THOUSANDS OF WORKERS ALSO CASUALTIES OF UNION STRIKE
Although its vise grip on the American private sector has diminished in recent decades, organized labor is still a job killer in this country.
Just ask the Twinkie – a.k.a. the “Golden Sponge Cake with Creamy Filling.” Oh … and ask the 19,000 employees of Hostess Brands, who are headed to the unemployment lines as a result of a strike against the company organized by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (which represents 6,600 Hostess employees).
“We deeply regret the necessity of today’s decision,” the company said in a statement, “but we don’t have the financial resources to weather an extended nationwide strike.”
That’s true … Hostess filed for bankruptcy in January 2012 and has been struggling to make ends meet ever since.
As we’ve stated repeatedly, unions are a cancer on our economy – which is why they have been gradually weeded out of the private sector over the course of the last seven decades.
A total of 14.7 million workers – or 11.8 percent of the nation’s workforce – were unionized in 2011, according to data from the U.S. Department of Labor. That’s roughly the same number as 2010 – when unionized workers represented 11.9 percent of the workforce. Not surprisingly, government continues to keep these parasites in business – with 37 percent of the taxpayer-funded workforce currently represented by a union compared to just 6.9 percent of the private sector workforce.
Back in the 1940s the reverse was true – with 33.9 percent of the private sector workforce unionized compared to just 9.8 percent of the public sector.
***
54 comments
they made the ding dong too.
I thought Chuck Berry made the ding dong !
If this plays out like every other time I have seen unions discussed recently, a liberal will quote Reagan about the importance of unions, conveniently omitting that he was talking about private unions and specifically rejected the legitimacy or need for public sector unions. Then maybe someone will counter with the quote from FDR about the illegitimacy of public sector unions and the whole thing will devolve into ad hominem attacks.
No where in any of this will anyone seriously challenge the destructive effects public union contracts have had. I would challenge anyone who disputes the idea that public sector unions are parasites that are destroying their hosts to read 2 articles (from liberal sources, for those who love to immediately close your minds to anything in a remotely conservative publication):
1) the New Yorker article on the school unions documenting how impossible it is for NY to fire horrible (and I mean child abusing, drunk in class levels of incompetence) teachers. So they park them in “rubber rooms” with pay just to keep them from harming any more students.
http://www.newyorker.com/reporting/2009/08/31/090831fa_fact_brill
2) Michael Lewis’ article on destitute California cities. It reads like a Dante’s Inferno homage, where each city is worse than the last.
http://www.vanityfair.com/business/features/2011/11/michael-lewis-201111
Not to rain on your parade/diatribe, but what the hell does the Hostess dispute have to do with public unions?
Read Will’s post. He argues private unions are being weeded out, and it is only public sector unions that are keeping the percentage of unionized workers from declining substantially:
“Not surprisingly, government continues to keep these parasites in business – with 37 percent of the taxpayer-funded workforce currently represented by a union compared to just 6.9 percent of the private sector workforce.”
One more time before I give up. What in the hell does a privately held company in confrontation with a “private” union have to do with “public union” controversy?
Forget whether or not I favor or do not favor unions. That is immaterial to my question.
And by the way, a big chunk of the company’s problem is multi-fold not singularly ascribed to labor problems:
1) Declining sales, lower unit volume, and consequent higher unit costs
2) Declining retail and shelf space due to competition from newer products, healthy or not.
3) Eating habits of consumers who have cut sugar consumption as silly as that may sound
4) The giant sucking sound of fees and compensation taken out by vulture capitalist (I don’t have a problem with that to a degree. Hell I’ve done similar things myself).
Think water fall effect. Interstate Bakeries bought Hostess along with Ralston years ago. They were the worlds largest publically traded bakery.
Rising healthcare costs, unrealistic wage increases, rising commodity prices put in bankruptcy. They came out of bankruptcy and went private. same union, different management. Still could not convince the unions that the costs associated with their contracts balanced with commodity, energy prices would keep the company viable.
The unions want more “things” and the marketplace said no can do. Result? Close the company, cancel labor contracts, sell off in pieces. Who wins?
