In Harsh Economy, Union Demands Put Crimp in Businesses Across the Country: Recent Stories Surrounding California Grocer

The biggest union news this month is the pending closing of the Hostess Brand snack cake corporation, a company that has been an American mainstay for decades with such products Wonder Bread and Hostess Twinkies. As with the Hostess case, unions repeatedly prove that they’d rather destroy a business with absurd demands and strikes than work with management to keep the company alive in these tough economic times.

Another Illustration of the continued and alarming trend of unions destroying the businesses they work for with absurd contract demands is going on in California, the state with the worst economy and one of the worst business climates in the country.

Recently Raley’s Family of Fine Stores, a north central California-based grocery chain, and the United Food and Commercial Workers (UFCW) reached an agreement over a strike that had workers walking the picket lines for nine weeks. Naturally, the company put a brave face on this agreement but both the strike and the agreement have put a strain on the company that can’t help it survive in this horrid economic climate.

The California economy, one of the worst in the nation, was already hurting the grocer before the union decided to make an attempt to squeeze blood from the stone by forcing a strike on the company. The company had reported that many of its locations were already losing money — to the tune of millions per year — and even took the unusual step of allowing union reps to look over the books to prove the fact. Naturally, despite the facts being made readily available to them, the union continued to deny that Raley’s was in dire financial straits.

Some of the demands that the union made on the grocer were ridiculous. In one instance union bosses demanded that Raley’s give “amnesty” to any employees that were caught assaulting customers or engaging in property destruction during the strike.

The union also demanded that the company pay striking workers a “signing bonus” to get them back to work. And why not, Safeway — another grocer in the area — paid it. But, imagine that! The union thought it was fair that they’d quit working, then demand that the company pay them bribes to return to work! That isn’t a negotiation, it’s outright extortion.

And while the union is claiming the financially stressed grocer is stingy and must pay employees more, the local UFCW head is living the high life off the backs of the union’s membership. It is reported that Jacques Loveall, President of the UFCW in California, makes over $274,000 a year. Loveall is also featured as one of the top entries in a list of Sacramento’s highest paid executives. I’ve even heard that this union bigwig drives a Lamborghini and has put a private plane at his disposal. The apple didn’t fall far from the tree, either, as Jacques is just carrying on the “family” business inheriting his throne from his father, who enjoyed similar perks at the expense of real working men and women. A real man of the people, that.

This particular strike also indulged a loathsome practice that is becoming commonplace in strikes throughout the nation: the use of non-union people, often paid below minimum wage, to walk picket lines. Imagine this situation, won’t you? A union strikes because members feel they aren’t getting paid enough yet not only are they not interested enough in their own strike to walk picket lines themselves, they hire scabs to do the picketing. And then the union pays the scabs peanuts to do the picketing. This hypocrisy is happening in strikes everywhere, not just California.

This strike is reminiscent of another recent strike of a grocer in Tacoma, Washington. In a strike against a small downtown grocer — the only grocery in the whole area — even those who would have nominally supported the strikers got sick and tired of the whole situation. In that case the company was hurt and so were the customers.

Unions are wearing out their welcome all across the nation, it seems.

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  • Hank_M

    I’m hard pressed to come up with anything a union, whether private or public sector, has affected in a positive way in my lifetime.

    Unions are a relic of the past, destroying our future.

  • http://www.shockandblog.com/ Jay McHue

    And even though thousands of people are suddenly out of work, these morons will still claim victory because they are completely, utterly and stupidly oblivious to the fact that their extortive tactics are what ruins companies.

    • Carl

      If it’s reached the point where Hostess or any other company can’t stay in business unless they take food out of the mouths of their employees and children then their business model is severely flawed.

      Free enterprise heals all. Another company will expand to fill the niche left behind, some other bakeries will likely buy Hostess’s facilities and hire back workers – and God forbid operate it profitably and with care and concern for their employees.

      I’m just amazed that the right has sympathy for the faceless corporations and disdain for the hard-working Americans and their families . Ronald Reagan championed the lower and middle class, supported unions and pushed back against corporate greed.

      These days, you can’t find a Regan conservative anywhere. The right seems to have devolved into a pack of corporate toadies — and are in fact people who don’t benefit from corporate profits but hate Americans so much they support these companies rather than supporting their fellow Americans in their fight for decent wages and working conditions.

