Let's Not Be Ding Dongs About This
I wasn't planning on writing about unions this week. It really isn't one of my most passionate topics. But with the recent news of the Hostess liquidation – it is difficult to ignore what is in the front of my mind.
Hostess, the maker of the Twinkie, announced it is going out of business.
Courtesy of Hostess
Photos (2)
Photos
On Friday, the hedge funds supporting Hostess announced that they will start liquidating the company and that nearly 19,000 people will be losing their jobs. The decision came after a one-week strike by the Bakery Workers Union. More than 90 percent of the workers voted to strike even after the threat of a permanent closing. It is possible they knew the closure was inevitable and went on strike anyway to help save the contracts affecting employees at other bakeries.
There are a lot of fingers pointing at the union. However, it should be noted that this company was trapped in a crème-filled mudslide for a decade. Hostess has faced two bankruptcies under six CEOs in 10 years. They were already planning to close nine plants regardless of the strike; they have had escalating debt and consistently diminishing sales; and most interestingly, earlier this year, executives pocketed outstanding raises. The CEO was given a 300 percent raise from $750,000 to $2,550,000.
Other executives had raises as high as 80 percent. This is DURING bankruptcy preparations! That is like maxing out all the credit cards right before a divorce. Pretty shady. It has been a cellophane-wrapped recipe for disaster with or without a strike.
To be fair, the company’s top four execs did agree to work for $1 until the end of the bankruptcy, but with millions in the bank, who wouldn’t? These funds, barely keeping the doors open, are often referred to as vulture funds. They often swoop in and buy a failing company at an uber discount and when the façade of wanting to succeed is over, they sell it off. This is much like what happened when Bain Capital took over KB Toys in 2000.
While I believe in the benefit of unions, I sure wish we didn’t need them. I mean, there are successful businesses that are respectful and believe their workforce is their greatest asset, pay them a living wage, provide benefits, keep jobs in America and manage to gain hefty profits. Clearly, it CAN be done.
Wouldn’t it be nice if all corporations followed these philosophies? Unfortunately, we have seen far too much evidence of corporate leaders refusing to abide by that kind of honor system. We have witnessed the disregard for our environment and our people, not to mention the blatant abuses which are allowed or overlooked by American companies in other countries. We shouldn’t need things like unions and regulations and laws to keep corporations from exploiting the workforce and destroying our land. But, sadly, any progress we may have made as a human race – we have not been able to eradicate greed and its subsequent consequences.
Greed is awfully powerful. And it creates much evil in its wake. Seemingly good people can be corrupted by money and the fear of losing it. People begin to change their priorities. The more they get, the more they want. And pretty soon it resembles a junkie who will steal from anyone to get his next fix.
We have three branches of the government, committees, caucuses and departments. We do not put all of the power into one set of hands. Yes, the President is head honcho, but it takes a lot to get there and he still doesn’t have absolute control. So why should we put all the control into the hands of Lady Labor or Captain Corporation? Citizens United gave them a huge nudge in the direction of unilateral legislation. We cannot allow one or two groups to have the ultimate say in how we will live our lives, work and vote.
It is my belief that unions help everyone. They not only make working conditions and compensation better for union workers – they make these aspects better for ALL workers. They help set the status quo for employers everywhere. If corporations really had their choice on a five-day work week, an eight-hour work day or child labor – you can bet your bootie everyone would be working a lot harder and longer for a lot less. It wasn’t just union workers who benefited from those battles. It was everyone.
Do unions have too much power? Too much political influence? Is there corruption? Do we need transparency and accountability? You bet. To all of it. I am just asking that we do not throw out the baby with the bathwater.
Union leaders need to come to the table with reasonable expectations. They need to be open to transparency. They need to be held accountable for corrupt actions and lax policies. They need to demand professionalism and an impressive work ethic of the employees benefiting from their protection. Unions are not perfect and can definitely use some prioritization and introspection.
I believe this can work. I believe the two sides can, indeed, exist complimentary to one another. And I believe that the American workforce is counting on it. Because if unions dissolve completely – I also believe we are headed in a dreadful direction.
a quiet conservative
12:54 pm on Sunday, November 18, 2012
So the 372 Collective Bargaining Agreement, 5,500 routes that used different trucks to deliver Wonder Bread on one fleet of trucks, and the other fleet was only for Hostess Products.
The 40+ Pension plans did not help either.
The court order contract to have the Bakery Union return to work was not followed by the Union Leadership and even the Teamsters crossed the picket lines to keep the jobs (or Twinkies) going. Only fresh product sells and no Bakers...no Hostess
Stop blaming management when everyone failed in this endeavor. All oars in the water means the business moves forward....no oars and you go overboard.
Oh check this out
http://www.teamster.org/hostess
Ed Willing
9:43 pm on Sunday, November 18, 2012
Great facts and link QC!
Thank you for the information! It's amazing how Heather takes a couple of effective google searches and translates it into a diatribe that fits her predetermined meme perfectly. :)
You set the record straight by presenting ALL the facts. The CEO pay has nothing to do with the hundreds of millions of dollars involved, and into the future. Liberals very rarely grasp the concept of what a market demands for turn-around artists and men working 100 hrs a week to negotiate billion dollar deals.
