operating is a reasonable thing to do.
 
When the situation at a job becomes intolerable, why should people continue to work? At some point the cost, in terms of everything, becomes more than the cost of not working.
 
I have taken up the hobby of watching old movies on TCM (Turner Classic Movies -I forget people around the world see this and might not have this channel. It is a cable channel that shows commercial free, unedited movies usually from the 1930's to 1960's, and occasionally older movies clear back to first one-reelers from 1912, and a few newer movies). There are a couple of other channels w/old stuff but mainly TCM (wow, sorry so off topic just to set up my viewing habbits.... sorry)

Anyway I really like stuff from early 1930's, when America was dealing with prohibition and the rampant criminal mobs that flooded America. One theme in a lot of these is the small business guy being visited by some thugs to join the local ”Businessman's Protection Society”. These (usually in the movies) ”mom-and-pop” stores were told that they needed to ”join” these organizations to protect themselves from criminals. They had to pony up what was usually a lot of money for them, and if they refused, at first windows were broken and eventually it was legs that got broken or the store burned down. These ”protection” rackets were commonplace back then, until of course in the movie either the FBI, or the ”hero” brought them down. Of course these are movies, but it is hard not to see parallels between these ”rackets” and unions today.

In all fairness, another common movie theme back then was poor/dangerous working conditions for little pay. But, today, if anything, employers deal with outrageous rules sometimes to make conditions safer. In the 50's it seems like gangsters found that they could still extort businesses, but do it legally by forming a ”union”. This is proven by the undeniable fact that many union were, and still are, run by people of ”questionable” character and intentions. What was a great idea at first, asking for a ”living” wage, and safe conditions now results in outrageous labor costs, and a company losing the ability to get rid of bad employees. Many of the companies that have found that the unions have made the cost of labor so high in the US they ship jobs overseas. I think it is great to see a company take a stand, and it is stupid for workers to pick the worst economy in US history, along with huge unemployment. Where do these folks think they will find another job?

Of course ”union leaders” are willing to gamble with their members jobs. As union reps, they are paid from the dues of everyone around the country, so who cares if a couple thousand jobs are lost to ”stand up” for their union rights. You got people literally giving 10+% of their paycheck to support union leaders making hundreds of thousands of dollars/year. It is nothing but old fashioned ”protection”, but instead of breaking a window if the business doesn't pay, the workers will ”strike”. I think you will see more and more companies tell unions to ”get lost”. Hell, why would a company keep factories open when any profits left after paying the extortion, will now be taxed to hell. Why not downsize, save the jobs for people that are just happy to have them. And, open a plant in Mexico where people appreciate being able to feed their kids. This is where America is going. The government is regulating and the unions are extorting, and its just not worth risking money here to try to grow a business. Take the money you would have spent opening a factory and employing 1000 people, and buy a company overseas where making a profit (the ultimate goal of EVERY business) is not a crime.

The scariest part is that the fastest growing sector of Union workers, is GOVERNMENT employees. That means that WE are paying a janitor $27.50/hr, plus another $20/hr in benefits and pension. And when the janitor is caught putting video cameras in the womens bathroom, and smoking crack in the broom closet, he gets paid leave fir fully paid drug treatment, and then gets more paid leave for therapy for his ”personal issues”, and if he is fired, he sues for ”wrongful termination”, and ”settles” out of court because it is cheaper to pay him six figures then pay lawyers to fight him in court.

Why are people so blind to the idea that when a union comes in and increases wages and benefits, its not a ”win” for workers. It means that the added cost of the union will be reflected in the prices of whatever they make. And when the ”union” is representing government employees... you are just increasing the amount of money YOUR children will be on the hook for in higher taxes for life. The ONLY people really seeing the benefit is the union leaders who can now hold ”retreats” with more hookers and booze.

uh...what?
 
Unions have access to the same 'books' that employers do. Dividends drive large business, liveable wages drive unions.