      No wonder. When their chosen leaders hates 47% of Americans and thinks they’re just along for a free ride (and cell phone) and sees this half of America as something to be controlled and rolled back instead of given a helping hand, what do you expect?

      And you can’t fault Mitt for being honest when he told the wealthy donors as much — but you can fault Mitt when he turns around and lies to the voters saying he didn’t mean what he said. Of course he meant it – it’s become a foundation stone of the Republican Party to hate working people – as exemplified here.

      • jim_m

        I would wager that they signed that union contract when times were much better. Times changed. The company needed to adapt and should have made the changes earlier. But they didn’t and the union was not willing to be part of the solution and chose to be part of the problem. Now instead of making concessions they can go look for new jobs.

        I hope that if they did this out of some principle that it makes a good substitute for the food their children won’t be eating.

      • jim_m

        Ronald Reagan championed the lower and middle class, supported unions

        Man you are an ignorant dumbass

        As left wing idiot Micheal Moore said:

        Reagan’s firing of the PATCO strikers was the beginning of “America’s downward slide”, and the end of comfortable union jobs, with a middle-class salary, raises, and pensions. Wages have remained stagnant for 30 years. Moore also blamed the AFL-CIO for telling their members to cross the PATCO picket lines.

        Time to crawl back out of mommy’s basement and go learn your history.

        • Carl

          In his latest “Dispatch from the Bubble” (unions BAD grunt, snort) Jim quotes Michale Moore to show I’m wrong? Seriously? He cites Moore? LOL

          Ronald Reagan: “But restoring the American dream requires more than restoring a sound, productive economy, vitally important as that is. It requires a return to spiritual and moral values, values so deeply held by those who came here to build a new life. We need to restore those values in our daily life, in our neighborhoods and in our government’s dealings with the other nations of the world.”

          “These are the values inspiring those brave workers in Poland. The values that have inspired other dissidents under Communist domination. They remind us that where free unions and collective bargaining are forbidden, freedom is lost. They remind us that freedom is never more than one generation away from extinction. You and I must protect and preserve freedom here or it will not be passed on to our children. Today the workers in Poland are showing a new generation not how high is
          the price of freedom but how much it is worth that price.”

          Reagan was a huge supporter of collective bargaining and the right to organize.

          Reagan Supporting the Buffet Rule: http://www.youtube.com/watch?v=nRuWMoEWE1E&feature=youtu.be

          FLASHBACK: Ronald Reagan Called Union Membership

          REAGAN: Ever since martial law was brutally imposed last December, Polish authorities have been assuring the world that they’re interested in a genuine reconciliation with the Polish people. But the Polish regime’s action yesterday reveals the hollowness of its promises. By outlawing Solidarity, a free trade organization to which an overwhelming majority of Polish workers and farmers belong, they have made it clear that they never had any intention of restoring one of the most elemental human rights—the right to belong to a free trade union.‘One Of The Most Elemental Human Rights’

          Bubbleheads ignore the truth and fabricate their own “reality”, surrounding themselves with people who either choose to not point out their stupidity, or are equally dumb when it comes to fact-based realities and therefore can’t tell when Jim is spewing nonsense.

          But go ahead an quote your buddy Michael Moore to contradict me, Jim. Clearly you can’t think for yourself, and I can understand why you’d admire Moore and seek out and quote his “wisdom”.

          Ronald Reagan supported working class people. He was very popular with blue collar workers. Don’t let bubbleheads tell you otherwise.

          His trickle down theories have now been proven to not work. But he really believed that wealth would trickle down, and it was his desire to help the lower and middle classes that drove him to put those policies in place.

          Only corporate greed has kept those policies in place. You have to be a total idiot to still think trickle-down works. It lines the pockets of the wealthy and does not create jobs, Tax cuts don’t create jobs. A majority of American voters knew that, and maybe we finally turned the corner and are leaving that nonsense behind.

          Although I’m sure that, from inside the bubble, Jim recognizes none of this.

          He’s too busy looking for quotes from Michael Moore. LOL.

          • jim_m

            I was just pointing out your revisionist history. The left hated Reagan because he busted the union. As a former union member Reagan understood that unions also could be beneficial.

            As someone who lived when he did, he also saw that outlawing unions was the road to oppression (the 1st amendment applies there for you lefties who are ignorant of the Constitution) and was used by the communists and the Nazis.