Perhaps Heather would be happier in a semi-rural utopia where everyone has a job is happy, and gets a fair wage, and no one makes more than anyone else. I read about it in a book once.
C. Sanders
1:50 pm on Sunday, November 18, 2012
And we can't forget that a strike by 30% of the total union workers as represented by the baker's union closed the company with complete indifference to the demands by 70% of their union brothers and sisters that the bakers union come to an agreement and end the strike.
We can almost hear the members of the baker's union sitting at their local bar, telling everyone how proud they are that they stood their ground; destroyed the company and sent their teamster co-workers to the unemployment line. Well done to the baker's union.
Heather Rayne Geyer
1:53 pm on Sunday, November 18, 2012
I am not sure I understand. From what I can recall, over 90% of the unionized workers affected were in the Bakers Union not the other way around. Perhaps I am remembering that incorrectly - I will check.
Heather Rayne Geyer
2:11 pm on Sunday, November 18, 2012
You're right. I had that backwards. It doesn't really change anything I said...but thanks for the info so I could correct myself!!
James R Hoffa
2:15 pm on Sunday, November 18, 2012
Historically speaking, the Teamsters were always one of the better unions. It was the policy of my namesake not to engage in actions or contracts that would harm the long term viability of a company. He understood the delicate nature of the symbiotic relationship between ownership/management and the workers and respected the concept of profit. He also always personally acted to shut down any wild-cat actions. And while his methods may not have always been on the up and up, they were none-the-less effective. He was an outspoken supporter of Nixon and a registered Republican, because he understood that what was good for American business was good for American labor.
Unfortunately, the same cannot be said for a majority of union leadership today. They should all be required to read the book 'Hoffa: The Real Story.'
C. Sanders
1:59 pm on Sunday, November 18, 2012
Bakers union represented only 5,000 of the 18,500 member workforce
http://money.cnn.com/2012/11/14/news/companies/hostess-liquidation-thursday/
Doesn't seem too fair, huh?
C. Sanders
2:05 pm on Sunday, November 18, 2012
Think about a followup writing about the fairness of a minority component of a workforce (5,000 members of the bakers union) usurping the rights of more than 10,000 employees that don't belong to the bakers union, and how the 10,000 can only sit back and watch their company, job and livelihood destroyed by the defiant minority.
James R Hoffa
2:29 pm on Sunday, November 18, 2012
@C. Sanders -
We already know HRG's sentiments on such an issue of fairness.
http://mountpleasant.patch.com/articles/obamacare-not-on-menu-at-papa-john-s-local-protest-planned
According to her logic, the 13,500 workers that are losing their jobs because of the stubbornness of 5,000 are merely "casualties for the greater good."
Of course, Hoffa wonders if she'd feel the same way if her family was included in the 13,500 that wanted to retain their jobs at Hostess.
What Hoffa would like to hear from HRG is what "greater good" came out of this situation, as she really doesn't explain that in her editorial opinion.
C. Sanders
2:22 pm on Sunday, November 18, 2012
Greed cuts both ways as the middle class gets squeezed in the middle:
Top union chiefs' compensation has skyrocketed since 2000, with Union bosses increases ranging from 51% to 341%.
http://washingtonexaminer.com/top-union-chiefs-compensation-has-skyrocketed-since-2000/article/2505126#.UKlCeHy9KSM
Heather Rayne Geyer
2:25 pm on Sunday, November 18, 2012
Did you not read the full article?
James R Hoffa
2:34 pm on Sunday, November 18, 2012
@C. Sanders -
In fairness to HRG, she did acknowledge some of the problems with today's unions.
"Do unions have too much power? Too much political influence? Is there corruption? Do we need transparency and accountability? You bet. To all of it."
C. Sanders
2:37 pm on Sunday, November 18, 2012
HRG ...If I didn't read it, I would not have used it as a reference.
Heather Rayne Geyer
2:24 pm on Sunday, November 18, 2012
I don't believe for one second that Hostess would have been saved had they not gone on strike. Not for a second. Everyone knew there were going down. The management gnawed off what they could, illegally sucked the pensions dry and waited for the unions to stand up so that they could be blamed for the whole thing. Teamster employees made far more and had far more to lose. Perhaps they also wanted to come out of this smelling like roses even tho they knew the company would fail sooner than later. I think many motivations were at play and I doubt we will ever know everything that went on in those meetings and on those phone calls.
James R Hoffa
2:51 pm on Sunday, November 18, 2012
@HRG -
Really? Hostess is an iconic brand that America has been in love with for decades with a dedicated and loyal customer base, otherwise, we wouldn't be seeing the reaction that we currently are and boxes of Twinkies being sold on eBay for $50/pop. For the record, Hoffa is more of a Vanilla Zingers man himself.
With an efficient business model in place, Hostess was also capable of being very profitable, otherwise other business entities wouldn't now be interested in acquiring many of the products from their catalog. If the product was bad though, and failed to generate any kind of sustainable demand, then they'd deserve to fail.
