Hostess threatens to lay off 18,000 employees unless strike ends[W:521]

AdamT said:

So your position is that management bears NO responsibility for the failed business? :doh

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They probably do . . . but since they're a privately-held company, they're reaping what they've sown. If the union couldn't get past the blame game, shame on them. "It's their fault!!!" WTF difference does it make if the company is going down?

The union could have chosen to bite the bullet and be part of the solution. They chose to become a part of the problem. Defined benefit pension plans are going to be the death of us. They really are.

What sense did it make to "fire themselves" from their jobs? Take the offer and look for new ones if you think you can do better...in the meantime getting a paycheck.

No? Okay then. No paycheck. Unemployment probably 75% of what the new offer was, if that. No healthcare. No pension contributions. These older guys who think their pension is safe? They are going to be in for a very pleasant surprise. What's projected they would earn at retirement? Frozen now. They were penny-wise and dollar foolish.

And I don't care whose fault it was.

Paschendale said:

And this is why unions exist. So that those who have money and power cannot exercise that power over everyone else with impunity.

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One word- SCABS

Don't want to work? We'll find someone who does.

:Oopsie:Oopsie:ws:Oopsie:Oopsie

MaggieD said:

They probably do . . . but since they're a privately-held company, they're reaping what they've sown. If the union couldn't get past the blame game, shame on them. "It's their fault!!!" WTF difference does it make if the company is going down?

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It doesn’t have to be about blame, or even who’s fault it is. I have walked away from business when someone my company (self-employed) was doing work for say “my sales have dropped, I can’t afford to pay what the contract says, you have to lower your rates, it is the only way I can make my business viable”. The hell I “have to”, that is not how market economies work.

EDIT: I understand this raises issues with the concept of unions. However there is pretty solid evidence of the concept having a lot of merit, adjusting for practical issues in free market economy implementation, the gap between theoretical and the ugly bits of the actual.

MaggieD said:

They probably do . . . but since they're a privately-held company, they're reaping what they've sown. If the union couldn't get past the blame game, shame on them. "It's their fault!!!" WTF difference does it make if the company is going down?

The union could have chosen to bite the bullet and be part of the solution. They chose to become a part of the problem. Defined benefit pension plans are going to be the death of us. They really are.

What sense did it make to "fire themselves" from their jobs? Take the offer and look for new ones if you think you can do better...in the meantime getting a paycheck.

No? Okay then. No paycheck. Unemployment probably 75% of what the new offer was, if that. No healthcare. No pension contributions. These older guys who think their pension is safe? They are going to be in for a very pleasant surprise. What's projected they would earn at retirement? Frozen now. They were penny-wise and dollar foolish.

And I don't care whose fault it was.

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Just playing the devil's advocate here because I think that most modern unions blow, but from the labor perspective -- big picture -- you don't have much bargaining power if you demonstrate 100% of the time that you will cave in and accept management's demands.

Hmmm interesting:

Rather, the issue here is the corporation itself. The first clue that something is a bit odd at Hostess comes from the company’s description of its chief financial officer, whom we are told:

is responsible for driving the planned priorities of the finance organization in both the front and back office and regularly collaborates with the marketing, sales and operations departments.

Resist the temptation to mock the consulting-firm-speak (“driving the planned priorities?”), and ask yourself what’s missing. Don’t C.F.O.’s normally work closely with the treasury departments, too?

Turns out that Hostess has no treasury department. It apparently doesn’t have anyone who can perform treasury functions at all.

The company has asked the bankruptcy court for permission to hire FTI Consulting to do the work. Apparently Hostess does not have much of a finance department either, since FTI is also providing employees for that department.

If approved, FTI will provide three people to staff Hostess’ treasury department. The interim treasurer gets monthly fees that work out to an annual salary of $780,000. His two deputies get $660,000 per year, each.

The finance department group gets paid hourly rates that top out at $895 per hour. You might think that would supplant the need for a financial adviser in the case, but Hostess is asking to retain one of those, too.

And then there is the $1.25 million completion fee that FTI will get at the end of the case.

At some point I think the creditors might want to consider asking Hostess to fill some of these positions the old-fashioned way. Or it might even consider taking out a Craigslist ad.



Hostess Has a Lot of Debt, but Few in Finance - NYTimes.com

Were these guys willing to take a pay cut?

I was trying to be sarcastic - sorry.

American said:

No, because Twinkies make kids fat.

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winston53660 said:

The finance department group gets paid hourly rates that top out at $895 per hour. You might think that would supplant the need for a financial adviser in the case, but Hostess is asking to retain one of those, too.

And then there is the $1.25 million completion fee that FTI will get at the end of the case.

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They don't have the money for 18/hr, but they do for $895/hr? That should tell you what's wrong with the company right there.

Damn Unions.....

AdamT said:

So your position is that management bears NO responsibility for the failed business? :doh

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What deserves a Doh!, is your response.

We are talking about the here and now. This management is not to blame.
The Union and it's members are.