Comparing private unions with this example since it is no secret labor unions are moving onto state and federal workers (TSA), is that labor disputes will be settled with higher taxes. When revenues dip, the states and federal government will have to layoff or raise taxes or freeze wages or cut benefits. Throw in a collapsing dollar coupled with a 20% market correction and you have what? SC is on this road with private sector union wage scales, union healthcare plans adopted by the GA, protected by state law, a falling stock market, higher inflation. The only recourse is to raise taxes when revenues are falling, healthcare costs soar, state retirement funds drop. Outcomes are similar. I get what CL was saying. In fact, we see SC wanting to raise the sales tax in anticipation to a 20% loss or increase in all of the above and use better roads as the carrot. Our benefit package for employees is unsustainable when market conditions deteriorate. See Greece. See Interstate Bakeries.
Like
Higher commodity prices: think selling wheat to the Russians on the cheap and corn used for Ethanol fuel additives. Big government and big unions took down this puppy.
Please to explain your comment on selling cheap wheat to the Russians, Thomas. The only time I know of that we sold wheat to the Russians on the cheap was in ’72 and ’73 when their entire population was at risk of starvation from repeated crop failures and mis-spent money on arms. Since then they have paid the same market prices as any other importer of US wheat (damn near all of our trading partners get EX-IM financing, Food for Peace financing, or other Federally sponsored and subsidized funding.
As to ethanol subsidies…..you understated the silliness and absurdness of this waste. But you neglected to associate the promulgation of the program with Duane Andreas who made the Republican Party and the RNC a wholly owened subsidiary of ADM, and The American Farm Bureau who just may be the most prolific whore in the US. Their mantra is everyone should vote Republican, pay less taxes, consume more ground water, and assist their grip as one of the strongest and fewest in number lobby/special interests groups in the US and in SC. Only farmers, however, should be subsidized by direct transfer payments and subsidies using Federal taxpayer money.
“hands off”
That’s the free market approach.
Let both sides wallow in their stupidity/stew in their juices for a while.
A better run company will snatch up what’s left and salvage the remains-the management that run it into the ground and the employees that don’t want to play ball can all go stand in the unemployment line together.
Throwing this out there so someone who better understands labor law can hopefully reply..
Since we have OSHA, and employers have to abide by OSHA regulations, why do labor unions still have a place at the table, so to speak?
I know that unions were mostly founded to improve working conditions and to promote fair wages, but at what point do their demands add nothing but an extra layer over what is required by OSHA and any applicable local statutes?
I just don’t understand the appeal of unionizing, I guess. I’ve also been gainfully employed in the private sector since my early teens (age 13 to exact) if you count summer jobs.
Because resources are finite, and workers can gain a greater percentage of the pie if they negotiate collectively rather than individually. Walmart goes to great lengths to keep unions out because it would disrupt their entire business model of offering the lowest prices period.
And collective bargaining doesn’t apply only to economic benefits, but also to more mundane worker issues including seniority systems (which can relate to overtime and holiday pay assignments), promotions, shift scheduling, holidays, disciplinary systems, job responsibilities, etc., etc, etc.
As you note, labor unions arose in response to egregious employment practices, so if you think they cause problems for the U.S. economy, just wait until the Chinese labor force realizes that maybe its not in their best interest to continue to allow corporations to pay their 8 year-olds pennies per day to glue together $150 athletic shoes.
” just wait until the Chinese labor force realizes that maybe its not in their best interest to continue to allow corporations to pay their 8 year-olds pennies per day to glue together $150 athletic shoes.”
Welp, you have to realize the sad fact that working in a sheltered factory for a few pennies a day is a better life for many poverty stricken 8 year olds than say, combing through mountains of trash at landfills all day looking for food or bits of garbage to sell.
Of course, saying that is very “un PC” but it doesn’t change the reality now does it? (assuming you’ve traveled to enough 3rd world countries to see it)
That’s good stuff, BJ. Chinese labor force going union. I almost spit out some coffee on that one. I can only imagine Chinese government strike breakers will be slightly less kind than those we used to use here. And ours beat, crippled, and killed people.
First line. It’s vise grip, dumbass. Not “vice grip.” Aren’t you a professional writer?
thanks for catching that! we write “vice” so much in this state it has become a habit.
On the home page, have stories with teaser paragraphs and images. To access the articles, comment pages, forums for longer discussion, and a reference page with hundreds and thousands of links to vet stories and allow readers solid reference material to offer fact based replies is well worth the admission of 10.00 a month. For every tip that gets inked, limited free access. Pay wall this puppy.
Will probably thinking of his “vice grip” while watching internet porn . . .
$10 to read this blog? I think the Bakers Unions’ recent decision made more sense than this would.
Three sides to every story; yours, mine and SOMEWHERE in the middle, the TRUTH.