If anyone is truly to blame here, it's Obama. Obama's auto bailout / give away to the UAW created a dangerous precedent that emboldened ideologically driven unions to play cat and mouse games such as this. It's no different than the fall of Lehman Brothers. Bank of America was interested in saving Lehman, but wanted the same deal that Jamie Dimon / JP Morgan Chase received when they saved Bear Stearns. The cat and mouse game was played out to its inevitable end, and without a government bailout, Lehman is no more, just as Hostess is no more.
Why did Obama feel that the auto jobs were worth saving, but not the Hostess jobs? If you were a Hostess worker that voted for Obama, wouldn't you be asking this question?
Again, what "greater good" has been created by any of these failures or crony/selective bailouts?
C. Sanders
2:55 pm on Sunday, November 18, 2012
HRG ... I always enjoy reading a post-mortem that uses phrases like "everyone knew", "I don't believe for one second,...".
Certainly, since this matter hasn't hit you personally in the pocketbook, it is easy and convenient to dismiss the truth, in favor of something/anything that supports the writer's ideology.
The minimal truth is, the Teamsters unsuccessfully appealed to the bakers union to hold a secret ballot to determine if the members wanted to continue the strike. A Teamster said it best ""We did everything we could to save the company," said Joseph Ortuso, a Teamster and sales route driver from New Jersey who'd been with Hostess or its acquisitions for more than two decades. "We never gave up during bankruptcy. We fought in the marketplace to retain our business. In the end, somebody else made the decision."
Your post-mortem will ring hollow to the 14,000 "non" bakery union and former Hostess employees when they line up tomorrow at the unemployment office a mere 6 weeks before Christmas.
mau
3:14 pm on Sunday, November 18, 2012
Unions are structured the same as corporations. Those at the top will still be at the top when this is over. They will have assured themselves a job at the expense of the rank-and-file. It would be interesting to see if those who advised the members to strike, made sure that they will still be well compensated. Just like in a corporation, union leadership is always on the look-out for new members. That will insure them more union dues and more power.
Greg
6:51 pm on Sunday, November 18, 2012
One union is blaming the other union, that should tell you something.
Brian Dey
6:51 am on Monday, November 19, 2012
There are a few comments here that need to be corrected in order to get a clearer picture. For one, as of January 1, 2012, 83% of the 19,000 employees were union. In July, there was 90% approval to strike by the rank and file. It is clear that the rank and file were okay back then to strike.
As recently as October, an offer of 25% ownership in the company, 2 seats on the board and a $100 million secured note was offered in exchange for a two year freeze in pension benefits, an 8% salary reduction and 17% health benefits reduction. Relying on the previous strike vote in July, the union leaders voted to strike on November 9. Without voting on the Oct. deal, the union leaders, not the rank and file bear the load for the strike decision.
Brian Dey
7:07 am on Monday, November 19, 2012
Another misconception, is that executives were given huge raises. The reference in the article would lead you to believe that these were salaries, but in reality, these were privately held stock options. In other words, if the company liquidates, these executives receive nothing. So these options were incentive to keep the doors open, not close them as the writer indicates.
I was also taken back by the writer's reference to vulture capitalists. It shows a clear lack of understanding who the owners are. A private investor, Ripplewood Holdings, invested $40 million, and two others, Silver Point Capital and Monarch Alternative, invested a total of $20 million and $15 million was secured through various debtors. None of these investors stands to gain anything out of liquidation and in fact, a successful turn around would have led to the investors getting only modest gains and they would have given 25% ownership to the employee unions.
Where is all this corporate greed?
And I really get a kick out of the writer's perception of the Citizen United decision. All this talk about fairness lately, and that is what the CU decision did. It gave corporations the exact same ability to free speech as the unions enjoyed for decades. Again, how is that unfair?
To be sure, this was a union decsion to close the doors, and the remaining 18,500 workers are left out on the street, while Trumpka remains a 1 percenter.
Tansandy
7:21 am on Monday, November 19, 2012
Thank you for some accurate information with statistics to back up your view instead of the typical liberal pro union talking points with no facts or figures!!!
Heather Asiyanbi
8:28 am on Monday, November 19, 2012
@Brian - do you really think the Citizens United decision was the right one? I would argue against it because corporations - and unions - are NOT people. They are a group of people and should not enjoy the same rights as individuals as listed in the Bill of Rights.
Brian Dey
12:18 pm on Monday, November 19, 2012
I didn't say it was right. I did say it was fair. What CU did was give the same rights to corporations as it had long given unions. So by definition, it made it fair because while both should be working together, they lobby for very different outcomes. Because unions usually put 90 or more percent of their campaign donations on attack ads for Democrats, left unchecked, that provided an unfair advantage for Dems.
However, and I have posted this time and again, I believe that any organization, or PAC should be banned from any ads referencing in any way, shape, or form any candidate for office. I think all messages for a campaign need to come from the campaign, and that all moneys donated are spent through the candidate. I also would take that further and say that only individual donations at a specific capped level can be used for campaigns.
Believe me, I didn't like the decision and was hoping for an outcome closer to my views. But if you are going to allow one, you have to allow the other. Until that day comes, it is the only fair way to proceed.