Hostess to close, lay off 18,500 after 'crippling' union fight

[morosco]

Posted: 11/16/12 at 10:55am

Wow.

Hostess Brands — the maker of iconic brands such as Wonder Bread and Twinkies — is shutting down and firing 18,500 workers after one of its unions refused to end a strike even after being warned it would kill the company.



Hostess Updated On: 11/16/12 at 10:55 AM

[Kad]

Posted: 11/16/12 at 11:01am

LOOK WHAT OBAMA HAS DONE.

[ErikJ972]

Posted: 11/16/12 at 11:07am

That link won't work on my computer but did it mention the 80% bonus upper management was being paid while workers were getting their wages cut?

[morosco]

Posted: 11/16/12 at 11:17am

Hostess is rotten!

From the Sacramento Bee:

The contract calls for extreme wage and benefit cuts which amount to 27- 32% overall, with an 8% wage reduction imposed immediately. The company unilaterally ceased making contributions, required by their union contracts, to the workers' pensions in July 2011. Hostess has also imposed draconian cuts in health benefits and eliminated the eight-hour workday.

Hostess Brands is in bankruptcy for the second time in eight years. Since the first bankruptcy in 2004, BCTGM members across the country have taken dramatic wage and benefit concessions and watched as 21 Hostess plants were shut down and thousands of jobs lost. At the time of the first bankruptcy, Hostess workers were assured by management that money saved via concessions or plant closings would help make the company stronger, more vibrant, and more competitive.

Instead, helpless Hostess employees watched as money that was supposed to go towards capital investment, product development, plant improvement and new equipment went to executive bonuses and payouts to the hedge funds that own Hostess Brands. They watched as the company illegally withdrew from all Taft-Hartley pension plans, saving more than $50 million in the first five months. The BCTGM learned that the then Hostess CEO was to be awarded a 300% raise, and at least nine other top executives were to receive raises ranging between 35% and 80%.

[Marianne2]

Posted: 11/16/12 at 11:33am

My mom knows someone whose husband worked for them. I don't know what he did, but his union decided to take a bad contract just so they could keep their jobs. The bakers strike ruined that for them. Now they have nothing.

[SonofMammaMiaSam]

Posted: 11/16/12 at 11:42am

Dimes to Hostess donuts that the execs and investors are all Republicans.

[Playbilly]

Posted: 11/16/12 at 11:59am

Looks like the Mayans were right. The world will end in December.

Bad for the workers, good for the America's health statistics.

[bobs3]

Posted: 11/16/12 at 12:01pm

I'm sorry for the employees -- but really, who eats that CRAP? I'm guessing it's the same people who eat Oscar Mayer cold cuts, Kraft Cracker Barrel cheese and Libby's Vienna Sausages. Really?

[Jane2]

Posted: 11/16/12 at 12:04pm

you must be kidding bob.

[bobs3]

Posted: 11/16/12 at 12:09pm

^^Not kidding. I am deadly serious. One of the reasons health care in this country is so expensive is because of rampant morbid obesity.

[Jane2]

Posted: 11/16/12 at 12:37pm

Oh lighten up, silly. Everyone knows that but most of us, even the thin and healthy ones,have enjoyed a Twinkie or two. They will be missed!

[wexy]

Posted: 11/16/12 at 2:17pm

And Mayor Bloomberg won't bail them out.

[strummergirl]

Posted: 11/16/12 at 2:32pm

5,000 out of those 18,500 workers are union members. It's always nice to know unions are still considered relevant in their toxicity for management types to be blamed for their mismanagement that is far bigger than them.

[artscallion]

Posted: 11/16/12 at 2:52pm

"It's always nice to know unions are still considered relevant in their toxicity for management types to be blamed for their mismanagement that is far bigger than them."

Can you rephrase this, Strummer? Not clear.

[strummergirl]

Posted: 11/16/12 at 4:54pm

Sorry for the confusion, artscallion. I'm very pro union but business climates that require the labor like at Hostess often dismiss Unions as unnecessary or irrelevant for this day and age because the struggle of wages was conquered and there is no reason to continue that struggle. Unions are suddenly relevant in discussions where business earnings drop off, because it is somehow the union and its members' fault. That's what I tried to write. Hostess and other businesses really only cares about unions when they need to blame somebody.