The firm is owned by several venture capital firms that have been extracting huge fees, adding millions in debt and taken the company into bankruptcy TWICE. During the first bankruptcy, they extracted large concessions from the unions which was supposed to be used to modernize factories and trucks but did not happen. The CEO was recently awarded a 300% pay increase.
(BTW: Romney and Bain Capital were early pioneers in taking a company private, extracting maximum cash and bankrupting the shell)
Do your own homework (read both sides) before making silly, knee-jerk, “Unions are evil” reactions.
TR
I’m sure Will was getting around to including that information also,he must have just run out of space.
Excellent post.
I will add this though:
The Teamsters union is urging the bakers union to hold a secret ballot on whether to continue striking. Citing its financial experts who had access to the company’s books, the Teamsters say that Hostess’ warning of liquidation is “not an empty threat or a negotiating tactic” but a certain outcome if workers keep striking.
Hostess, based in Irving, Texas, already has reached a contract agreement while in bankruptcy with its largest union, the International Brotherhood of Teamsters. But thousands of members in its second biggest union went on strike late last week after rejecting a contract offer that cut wages and benefits.
The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union said the company stopped contributing to workers’ pensions last year, and the union wants pension benefits restored.
usatoday.com/story/money/2012/11/15/striking-workers-defy-hostess/1708127/
So one union did say “Hey guys, they’re not fucking around, let’s hold a vote to stop striking.” Unfortunately, the other union was having none of that:
Wedrick Hollingsworth, business agent for Local 372-B of the bakers union, said union members took wage and benefit concessions four years ago and are unwilling to accept further wage cuts and reductions in health and pension benefits sought by the company. “It’s just too much for these employees to accept. We gave concessions four years ago.”
Sounds like Hostess was and had been financially fucked, bigtime, and while the strike may be blamed as the final nail in the coffin, you can’t lay the whole of the blame on unions. You can only cut your workers’ benefits so low before they get fed up, union or not.
It is also important to note the length of time the strike was under way:
The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike Nov. 9 after a bankruptcy judge in White Plains, New York, imposed contract concessions opposed by 92 percent of the union’s members. The union represents about 5,000 Hostess workers.
sfgate.com/business/bloomberg/article/Twinkie-Maker-Hostess-to-Fire-18-000-Close-After-4044206.php
They have been on strike for just one week. They were treading on thin ice from the very beginning.
Oh, and one more thing:
Creditors of Hostess Brands Inc. said in court papers the company may have “manipulated” its executives’ salaries higher in the months leading up to its Chapter 11 filing, in what the creditors called a possible effort by Hostess to “sidestep” Bankruptcy Code compensation provisions.
online.wsj.com/article/SB10001424052702304072004577323993512506050.html?KEYWORDS=hostess
Hey, we’re about to go bankrupt! Better lock in our pay raises now! Oh, by the way, we’re cutting everyone else’s pay and bennies.
Thank you Tricky Ricky, at least someone other than me has read that article.
Backs up your comments.
http://www.addictinginfo.org/2012/11/16/hostess-bankrupt-vulture-capatalist-picked-corpse-clean-video/
Those things were nasty and bad for you anyway? Do you remember the last time you ate a twinkie? Me neither.
Me neither. Moonpies, honey buns, and fried apple and blueberry pies were my weaknesses.
Darn! The company that produces Little Debbie snacks is not traded on the stock market. Those fuckers are going to make bank.
“Moonpies, honey buns, and fried apple and blueberry pies were my weaknesses.”
Pretty sure Hostess makes/made a variation of several, if not all, of those items.
I bet day traders are on that.
You do know that Moon Pies are only made for a short time each year, then warehoused and distributed as needed?
“Pretty sure Hostess makes/made a variation of several, if not all, of those items.”
And I’m real sure you’re right. And I am equally sure I used the past tense “were.” As in I don’t eat them any more nor do those in my demographic group, nor my kids, nor my grandkids.
Awww, aren’t you special. I doubt you know the diet of everyone in your family, let alone your demographic. But you keep thinking you do.
Awesome, somewhere, I bet M. Obama is ecstatic since this company would certainly have been in her crosshairs in her war against fat…. oh, who am I kidding, she’s probably insanely sad because of this closing…
I happen to agree with the two astute commenters on vulture capitals taking advantage of situations like this. (Tricky Ricky & Sweepin)
However, let us all remember that it’s the access to easy capital(aside from corporate structure manipulation) that drives their ability to leverage up companies beyond their ability to repay(and suck the virtual marrow out for themselves via fees).