            I never claimed that Reagan hated unions, but he understood that they had their place AND their limits. PATCO was over the line. The Hostess union is over the line too.

          • jim_m

            Perhaps you could reference the AFL-CIO solidarity march which was held in support of PATCO and where the UAW, NAACP and other left wing groups marched to protest against Reagan’s support of unionism union busting.

            My argument was not about his economic policy. I was pointing out your ignorance of history. Just admit you were wrong about his position on unions. His union position was actually far more “nuanced” than you admitted. Then again nuance is a word you probably never understood anyway.

          • retired.military

            I saw the phrase free trade union in there. Not trade union beholden to the democrats.

      • retired.military

        “f it’s reached the point where Hostess or any other company can’t stay in business unless they take food out of the mouths of their employees and children then their business model is severely flawed.’

        Carl, can you be so idiotic. Have you thought that the unions are the problem? govt regulations are the problem? No it has to be evil capitalism.

        Personally I am glad to see Hostess do this. I can only hope that sometime in the future someone will have the balls to get rid of all the unions. Their usefulness has past.

        California has $500 B union pension problem. Obama will most likely bail them out like he did the UAW. ANd leave the taxpayers holding the bill.

        Businesses are in business to make money. Not provide jobs, not to provide paychecks to workers. They arent evil they are an entity. I bet you think guns are evil as well.

        From what I saw bakers at Hostess was making almost $17 an hour plus benefits. That isnt too bad in today’s economy. With an 8% cut that would have been around $15 an hour. Still not bad for someone who doesnt even need a high school diploma.

        Do you know what an E-7 Makes who has 12 years in the military, most likely has an associates if not a bachelors and has about 8 years supervisory expereicne? About $46k + benefits. That is about 11k more a year than a baker with the union. The E7 works an average of 60-80 hours per week vs the baker’s 40, can spend a year away from 5his family and has about 100 times the responsiblity of the baker whose main responsiblity is to make sure the buns dont burn.

        I have no sympathy for folks who make $15-$17 an hour and lose their job when their company tells them “go on strike and the company will close”

        In other news ;Obamacare just killed another 1170 jobs

        http://www.foxnews.com/politics/2012/11/16/medical-supply-giant-stryker-corp-makes-pre-emptive-strike-against-pending/?test=latestnews#ixzz2CR6K6YW4

        Welcome to Obamaland.

        • jim_m

          The obvious answer is to outlaw private business and nationalize everything. Then we will all live in a worker’s paradise. Any dissenters will be sent to the gulag.

          • http://www.shockandblog.com/ Jay McHue

            That’s exactly what these jackholes want.

      • 914

        I just hate the fact that there are fewer and fewer around since Obama came to town. He ain’t no Santa Claus

      • http://www.shockandblog.com/ Jay McHue

        Geez, you are a gigantic moron. Tell me, where would hard-working Americans and their families be without the “faceless corporations” you and the unions hate so much? Jobless, penniless, homeless, and starving, that’s where. Where would former Hostess employees be now without unions? Working, earning money, and paying for their homes and food. Please pull your head out of your hinder before the stupid strikes again.

        • jim_m

          where would hard-working Americans and their families be without the “faceless corporations” you and the unions hate so much?

          We wouldn’t have Cars (the auto predates unions), we wouldn’t have department stores, the telephone, the radio, TV, banks, supermarkets. We wouldn’t have health insurance, or electricity or anything else of modern convenience.

          I’m actually having a difficult time coming up with anything that a union has created.

          • Brucehenry

            Well, there are the “weekend” and the “40 hour workweek,” the “minimum wage,” “child labor laws,” and whatnot.

          • jim_m

            Child labor laws predated unionism

          • Brucehenry
          • jim_m

            The National Child Labor Committee was formed in 1904. Child labor laws had nothing to do with unionism

          • Brucehenry

            Check out the link at all, Jim?

            EDIT: 1832: New England unions condemn child labor
            1836: Early trade unions propose state minimum age laws
            1836: First state child labor law
            Etc., etc., etc.

            Here it is again.

            http://www.continuetolearn.uiowa.edu/laborctr/child_labor/about/us_history.html

          • jim_m

            I have now. Funny how the History of the NCLC did not mention unionism and funny how the depression is credited with finally eradicating child labor because adults needed the jobs.