My wife received a tamagotchi recently from a Japanese visitor which was a box of Tokyo Banana. Similar to Twinkie, but incomparably better.

Oops, I meant omiyage. (instead of tamagotchi).
 
Last edited:
Now, I'm no expert on labor relations nor contracts, but on a common sense level it seems that it's better to take a pay cut than it is to lose your job entirely doesn't it?

Superficially, yes, and I'm sure that's the message the employer would like to get out there.

It all of course depends on the full picture - which isn't in the full article. If the employees are being asked to take pay cuts but management are getting better and bigger bonuses at the same time then I can see that there may be a reason to gripe. If the pay cuts take wages below a living wage then I can see that there may be a reason to strike. If chapter 11 is being used as a tactic to restructure the business but the pain isn't being shared so employees are being asked to cut wages while creditors are being paid 100% of what is owed then I can see the union having a legitimate complaint.

Here's a .pdf summarising the union's position

http://bctgm.org/PDFs/HostessFactSheet.pdf

Summarising some points from their rather one-sided view:

  • Hostess have failed to pay pension contributions - apparently in contravention of federal law
  • Hostess employees have made concessions since 2004 amounting to $110m, this money has not been re-invested in the business
  • The 6 CEOs since 2004 have increased their own reward by 300% at the same time as asking employees to take pay cuts

Hostess is owned by a private equity company and hedge funds so I can appreciate why they want to perform this restructuring. I can also understand why they have failed to invest in the business and I can see how this annoys the workers.


eta:

from another press release:

Striking members know that the Wall Street investors currently in control of the company have
no intention of building a world class wholesale bread and cake company. They will simply take
the money from the workers’ severe concessions and the sale of assets, pay themselves and then
liquidate the company

http://bctgm.org/PDFs/NationalStrikeHostessBrands_11_9_12.pdf
 
Last edited:
Well, I'm just pointing out that there are limits to the idea, that taking what the management offers for the company to continue operating is a reasonable thing to do.

Well, sure. You probably didn't even need an example, to get agreement on that point. All I'm saying is, the example you gave doesn't really support the point. There's really no way of knowing if the management in your example were making a reasonable offer or not.

Hopefully Hostess would lay out a compelling, evidence-based case for why their offer is reasonable, and should be supported by the union. And hopefully, if the union didn't agree with the offer, they'd lay out a compelling, evidence-based rationale for why they rejected it.
 
Unions have access to the same 'books' that employers do. Dividends drive large business, liveable wages drive unions.

My wife received a tamagotchi recently from a Japanese visitor which was a box of Tokyo Banana. Similar to Twinkie, but incomparably better.

Oops, I meant omiyage. (instead of tamagotchi).

Any relation to Mr. Miyage??
 
Superficially, yes, and I'm sure that's the message the employer would like to get out there.

It all of course depends on the full picture - which isn't in the full article. If the employees are being asked to take pay cuts but management are getting better and bigger bonuses at the same time then I can see that there may be a reason to gripe. If the pay cuts take wages below a living wage then I can see that there may be a reason to strike. If chapter 11 is being used as a tactic to restructure the business but the pain isn't being shared so employees are being asked to cut wages while creditors are being paid 100% of what is owed then I can see the union having a legitimate complaint.

Here's a .pdf summarising the union's position

http://bctgm.org/PDFs/HostessFactSheet.pdf

Summarising some points from their rather one-sided view:

  • Hostess have failed to pay pension contributions - apparently in contravention of federal law
  • Hostess employees have made concessions since 2004 amounting to $110m, this money has not been re-invested in the business
  • The 6 CEOs since 2004 have increased their own reward by 300% at the same time as asking employees to take pay cuts

Hostess is owned by a private equity company and hedge funds so I can appreciate why they want to perform this restructuring. I can also understand why they have failed to invest in the business and I can see how this annoys the workers.


eta:

from another press release:



http://bctgm.org/PDFs/NationalStrikeHostessBrands_11_9_12.pdf

Sounds like the normal I am used to. Strike now and make the bosses have a big pay cut.
 