From the link in the OP.
This particular Union wanted this to happen.



From the link Maggie provided.

rocket88 said:

They don't have the money for 18/hr, but they do for $895/hr? That should tell you what's wrong with the company right there.

Damn Unions.....

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$18/hr x 40 hours = $720/week
approximately 1/3 of the total work force = 6,167 employees
6,167 employees x $720 = $ 44,400,240 a WEEK in wages.

On the other hand, $895/hour x 40 hours = $35,800 a week, or about 0.08% of the total union labor salary.

Had the unions accepted the average $2/hr decrease in pay, the company would have saved $493,360 a week in wages, plus the additional savings in benefits. Significantly MORE than the cost of the 1 financial analyst they've asked to retain as they liquidate (a person they would sorely need for the process, I'd imagine).

rocket88 said:

They don't have the money for 18/hr, but they do for $895/hr? That should tell you what's wrong with the company right there.

Damn Unions.....

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And it seems like there finance dept wasn't quite properly set up.

tessaesque said:

$18/hr x 40 hours = $720/week
approximately 1/3 of the total work force = 6,167 employees
6,167 employees x $720 = $ 44,400,240 a WEEK in wages.

On the other hand, $895/hour x 40 hours = $35,800 a week, or about 0.08% of the total union labor salary.

Had the unions accepted the average $2/hr decrease in pay, the company would have saved $493,360 a week in wages, plus the additional savings in benefits. Significantly MORE than the cost of the 1 financial analyst they've asked to retain as they liquidate (a person they would sorely need for the process, I'd imagine).

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So they could save the whole thing with a layoff. Again, seems dumb to me to shut down the whole thing when it could happen otherwise.

Look, the Union is dumb here, but certainly mismanagement over the last decade or more seems to me to have more to do with their problems than a Union. Why let that get in the way of a good old-fashioned DP union-bash fest.

winston53660 said:

And it seems like there finance dept wasn't quite properly set up.

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But that has nothing to do with it...:roll:

Born Free said:

What your suggesting is that no company should ever go into bankruptcy. And if it does it's managements fault. That is as naive as it gets. One little example, you have one union shop competing with a nonunion shop with lower wages who's going to win? You have dumbass union workers that don't want to work with management so that company can compete, so the company is forced into bankruptcy. And how stupid is the union, they are now all out of work for good. And the new buyer picking up the pieces will not be union, that you can go to the bank with. Goodby more unions shops.

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Ya think...

AdamT said:

So your position is that management bears NO responsibility for the failed business? :doh

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Yes it is my position, I answered you in this post before.

"What your suggesting is that no company should ever go into bankruptcy. And if it does it's managements fault. That is as naive as it gets. One little example, you have one union shop competing with a nonunion shop with lower wages who's going to win? You have dumbass union workers that don't want to work with management so that company can compete, so the company is forced into bankruptcy. And how stupid is the union, they are now all out of work for good. And the new buyer picking up the pieces will not be union, that you can go to the bank with. Goodby more unions shops."

Excon said:

What deserves a Doh!, is your response.

We are talking about the here and now. This management is not to blame.
The Union and it's members are.


From the link in the OP.
This particular Union wanted this to happen.

2NEWS also spoke with Fred Frierson, a business agent for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents Hostess employees.

"If they liquidate, we feel like we could get a better deal with the new people that come in," he said. "Somebody's going to buy it. Somebody's going to pick that volume up that's out there, and we feel like we will be able to come up with a better deal than we've got now."​

From the link Maggie provided.

Hostess said the union chose not to negotiate on the bankruptcy court-approved contract earlier this year. It said union leadership was “giving its members a false sense of hope that a buyer would purchase the company if it liquidated.”​

Hostess assesses possible liquidation as two sides trade barbs - KansasCity.com​

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Speaking of potential buyers, I half seriously suggested that Hostess could have stayed in business by moving production to Mexico. I may have been more precient that I thought:

Next Twinkie Maker: Will A Mexican Billionaire Family Buy Hostess' Orphaned Brands? - Forbes

This will of course completely cut the union out. Those 18,000 jobs, mostly non-union, are dead and gone as far as US workers are concerned. All that's left for union supporters to do is point fingers.

And this leaves the senior managment without jobs, too. I don't know how much more sincere they can get about it.

rocket88 said:

So they could save the whole thing with a layoff. Again, seems dumb to me to shut down the whole thing when it could happen otherwise.

Look, the Union is dumb here, but certainly mismanagement over the last decade or more seems to me to have more to do with their problems than a Union. Why let that get in the way of a good old-fashioned DP union-bash fest.

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No the union management is the one that mismanaged the union, it is they that did not want to work with the company for them to remain competitive and a stable business. Now the dumbass union is out of work. Now tell me how stupid are they.

rocket88 said:

So you completely missed that they were in bankruptcy for being badly mismanaged? Of course you did...

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What difference does it make? The company could have continued if the union cooperated. The company had new management. But the union people dug their heels in. Ipso facto dead company.