            So unions advocated against child labor. There is no evidence that it would still be practiced without union intervention.

          • Brucehenry

            Except that unions were getting results as far back as 1836 and 1842, more than 60 years before the NCLC. Unions were advocating against child labor all during that intervening time, winning some victories, suffering some setbacks. To say that there is no evidence that it would still be practiced without union intervention is fucking stupid.

            It’s like saying that slavery was ended by the Civil War, and there is no evidence that the Abolitionist movement had anything to do with it.

            Also, I see below where you say “there is an argument that the minimum wage today eliminates jobs” yada yada. Yes, I’ve heard that argument. It’s fucking stupid. It’s advanced by the same geniuses who advocate trickle-down economics, “creation science,” and the theory that Hitler was a man “of the left.” In other words, guys like you. It’s not to be taken seriously.

          • jim_m

            Plus, there is an argument that the minimum wage today eliminates jobs and increases unemployment, particularly amongst teenagers and minorities. Kind of like how the Hostess union priced the company out of business minimum wage prices people out of jobs.

      • GarandFan

        Right on! Power to the people! So tell us Carl, when are unions going to start creating companies and hiring people?

  • jim_m

    Unions forced the demise of Hostess. The left is anti-Twinkie!

    • 914

      The left however is also full of Twinkies.

      • jim_m

        Meh, They’re a bunch of Ding Dongs.

    • warnertoddhuston

      In the land of Obama, al Qaeda is alive and Twinkies are dead.

  • GarandFan

    The local carpenter’s union threw up a picket line around a recently COMPLETED animal hospital. Seems they suddenly discovered that no union labor was used. Reporter for the local rag went out to talk to the “strikers” – you know, ask what they hoped to accomplish since the building was already up. There was a slight problem. None of the “strikers” spoke English and could only respond that they were “day-laborers” (local dialect = illegal aliens) hired to carry signs.

  • 914

    “A union strikes because members feel they aren’t getting paid enough yet not only are they not interested enough in their own strike to walk picket lines themselves, they hire scabs to do the picketing. ”

    Not only are they lazy on the job. they are lazy on strike and cheap on top of it.

  • TomInCali

    As with the Hostess case, unions repeatedly prove that they’d rather destroy a business with absurd demands

    Yes, the Hostess employees made the absurd demand to not get an 8% pay cut! How did they even come up with such a thing?

    • jim_m

      They got their wish. Now they can have a 100% pay cut! What a bunch of ignorant douchebags.

      The company was going out of business and now the union has pushed it over the edge. I feel more pity for the consumers than I do for any of the workers who chose to destroy the company out of their own greed.

    • 914

      I know it’s a shame. But the rest of us are suffering under Obama’s recovery as well. So join the club. Or cry me a river and then shut up.

    • retired.military

      Yeah. Michelle is so happy because now the fatty things wont be a problem for kids.

    • herddog505

      No, they made the truly absurd demand to take a 100% pay cut (we’ll show those greedy imperialists in the head office that they can’t push US around!). The bankrupty judge apparently was very clear that there was no other path here: this was, truly, the company’s last possible offer. The Teamsters, who helped negotiate the deal, voted in favor of it.

      Sadly, the rest of the union workers (and Hostess was by far NOT completely unionized) voted to slit their own throats.

      How many factories around the country are empty and idle because (in part) of this idiotic belief on the part of union members that they can vote themselves a better living and economic facts (including imcompetent management) be damned?

      • jim_m

        The left is full of idiots that think economic reality can be dictated. RIchard Trumka is going around claiming that the fiscal cliff is make believe and that it was made up by obama’s opponents. The left claims that the deficit is not a problem and that we can continue spending as we have been. These are the people obama has met with from the left to gather support for the coming budget negotiations.

        Idiots like tom and chico believe that companies owe you a job. THey believe that unions are always right and their pay demands are always reasonable and that it is always the company’s greed and never economic reality that leads to a refusal of their demands.

        Unions once were important and useful. That was half a century ago. Today they are used to extract money from workers to support socialist political candidates and to intimidate political opponents. They do little else.

        • herddog505

          jim_mThe left is full of idiots that think economic reality can be dictated.

          Yes. And enough of them got together a couple of weeks ago to make the next four years a repeat – if not something even worse – than the last four.