The proposal that the union rejected was a combination of wage cuts and benefit cuts and pension freeze for two years, that would be used to pay for equipment upgrades. Then the cuts would be relaxed in the third year if revenue picks up.

A question that the bakers face is, whether they can hold out for those two years (or more) at the proposed wages and benefits or whether the cuts are so severe that they might as well leave for other work. The company will suffer from the strike, but it will also suffer if it loses many bakers through attrition.

Since the Teamsters section of the company's workforce accepted the proposal, this isn't quite a case of "them darned unions" and "their mentality."

Don't start injecting facts into a dogmatic tirade against unions now.
 
Of course the problem is any CEO capable of turning a failing company around is not going to come cheap, and any competent management personnel can find work elsewhere and thus often have to be paid more to take the risk of being left on a sinking ship. Unskilled workers are fungible.
 
Superficially, yes, and I'm sure that's the message the employer would like to get out there.

It all of course depends on the full picture - which isn't in the full article. If the employees are being asked to take pay cuts but management are getting better and bigger bonuses at the same time then I can see that there may be a reason to gripe. If the pay cuts take wages below a living wage then I can see that there may be a reason to strike. If chapter 11 is being used as a tactic to restructure the business but the pain isn't being shared so employees are being asked to cut wages while creditors are being paid 100% of what is owed then I can see the union having a legitimate complaint.

Here's a .pdf summarising the union's position

http://bctgm.org/PDFs/HostessFactSheet.pdf

Summarising some points from their rather one-sided view:

  • Hostess have failed to pay pension contributions - apparently in contravention of federal law
  • Hostess employees have made concessions since 2004 amounting to $110m, this money has not been re-invested in the business
  • The 6 CEOs since 2004 have increased their own reward by 300% at the same time as asking employees to take pay cuts

Hostess is owned by a private equity company and hedge funds so I can appreciate why they want to perform this restructuring. I can also understand why they have failed to invest in the business and I can see how this annoys the workers.


eta:

from another press release:



http://bctgm.org/PDFs/NationalStrikeHostessBrands_11_9_12.pdf

That is really disgusting. No wonder the union is striking.
 
I look forward to hearing the management view. From the union pov, it looks pretty damning.
Until the management comments, here's an opinion from the Teamsters, who appear rather disappointed by the bakers' decision.

http://www.teamster.org/sites/teamster.org/files/111212nov13memberupdate2.pdf

Also, I don't feel like digging up the link again, but the vote on the contract happened a while back, and at the time the management accused the union leadership of misrepresenting the situation to the members, claiming that there was a prospective buyer when there wasn't, and so forth. It could explain why the bakers came to a different conclusion from five other unions.
 
Last edited:
so the Teamster's are pretty sure that an extended strike means Hostess will be through, and they also seem to think that the change of mgmt and increased oversight will make Hostess a solid company again if given the chance.

No, they don't seem happy with the Bakers Union at all do they?
 
If a company is owned by private equity and/or hedge funds there are a number of ways in which the owners can extract money from the business which may not be in the best interests of that business. These can take the form of very high interest loans, excessive management fees or large royalty payments for the use of intellectual property.

Alternatively the owners can just to a "full Glazier" and borrow money to buy a business and transfer all the debts to that business.

Of course this may not have happened in the case of Hostess but in the interest of balance it's important to point out that it's not always a case of Owners = Good, Unions = Bad (or vice versa).

In the UK there have been many cases where the owners of a business seem to just be extracting maximum value for themselves rather than attempting to run a profitable enterprise (Rover was a good example).
 
Except that it is utter crap.

Do you say this because you have evidence to the contrary?

Do you say this because you can't believe that the owners of a business would act illegally?

I am genuinely interested in whether you base your exclamation on reasonable evidence or whether it is just a knee jerk reaction.

Would you agree that there can be two sides to the story and that perhaps the management might be just as bad as the unions, or is this beyond your comprehension?
 

Back
Top Bottom