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.

Aren't the retirement benefits of unions put into a pension fund? Then why was if when the auto factories went out of business folks lost their retirements?? Was it like a ponzi?? Just asking because I don't know. My dad was union but he was born in 1900 so back in those early days of the 20 century...I'm sure unions helped folks get decent wages plus work conditions etc. But that being said...haven't we lost the need for unions? I'm just asking because I don't know. Seems that the higher up management of companies seem to benefit more than the workers in alot of ways.

Pension funding requirement were changed. The government changed the amount of funding that was required years ago. You'd be amased how many current day pensions are underfunded and how many have been raided to give bonuses to top Execs.Do a search of pensions,makes for sad reading.

I want to be on your team Patty. :smiley:

The pension fund is put into investment vehicles and many states and companies lost on the investment.( like any investor) Wall street loves to get a hold of pension funds. Some pension funds were sold a bill of goods by Wall Street.
Many pensions have language that fund can call back pensions if the company "needs" the money or goes bankrupt. That's why many companies and investors like bankruptcy because they make a great deal of money. There has been a very conscience effort to break unions so these shady contacts can be written. Its the high high salaries of the CEO's that breaks companies and wanting to move them to third world countries.
Unions are needed more than ever. Paying workers a decent wage will bring back this economy. Workers and their families spend money everywhere. Keeping workers in poverty and living with benefits cost every taxpayer money.
This company is a prime example of blaming the Union when it was really over the top greed at the top.(CEO's salary) This greed leads them to put their companies in third world countries where workers are slaves. The hell with America.
As was said its not that simple but I can tell you the rich own the media and spin for the rich CEOs.
Many many in the Villages have pensions from the North.
The poorest workers are in the right to work states with no union. (South) These people work hard every day and will always be in poverty (year earnings 15,000)and also need government help to not starve while the top one percent can't spend all they make. Pay cash for everything and will pass this money down to children who will make more money, Rich get richer.
What am I doing on a computer! Must get out in the sun.

skip0358 thanks for this post
 

Yes Yes yes. Add that to my comment.

Ummmm...anyone remember Braniff Airlines? Probably not...

:agree: The CEO"S are a higher form of life than the workers...they deserve more....they say so! Have you ever watched Undercover Boss and seen the CEO'S homes? And these are the same ones that will want to take away from their workers to cut costs so they can continue to live their lavish lifestyles. I always say, if you can't earn a living wage....enough to provide for your family, you might as well not work.

People were lined up for hours this morning in the Tampa area to buy the last of the Hostess Brand items at outlet stores. Most of the people in line looked like they didn't need more Hostess HOHO's. I say good riddance...eat an apple instead. Is this a great country or what?

Ummmm, some of you need to read Atlas Shrugged.

We're talking about 18,000 lost jobs with the Hostess demise. Sure wish they could have worked out a compromise.

I doubt if "Apple, Inc." will be hiring these ex-Hostess employees.

Hope the admin will allow this. I think it is germane to this conversation.

Whether we like it or not, or even admit to it, this country is now engaged in class and race warfare. This is evident in all walks of life, in all politics.

This mood of class is becoming more and more evident in business as well. Each class does not envy, does not wish to help, does not aspire for the other classes...they just demean them, no matter whether factual or not. We have accepted rich versus poor as an ongoing, never ending struggle and it becomes the basis for labor negotiations now as it never did before.

I surely do not know the answer, but listen.....hear... all the words you hear anymore define you and I as in one class or another...one race or another. We are not fellow countrymen anymore, we are rich or poor, black or white, illegal or not. There is no way to have a "melting pot" when the ingredients that "melt" are engaged in a "War" !!!

It is apparent when all you hear in the news anymore is color, financial status, etc.

THIS IS GERMANE to this discussion and is not meant to be political but what my understanding is of what is happening and it is not specific to labor negotiations

Bucco stated the core of this "cancer" growing in our society. I always want to ask, "Just what is accomplished by ENVY???"

If the worker does not like the injustice they see in management crooks getting rich while the workers' income and benefits shrink, why do they stay and insist this is the only job on the planet they can ever do or have for the rest of their lives?

People move all the time to find new jobs and career tracks, and the illegal alien workers are an example of that. If you're lacking opportunities, you have to move to where there is more!

I don't understand people thinking that there is only one job they deserve to have for their whole working lives....under one single employer they loathe. Isn't it up to the worker, also, to take the initiative to find another job or job track if this one stinks?