Born Free said:

No the union management is the one that mismanaged the union, it is they that did not want to work with the company for them to remain competitive and a stable business. Now the dumbass union is out of work. Now tell me how stupid are they.

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It was dumb, but they're not the reason the company's going out of business. If it was, couldn't they have just closed up and moved to a right to work for less state. But they didn't.

It's a great excuse and it fits the righty narrative of "Unions are from the pit of Hell," but it just ain't that simple.

LowDown said:

What difference does it make? The company could have continued if the union cooperated. The company had new management. But the union people dug their heels in. Ipso facto dead company.

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It makes a huge difference. If they'd been better managed 5 years ago, they'd still be in business.

rocket88 said:

It was dumb, but they're not the reason the company's going out of business. If it was, couldn't they have just closed up and moved to a right to work for less state. But they didn't.

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No, actually, that would be illegal.

And costly. They filed for liquidation because with no product being made, they had no revenues, and couldn't continue. How were they going to set up shop somewhere else?

It's a great excuse and it fits the righty narrative of "Unions are from the pit of Hell," but it just ain't that simple.

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In this case, it pretty much is. Hostess wouldn't have needed to liquidate if the union hadn't struck. You're basically saying a bullet to the head isn't what killed an injured animal.

rocket88 said:

So they could save the whole thing with a layoff. Again, seems dumb to me to shut down the whole thing when it could happen otherwise.

Look, the Union is dumb here, but certainly mismanagement over the last decade or more seems to me to have more to do with their problems than a Union. Why let that get in the way of a good old-fashioned DP union-bash fest.

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I sincerely doubt they could lay anybody off without getting some sort of authorization from the bankruptcy court. And they would STILL have to shut down operations to hire and train replacement workers, which Rayburn has already confirmed was outside of the realm of possibility given the available assets and the timeline.

So I disagree with the contention that anything but a full return to work was a possibility at this juncture in the restructuring process.

rocket88 said:

It was dumb, but they're not the reason the company's going out of business. If it was, couldn't they have just closed up and moved to a right to work for less state. But they didn't.

It's a great excuse and it fits the righty narrative of "Unions are from the pit of Hell," but it just ain't that simple.

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Here you go:

"Hostess, based in Irving, Texas, filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than three years. Unlike many of its competitors, Hostess had been saddled with high pension, wage and medical costs related to its unionized workforce. The company also faced intensifying competition from larger companies such as Mondelez International, the former snack unit of Kraft Foods that makes Oreos, Chips Ahoy and Nabisco."

Read more: Hostess going out of business; nearly 18,000 to be laid off - Dallas News | myFOXdfw.com

Further, Texas is a Right to Work State

rocket88 said:

It makes a huge difference. If they'd been better managed 5 years ago, they'd still be in business.

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The reason they are closed today,the reason they are requesting the authority to liquidate today is because approximately 1/2 of 1/3 of the company decided to reject an 8% cut in pay. A cut in pay the bankruptcy court orchestrated and which 1/2 of the union employees agreed to, and a cut which the business managers believed could keep the business running.

So at this juncture, the 1/2 of 1/3 of the company, being led like sheep by their union bosses, is fully and totally responsible for the loss of 18,500 jobs. Since the new management took over in March, executives took substantial pay cuts and the restructuring process was in full swing with odds in Hostess' favor, assuming the unions cooperated with the realities of the current market. The unions chose not to, therefore Hostess is dead. They are most certainly to blame for the final shut down. And current management cannot be held to the fire to nearly the degree that the union members can and should be.

Those are just facts.

But yes, just like the others, go ahead and focus on what happened ten years ago as a means of avoiding placing the blame where it rightly belongs (hint: It ain't on Rayburn).

Excon said:

What deserves a Doh!, is your response.

We are talking about the here and now. This management is not to blame.
The Union and it's members are.


From the link in the OP.
This particular Union wanted this to happen.

2NEWS also spoke with Fred Frierson, a business agent for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents Hostess employees.

"If they liquidate, we feel like we could get a better deal with the new people that come in," he said. "Somebody's going to buy it. Somebody's going to pick that volume up that's out there, and we feel like we will be able to come up with a better deal than we've got now."​

From the link Maggie provided.

Hostess said the union chose not to negotiate on the bankruptcy court-approved contract earlier this year. It said union leadership was “giving its members a false sense of hope that a buyer would purchase the company if it liquidated.”​

Hostess assesses possible liquidation as two sides trade barbs - KansasCity.com​

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However you look at it, management is to blame for driving the company into a ditch such that it felt it needed to slash payroll to carry on.

Harshaw said:

In this case, it pretty much is. Hostess wouldn't have needed to liquidate if the union hadn't struck. You're basically saying a bullet to the head isn't what killed an injured animal.

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No, I'm saying a bullet to the head isn't what killed an animal that had already been run over by a bus. The immediate cause of death, perhaps. But anything at that point was just forestalling the inevitable.