          As far as lefties are concerned, “the rich” ALWAYS have plenty of money to pay for anything that “society” wants if only they can be made to “pay their fair share”.

        • lasveraneras

          This is a microcosm of the transformation of industrial production through technology. Industrial and manufacturing processes are being streamlined as competition goes global. The percentage of the U.S. workforce in agriculture is fallen dramatically to approximately 4%, if memory serves. Needless to say, the supply of food for a growing population remains more than adequate. The same is happening to manufacturing. Fewer workers are required – or even economically useful – to produce more and better products. Worldwide manufacturing employment is falling – yes, even in China – as robots and computerized assembly systems replace human labor. Think about it a minute. How can top down, seniority-based hierarchies which are the lifeblood of autocratic union structures contribute to the efficiency of modern manufacturing enterprises? The percentage of the unionized workforce in the private sector will inevitably continue to decline just as the motor vehicle inexorably replaced the horse and buggy. Unfortunately, the unions will insist on dragging many of the companies they occupy down with them in the process.

          • herddog505

            Hey, there’s always the public sector!

  • Commander_Chico

    I know it’s a commie rag, but this article from Forbes gives a different perspective:

    Who Killed Hostess Brands and Twinkies?

    . . . . More than a few observers say they know who to blame for the demise of the iconic company: the Bakery, Confectionary, Tobacco Workers and Grain Millers International union, which represents thousands of striking Hostess Brand workers who have refused to accept a new contract that would do everything from slash their salaries to their retirement benefits.

    Time for a reality check.

    Hostess has been sold at least three times since the 1980s, racking up debt and shedding profitable assets along the way with each successive merger. The company filed for bankruptcy in 2004, and again in 2011. Little thought was given to the line of products, which, frankly, began to seem a bit dated in the age of the gourmet cupcake. (100 calorie Twinkie Bites? When was the last time you entered Magnolia Bakery and asked about the calorie count?)

    As if all this were not enough, Hostess Brands’ management gave themselves several raises, all the while complaining that the workers who actually produced the products that made the firm what money it did earn were grossly overpaid relative to the company’s increasingly dismal financial position.

    http://www.forbes.com/sites/helaineolen/2012/11/16/who-killed-hostess-brands-and-twinkies/

    $274,000 is a pittance compared to many CEO salaries. The obvious question is, how much was the CEO and other management of Hostess paid??

    This looks more like a story of Bain-style looting and management hijacking than excessive union demands.

    Why are you against the free association of workers, the right to collective bargaining and the right to strike? Seems like an essential freedom to me.

    • herddog505

      Yeah, Bain-style “looting” all right:

      In 2009, Hostess came out of bankruptcy thanks in part to private equity firm Ripplewood Holdings, which made a $130 million investment, CNBC reported Friday. Hostess filed again for bankruptcy in January, and its debt was later purchased by investment firms, including two hedge funds: Silver Point Capital and Monarch Alternative Capital, according to a CNN Money report.

      http://www.politico.com/news/stories/1112/83979.html

      $130M buys a lot of Twinkies…

      I don’t think that you’ll get an argument that the management at Hostess was incompetent. Just as I wondered how the hell a company can go bankrupt selling cars to Americans, I wonder how the hell a company can go bankrupt selling Twinkies and Ho-Hos. Somehow, they managed to do so.

      But please spare us the whining about “corporate raiding”, as investors got hurt in this thing, too.

      Incidentally, back in the early 2000′s, I took a 10% pay cut, along with everybody else in my company, our management having determined that this was about the last measure to be taken to avoid having to close the doors. I wasn’t happy about it, but, on the other hand, 90% of my pay and all my benefits was a damned sight better than 0-0.

      Finally, I think that you lefties might want to rethink your “nasty corporate raider” talking points in light of this from (of all places) the Teamster’s website:

      [W]hen Hostess attempted to throw out its collective bargaining agreement with the Teamsters in court, the Teamsters fought back and won, ensuring that Hostess could not unilaterally make changes to working conditions during the several months’ long legal process that recently ended. Teamster Hostess members were allowed to decide their fate by voting on the final offer conducted by a secret mail ballot. More than two-thirds of Hostess Teamsters members voted with 53 percent voting to approve the final offer.