The answer may be that we live in a changed world. People have Televisions and computers and see stories of "the rich and famous". They see, therefore they want. And they're told they should get what they want. Of course a slow economy amplifies their discontent. Is it any more complicated than that?

Twinkies were selling last weekend on Ebay for $35 a box, maybe they were resellers.

That does not change the fact that they are being told they deserve and the other guy is bad and does not change the fact that it has become REAL class warfare in this country.

Trying not to be political, but can anyone recall election coverage ever mentioning so many voting BLOCKS defined by color, creed, sex, sexual orientation, country of birth, etc. ? Never AMERICANS !!!

Did anybody do the math?

The Hostess CEO that was making so much money that should have gone to the "little" guy was really a bad bad man! He should have worked for free and given all of his salary to the workers.

They each would have seen their lifestyle change dramatically when they invested the $138 per year that they would gain.

Much too logical !!

It is similiar to our deficit. Tax all the rich...that solves the problem !

Only problem is that EVERY SINGLE economists will tell you that it does not even pay for a day or two if you did it.

Same premise....the Rich guy is bad and is to be blamed. Poor working guy is a saint. OR vice versa.

It is what it is guys....we are in the middle of class warfare...I know it is not nice to say, but it will control us for years....there is much more of this union/mgmt stuff to come. How do you think the states are going to pay their teachers, etc in the next few years with all the new costs coming ?
Tax the rich.....

We are on a road and we chose it.....not sure where this leads

Nothing about the current state of bias, distrust, racism, and greed is any different from what has existed since the dawn of man. It isn't worse, as Bucco maintains. It isn't rooted in big business, unions, or in politics. It is the human condition, and it is GOOD that we are reminded of it.

Will anything good come after 112 workers died in a Bangladesh clothing factory fire yesterday? Those unfortunates could not escape a building which had no emergency exits. They made clothing for Wal-Mart and other American companies. It's the kind of incident which happened repeatedly in this country during our industrial revolution, and little was done until the tragic Triangle Shirt Company fire. The 'evil side' of the human condition is so deeply entrenched that it takes enormous attention, outrage, and then resolve to bring about significant change.

Ours is a great country because we have weathered evil, facilitated free speech to focus on it and worked to protect our people from it. Our history of social legislation is noble. We must insist that our government continue that effort. But despite the progress, the essential human condition will not change.

I know too many people use the word "rich" very loosely. They usually think about the guy who makes multi millions per year.

But just exactly what level of income = being rich?

Or if it is easier to answer....and if the opposite of being rich is being poor, then what level of income = being poor?

There alway was, there will always be the haves and the have nots. In the current phase (being polite) this country is going through it is in style to create class/race/religious/etc distinction for personal gain.
The 24/7 media is the real perprtetrator by continually pumping the class/race/religious subject.

What happened to being happy with what you have? No matter what there is and will always be some one who is either worse off or better off than you.

Money is not the only measure of the status of rich or poor!!!!!!!!!!!!

btk

:BigApplause::BigApplause::BigApplause:

This statement in bold, above, is what bothers me the most about all this class envy and division being nurtured: Freedom of Speech is not being "facilitated".....it is being killed by the purveyors of class envy!

Those stereotyped and labeled as "The Rich" (and who are also financially set because they are educated to think and work with logic, fact and reality) now are not supposed to speak in terms of logic and mathematical truths/facts as Indydealmaker did with this quote below. And when logic and mathematical truths/facts are silenced, ignorance, irrational thinking, and chaos rule!

Boy Howdy... Oh brother... you sure make many assumptions!!
I have no envy and don't know any of my friends that have envy. No use trying to argue with people who are so far off the topic of the thread.

I agree.

Yikes! All of this discourse because of no more Twinkies for a while! Someone will scoop up the salvageable parts of Hostess and life as we know it, will go on..

I feel your pain. And the beauty of the passionate discussions of the Hostess bankruptcy is that they can be conducted. There are many places where you would be arrested for expressing such strong opinions.

Sure, the management behavior seems like unbridled greed, and the union's decision to hold fast seems shortsighted, but we are not privy to all the facts. That's why we have a legal system - to sort it out. Our responsibility is to encourage the process, which thankfully we have many ways to do.

Mismanagement in a nutshell!
Now they will end up in Mexico and exploit the workers there!
Corporate greed and mismanagement is what destroys a company like hosstess.
I do think the bakers union should not of made it so easy for the company though. The company got exactly what they wanted. To loose the union workers and get thirteen dollar a day Mexicans.