[Unknown User]

Posted: 11/16/12 at 5:12pm

Hostess has been on a downward spiral for years- sales are indeed down (as Bob's remarks demonstrate) and Unions are being scapegoated. I've seen many Facebook statuses blaming the Unions or Obama for "Killing twinkies"

It's illustrative to know that the bakers union had already taken multiple cuts in wages and benefits while upper management (and owners) were doing quite well. They had taken no cuts and the bakers had started at $680 a week three years ago- many of them were working for about $400 a week now and told they needed to sacrifice even more.

And it DOES NOT mean the "death of the Twinkie." Other bakeries are chomping at the bit to purchase the Hostess, Dolly Madison and Wonder Brands (among others) and re-launch them. What we know as "Hostess:" was at least the fourth corporate entity to make the Twinkie products.

[artscallion]

Posted: 11/16/12 at 5:19pm

Thanks, Strummer. I've been working double shifts all week. So my mind was fuzzy to begin with.

[Unknown User]

Posted: 11/16/12 at 5:43pm

Do yourself a favor and peruse the Google News page and see the right-wing media with headlines like the OP blaming the union without mentioning the "Venture Capital" firm that loaded Hostess up with debt, looted the pensions and will profit from the sale of those brand lines.

Chalk this one up to "Bain-style capitalism."

[trentsketch]

Posted: 11/16/12 at 6:02pm

Yeah, I'd buy the union fight argument if the company didn't let the mayor of St. Louis know in January that their production plant in that city was shutting down by the end of the year. They're saving face by blaming the unions so as to not taint the brands they're auctioning off to the highest bidder to cover bankruptcy proceedings.

[strummergirl]

Posted: 11/16/12 at 7:14pm

That's okay, artscallion. I just got off of work too.

Here's something that goes along with Joe's posts
http://sphotos-a.xx.fbcdn.net/hphotos-prn1/59065_10151315904196153_630530638_n.png

[TheatreDiva90016]

Posted: 11/16/12 at 9:35pm

So, years of a steady decline in sales is the Unions fault?

Yes, right.

Updated On: 11/16/12 at 09:35 PM

[winston89]

Posted: 11/16/12 at 11:08pm

I am very pro union and come from a family that has two generations of union orginizers in it. I am also someone who feels that in any situation blame should be placed on the proper parties. In otherwords, if this situation was the fault of the union (which it clearly isn't) then I'm all in favor of pointing the finger at them. But, considering that isn't the case, I think it's very wrong or the people on top to scapegoat them.

[Phyllis Rogers Stone]

Posted: 11/16/12 at 11:09pm

[iliveintherealworld2]

Posted: 11/16/12 at 11:33pm

Ok, now back to the real world... of course unions played a huge role in this. Was Hostess potentially the subject of mismanagement? I'll take your word for it. Would the company have eventually gone under regardless of this strike? Sure it's certainly possible.

However unions expedited the process! Hostess was in dire straits and instead of the unions coming to a compromise solely based on the reality of the situation, they let the entire company collapse. Now all of their members who are a part of Hostess are out of work. No matter what your response may be, this is the reality. No matter what management did in the past, the union's short term decision caused all of these employees to be laid off immediately. There is no spin as reality will always speak louder than any words. Everyone is now out of jobs.

And no this isn't "Bain-style capitalism". You do realize any venture capital or investment firm behind hostess will be hit hard? Paying their top executives lots of money and having those executives underperform is contradictory to what you think, bad for the VCs. At the end of the day, they're going to have to liquidate all of Hostess's assets to try and pay their debtors. And once that is all said and done, they'll likely take a massive loss on their investment. So this is all very negative for VCs. It was in their best interest to keep the company open as long as possible, but since union workers couldn't agree to a new lower salary and they stopped production during busiest time in the industry, VCs decided to cut their losses and not further widen the gap of debt. Responsible business decision.

Updated On: 11/16/12 at 11:33 PM

[Phyllis Rogers Stone]

Posted: 11/16/12 at 11:48pm

Wait, what happened to the first iliveintherealworld?