Numbers in the News (Hostess and Unions)
 

"The Hostess union turned down an 8% pay cut to take a 100% pay cut?"

-- Wall Street Journal, 11/24

While it sounds illogical it is probably not that simple.

Yea and management took no cuts and will be there to the end.

If they go bankrupt, then there will be no management either???? In this economy, I think everyone has to try to give a little, so everyone can at least survive. Seems to me the union made a wrong decision, when they represent all their members!! If someone buys them out, does union workers keep their job and benefits???

Here's what's wrong with big buisness
 

Over the past eight years since the first Hostess bankruptcy, BCTGM members have watched as money from previous concessions that was supposed to go towards capital investment, product development, plant improvement and new equipment, was squandered in executive bonuses, payouts to Wall Street investors and payments to high-priced attorneys and consultants.

BCTGM members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.

Over the past 15 months, Hostess workers have seen the company unilaterally end contractually-obligated payments to their pension plan. Despite saving more than $160 million with this action, the company continues to fall deeper and deeper into debt. A mountain of debt and gross mismanagement by a string of failed CEO’s with no true experience in the wholesale baking business have left this company unable to compete or survive.

And it's always the workers or unions fault. Please !!!

I'm not putting any blame on anyone, but why give up a permanent paycheck when the economy is so bad? I just dont like to see people lose jobs, because of decisions of a few, that hurt many. Lets hope someone can buy the company, and some of the workers can come back. Right now, NOBODY won!!! But a lot have lost, and the union too.

You are right. So many buy the promises and lose the ability to feed their family. Something is better than nothing.

but you will never convince a die hard person who thinks the unions are always right. There are a lot of crooked people in the unions too.

In hard times compromises must be made. The high ups in the unions make a ton of money too. No group is all right or all wrong.

I get it and thanks for posting. We have a robber baron situation.
Easy for people in the baby boom generation to judge when they never had the situation these workers are in. Look further, this CEO has more compensation than all the workers put together!!! Not one contact with the workers was in good faith.
A company with suppose money problems doesn't give the CEO a 300 percent raise to 2,550,000!!!! The CEO made sure he put this company in bankruptcy. The CEO could have just increased his compensation 200% and saved the company. Closing this company will make this CEO even more money as he sells rights to the product.
Blame the worker who was saving this company money each year with their cut backs!!! Plain to see its the fault of the greedy who wanted this company to fail.

They see a worker as a peasant or a slave.

I just hope somebody takes over making Yankee Doodles.

Agree I WAS a union worker and retired in 2009. My retirement was just changed because the union had to take concessions this year whlie the CEO who vowed to break the union got a BIG FAT RAISE and now gets 65K per day. That's right per day but he got the concessions he wanted and the workers and retirees took it on the chin.

I agree it's never that simple. Have you noticed as the unions have been shrinking so has the middle class. Something to think about.

I Don't mean to make an argument here but, truth be told the unions have just gone too far. As a third generation union man I have seen the times when the unions were the best thing that ever happened for the workers but, over the years their demands put one company after the other out of business. When I began my career there were 7000 men in my union. We had 13 major companys under our jurisdiction plus many other smaller companys all within a fifty mile radius of New York City. Today, there are only three major companys in our jurisdiction and only a handfull of small companys left and two of the major companys are in chapter 11. Of the 7000 men that I started with only 600 remain. Oh sure, they have great jobs and terrific benefits but, 6300 jobs went out the window and one more failure and this over 100 year old union will be gone. My pension is vested so i and some other retirees will be safe but, many others will lose everything. Common sense needs to prevail in negotiations, you can not get blood out of a stone.

Just kind of makes you wonder if the whole dang country is being run by crooks!:throwtomatoes:

:BigApplause: Exactly spot on. I have seen it on both ends. Management does have some ridiculous money increases, salaries, and ineptness in running a business. The "mommy or daddy boy/girl behind the scenes in management, good ole boys, and suck ups.). But I can also tell you from first hand experiences with unions that their leadership constantly berated their membership behind their backs, laughed at their requests, made obnoxious monies, huge stipends (from union paid cars such as a corvette, monthly clothes allowances and expense reports out of this world, and salaries not open or "divulged totally" to members. They don't want to give up those perks either since they are "entitled" to them. But they were elected like politicians and look what we have there!
The unions had there place years ago when management abused workers. In recent times though, it got to a point that they won many concessions and just looked for more so they could justify their existence to the contingency. That to hurt businesses. salaried and union employees/retirees both have taken large losses recently. Unfortunately due to what is talked about and the times.
I am not taking either sides but saddened by the loss of more workers. No one wins when a company goes under due mismanagement and union stubbornness. Just more unemployment and hard times for families.

The power struggle between workers and management has been going on for a long time. When the unions first started to gain power, there was a real need for them to protect workers. The pendulum of power swung to the side of the unions in the 50's and 60's and some of their demands have resulted in harm to many companies and the people they employed by saddling those companies with a higher cost structure. Now, as power has shifted away from unions and back towards management, combined with an economy that forces us to compete globally against 3rd world labor, we will start to see abuses by management that will once again make unions more attractive. This change may not occur in my lifetime, but the pendulum swings both ways. Unions have ceased to be an issue in this country. Only a very small percentage of workers belong to a union. While labor costs are part of the Hostess issue, mismanagement and changing tastes are a bigger piece of the pie (pun intended). What is a bigger problem in this country seems to me to be the rising disparity between the compensation of workers and management and our rapidly shrinking middle class (the rich are getting richer and the poor are getting poorer). At one time, unions were what made our middle class, but I no longer believe they can do that again, simply because they they interfere with the free market by artificially raising labor prices above supply and demand levels, therefore decreasing the competitiveness of companies. Bu there has to be another solution than paying our workers 50 cents a day to compete with Vietnames workers or complete automation to eliminate all workers, I just don't know what it is.