And now for the “punch line” for some of you:
Why do they have access to easy capital?(and the ability to isolate themselves from the debt via corporate structure)
Because my friends,of the Federal Reserve. Our basic monetary system is flawed our woes exacerbated a la the Austrian Business Cycle. This is what happens when banks are prevented from failure and money created out of thin air. It’s called malinvestment with aspects of crony capitalism.
Let the cat calls begin. Carry on.
So, are you suggesting that the decline of the union presence in the private sector has corresponded with the widening pay gap between CEOs and their workers? Because that, my friend, would be quite accurate.
Good point!
I love it when a plan goes accordingly.
Union: Meet our demands or we strike!!!
Company: Nope, can’t afford your demands, shut the doors. Now you union folk will have time to go out and find another job. Merry Freakin’ Christmas!!!
South Carolinians have been brainwashed about unions their whole lives . . . look around and see what right to work has done here . . . I’d rather eat a union produced twinkie any day . . .
I’ll bet you eat cream filled twinkies from who ever will pop one in your mouth. The operational phrase here you used is “I’d rather” instead of “I won’t”. You’re real discerning.
They had 7 CEO’s in ten years and declining sales. While Little Debbie has had booming sales. It’s not the unions fault so much as bad management.
Facts aren’t allowed in this forum, Knott. Only innuendo and bullshit.
Turns out the CEO of hostess, Gregory Rayburn, got a pay raise of triple his salary to $2.5 million a year. Many others corporates at Hostess gave themselves huge pay raises.
http://www.huffingtonpost.com/2012/11/16/gregory-rayburn-raise_n_2147043.html
The management gave themselves pay raises KNOWING they were going out of business, and to suck every penny out of the company.
Knot, I am afraid you are wasting your time.
UNION YES!
Excellent point. I’m sure the standard conservative response to this will be “to keep top-knotch management you need to pay high salaries” and “you can’t raise their taxes because they are the job creators.”. Hmmm.
You have to think ahead. I took campaign contributions to the tune of $ 50000.00 in Twinkies instead of cash. Now I have more time to enjoy them – hourly.
Yo’ fat ass is a dead giveaway. You didn’t miss many chances to enjoy them over the last 18 years of service in the General Assembly.
I needed my fat ass for balance to keep me from falling out of my seat. It would have been embarrassing.
Don’t worry. Be Happy.
Mit Romney, aka Bain Capital, will buy Hostess and move the production of Twinkies to the steel mill in Georgetown.
The strategic Twinkie industry has collapsed? Oh dear, mein gott, oy vey, how will civilization survive?
Wake me when something important happens. Say like any threat to BBQ. Or tea.
Of course it was working people who killed the Twinkie. How about this as an alternate explanation: The costs of Twinkies, Ho-Hos, and other sweet junk foods are not the result of market forces. The cost of sugar in the U.S. is almost double the world price due to federal subsidies of sugar growers and restrictions on imports of sugar. In 2009 the free market price of sugar was $.138 per pound versus a U.S. price of $.272 per pound. Maybe it wasn’t “Big Labor,” it was Corporate Welfare that drove out the Twinkie? Don’t believe me; check out what the “raging liberals” at the Heritage Foundation have to say on the subject. Ever wonder why so many makers of sweetened products (Coke, candies, etc.) switched to corn syrup or relocated to Canada? The Fanjul brothers of Florida own both Florida Crystals and Domino Sugar. They spread money around between Dems and Reps — over $750,000 in the 2012 election cycle. The American Sugar Alliance, the lobbying arm of the industry, has spent $1.42 million this year alone. Wonder why these sugar laws, which were supposed to expire in 1940, are still on the books? Oh, but we Americans sanctify the “free market.” Don’t we?
Well! It appears that management and the baker’s union may meet for talks. Apparently the unions haven’t bled the company dry after all.
To blame Hostess’s troubles entirely on the union is not honest; there are many additional reasons, including the products themselves.
I feel sorry for people who think Twinkies are “edible”, “cake”, or “delicious”. My grandmother baked and sold cakes and compared to a real cake, eating a Twinkie is like eating a big glob of plastic.
Let them eat Little Debbie. Or Mrs. Freshley’s.
As is normal, period after announcement has brought out more facts about Hostess situation. To lay the blame at the union’s feet is just not factual. This company has been mismanaged for years and money sucked out by management,not union. Yes, union was tough to deal with, but concession after concession had been made. Wages for workers were down over 30% while management had big increases. And marketing of product was poor.