      The BCTGM chose a different path, as is their prerogative, to not substantively look for a solution or engage in the process. BCTGM members were told there were better solutions than the final offer, although Judge Drain stated in his decision in bankruptcy court that no such solutions exist. Without complete information, BCTGM members voted by voice votes in union halls. The BCTGM reported that over 90 percent rejected the final offer and three of its units ratified the final offer. [emphasis mine - hd505]

      And throw in this little tidbit:

      The BCTGM leaders are putting Teamster members in a horrible position – asking them to support a strike that will put them out of a job when they haven’t even asked all their members to go on strike.*

      In short, the Teamsters had apparently worked out the deal with Hostess to reduce wages and benefits (so much for greedy corporate raiders throwing the workers under the bus, eh?), but their brothers in the BCTGM voted to blow off that deal… and land themselves and their non-union coworkers in the unemployment line.

      Smooth.

      ====

      (*) http://www.teamster.org/content/teamsters-bakery-workers-should-hold-secret-ballot-vote-hostess

      via

      http://hotair.com/archives/2012/11/16/twinkies-fall-victim-to-union-management-dispute/

      • jim_m

        Stop confusing chico with facts. Chico knows hat the “truth” is that the unions were right and the ownership was greedy. That is the “truth” that advances his agenda. If the facts disagree with his “truth” he just ignores it because those facts cannot be real. Chico would prefer to live in ignorance than admit that unions are the predominant source of greed in our nation.

        • herddog505

          I fairness, I make no doubt that the management of Hostess – virtually ANY company, for that matter – would do what it could to depress wages and benefits, certainly when the company is in financial trouble. After all, the job of management is to maximize profits, and one way to do this is to reduce expenses. If that means… um… exagerating, shall we say?… the precariousness of the position… well, it’s not such a stretch of credulity to believe it. I further believe that management personnel would naturally cut somebody else’s throat before their own: “To save the company, we’ve got to reduce wages and benefits! You first…”

          However, to reflexively blame “Bain-style” (whatever that means) corporate raiding, ESPECIALLY when the entire economy is in the dumper, is a little foolish.

          • jim_m

            The left, and chico, has taken it as received wisdom that whenever a company is bought that it is the victim of some corporate predation designed to exploit the workers, consumers or both.

            Much like the left’s concept of the environment, they believe that the marketplace should never change. It should not be a dynamic, evolving entity but should be a static, predictable entity that can be relied upon for the same results year after year.

            Never intruding upon their consciousness is the idea that things change. Species extinctions have occurred for millennia but somehow now they are all the fault of evil men. Similarly, economic changes mean that some companies are going to fail. Animals get sick and die, so do companies. Chico does not understand this fact of life so he blames the evil corporation.

          • Commander_Chico

            I don’t think you understand the mechanics of the most rapacious leveraged buy-outs.

            Basically you take a profitable going concern with substantial assets and brand equity, borrow huge amounts of money against those assets to buy it, install yourself as management, quickly sell assets and pay yourself huge fees and salaries and saddle the firm with the debt.

            You’ve made a lot of money, but you’ve destroyed a profitable firm. Whether you approve of it or not depends on whether you think management has any duty to the firm qua firm.

          • jim_m

            Yes I do. I have been on the losing side of a corporate take over. I don’t think you understand what a free market is or,frankly, what freedom is.

          • Commander_Chico

            Cant and insults, the usual. Are there any arguments of market efficiency you can make?

            After all, any firm can be and has been looted and destroyed this way, not just unprofitable ones.

            But for the debt racked up by the LBO vultures, Hostess would likely be baking Wonder Bread and Twinkies for many years.

          • jim_m

            Are there any arguments of market efficiency you can make?

            Several. But none that you would be able to understand through your commie filter.

          • herddog505

            The hits just keep coming:

            Ripplewood is run by Tim Collins, 55, who’s been at the center of other famed PE transactions. Known as a brilliant capitalist-philanthropist-networker, he’s an eclectic character: a Democrat in an industry of Republicans; an Adirondack enthusiast dreaded by pheasant and fish; a board member at the Yale divinity and business schools; and someone who took a year at 31 to work at a refugee camp in the Sudan…

            Ripplewood’s foray into Hostess was partly enabled by Collins’s connections in the Democratic Party. He wanted to explore deals with union-involved companies and sought the help of former congressman Gephardt, who in 2005 founded the Gephardt Group, an Atlanta consulting firm that provides “labor advisory services.”…

            http://management.fortune.cnn.com/2012/07/26/hostess-twinkies-bankrupt/

            Gratuitous and highly satisfying swipes at democrats aside, the article provides quite a lengthy and detailed discussion of just what was wrong with Hostess. Nothing really surprising:

            — Bad management practices including a failure to modernize and typically goofy union work rules

            — Excessive debt including huge pension liabilities (approximately $2 BILLION in pensions alone)

            — Changing marketplace

            As Kaplan writes, what looked to be a model of how a Chapter 11 was supposed to rescue a distressed company became – through a combination of pre-existing debt load, lousy management practices, union greed, and faithless negotiating tactics – a great big F*CK YOU to everybody concerned.

          • herddog505

            In this case, I know that investment firms are out $130M that they paid to try to keep the company afloat. What have they to show for it now but shuttered bakeries, used ovens and second-hand delivery vans?

            Further, this assumes that what we have here is some sort of “rapacious leveraged buy-out”. Have you any evidence for this? The fact that Hostess was bough in ’09, nearly four years ago, indicates to me that the buy-out was a good faith effort to turn a profit NOT by “raiding”, but rather by putting a prima facie viable company back on its feet.

            Finally, the company would still be struggling along had a relative handfull of union workers not voted (contra their Teamsters counterparts) to reject the deal. Strange sort of raiding that allows the workers a last chance to vote to save the company.

            So, no: I don’t think your “greedy capitalists corporate raiders Bain exploiters of the working class!” line applies here.

          • Commander_Chico

            The Forbes article said that it had been sold three times since the 80s and had huge debt as a result. Sounds like LBOs to me. True, the last investor may have been different, but the damage was done.

            I still wonder what management was paying themselves. It’s hard to know what the BCTGM workers were thinking when they voted against the deal, maybe it was that the CEO was making $5 million a year and was not taking an 8% pay cut. Emotion plays a role – those workers, particularly bakers, may have had better options, too.

          • herddog505

            Sure. A company that’s been on the rocks for decades was CLEARLY being pillaged by corporate raiders. They’d been planning it for YEARS, I say. Simple lousy management decisions, coupled with the burden of union wages and benefits, could have had nothing to do with it.

            I think that I can, however, answer one question: the CEO at Hostess was apparently being paid QUITE well. This is one thing that DOES make my blood boil: incompetent management getting huge salaries – often huge raises – even while running their companies into the ground.

          • Brucehenry

            Another POV from one of my favorite lefty blogs:

            http://bobcesca.com/blog-archives/2012/11/thats-a-big-twinkie.html

      • Commander_Chico

        If the Forbes article is true, it looks like there was a series of leveraged buy-outs, with borrowed money and the proceeds of sold assets going to the buyers. Looting.

        Even if the $130 million “investment” was real money, the company was a burning, listing hulk by 2009.

        • jim_m

          Communist

          Or do you hold with point #11 that all income not derived from labor should be outlawed?

        • herddog505

          It was a “burning, listing hulk” in 2009 WHEN the investors put in their $130M, not before. They didn’t take a sound, profitable company and run it into the ground: they invested in a dying company and kept it going for nearly four more years. It would STILL be going if the union hadn’t told them to go f*ck themselves.

        • jim_m

          The Forbes article misrepresents the nature of the buyouts and mergers. None of these were private equity firms and all were other bakery interests. More BS from Chico.

  • http://libertyatstake.blogspot.com/ Joseph G Figliola

    The unions are the shock troops of the Left, which simply desires to replace capitalism with socialism. It’s really basically that and only that, folks.

  • http://www.facebook.com/alvin.mullen.7 Alvin Mullen

    Hostess CEO gave hiimself a 300% pay raise and huge bonuses to other execs, but it is all the unions fault?

    http://thinkprogress.org/economy/2012/11/16/1203151/why-unions-dont-shoulder-the-blame-for-hostesss-downfall/?mobile=nc

    • http://www.shockandblog.com/ Jay McHue

      Without citing the craptacular, craptastic, crappy piece of crap known as “Think Progress” (the most doubly ironic name ever for a lefty website) or any other retarded lefty website, please show us exactly how the pay raise and bonuses led to the company’s closing.

      I won’t be holding my breath.

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