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"walls of the city" logo conceptualized by Oleg Volk and executed by Linoge. Logo is © "walls of the city".

be careful what you ask for

This is why I will never have any respect for modern "unions":

Hostess Brands — the maker of such iconic baked goods as Twinkies, Devil Dogs and Wonder Bread — announced Friday that it is asking a federal bankruptcy court for permission to close its operations, blaming a strike by bakers protesting a new contract imposed on them.

And what is this horrid new contract that the union simply cannot abide?

The new contract cut salaries across the company by 8% in the first year of the five-year agreement. Salaries were then scheduled to bump up 3% in the next three years and 1% in the final year.

Ok, yeah, making 92% of what you made yesterday would well and truly suck, there is no question about that, but it sure as hell beats making 0% of what you made yesterday, which is what the 5000 union employees and 13,500 other workers of Hostess will probably be doing in the near future.

When it comes to those 5k, screw them and let them freeze in the dark, and doubly so for shafting their fellow employees.

This is a mentality I do not think I will ever adequately understand, much less relate with. I understand that accepting a cut in income sucks, and I understand just how narrow of margins families and people are working on these days. However, it would seem to me that scrimping here and there to make by on what money you are able to bring in after the cuts would be infinitely superior to bringing in no money because you and your crony idiots helped shut down the company that employed you. And what, exactly, do those bakers think they will do now? Have they seen the unemployment numbers (the real ones)? Do they think they are just going to just roll right into another job? Of course, with their union backing them up, they might be able to… until they help drive that company into the ground, too.

It may be a loose analogy, but this is rather like burning down your apartment complex rather than pay a slight increase in rent.

I will not go so far as to claim that the union morons are exclusively responsible for Hostess closing their doors – that company’s repeated bankruptcy proceedings clearly indicates something else (or multiple something elses) was afoot and needed to be addressed – but having ~27% of your workforce refuse to show up would be enough to give any corporation pause.

In any case, all you Tallahassees out there had better start stocking up – Amazon is already running low, prices are going up, and there is no guarantee anyone will buy up the "Twinkie" name once Hostess goes to auction (though I would be very surprised if someone did not).

19 comments to be careful what you ask for

  • Mike123

    I’ll bet in a couple of months, Mexico will be making Twinkies and bringing them to the US. Ain’t NAFTA Nifty!

  • Joe

    Why they’ll be just fine drawing unemployment over the next 4 years! Why work when you can just lay on your behind and draw unemployment? Hell, you don’t actually have to get off your butt to try and get a job or even talk to someone over the phone now. Just log in and check the jobs you know you won’t get and collect more money!

  • Pyrotek85

    Yeah it sounds like the strike was just the last straw, looks like they’ve been struggling for like a decade now.

  • Derek D.

    Considering the disparity in salary between the low-level employee and CEO of 1960 and the same today (not sure what that is, but the spread has gotten much wider IIRC) the unions are losing ground. Have no fear–soon we all will make minimum wage while the executives will make millions.
    Was management facing the same cuts–not just in salary but bonuses also?
    Some unions suck, some don’t.

  • Mark@Sea

    Nose. Face. Power saw.

  • Vinosaur

    First of all, love the blog and read it daily.

    If your household can’t afford an 8% reduction in pay. If you are that tight then there is something wrong. How many of those people have cable TV and spend more than $100 a month on it? How many have “smart phones” and spend more than $100 a month on phone plans? Smokers? The list goes on. My wife and I discussed this when I got let go from a good job after the market crash in 2009. I was making $70K a year and let go 10 days before Christmas with NO notice. Found work 6 weeks later making $56K. That is a 20% cut in pay and we only had to make small cuts in our lifestyle to stay solvent. Of course, we also never lived paycheck to paycheck and weren’t ass over teakettle in debt either. The issue is the unions NEVER willing to give up anything. Look at what happenend at Hormel in ’85. Workers refused to budge and lost everything.

  • Derek D.

    @ Vinosaur:

    And even at your lower salary you are still probably making at least 1.5x what those employees were.

    Maybe the employees should have given more. Maybe the Management should suffocate in their “Golden Parachutes.”

  • Prepare for Hostess to be villified in the press as the evil, greedy corporation.

  • @ Mike123: My understanding is that it is only the American operations that are being shut down / sold off. Other countries’ Hostess corporations should still merrily spin along, so we should be able to import something if some other company does not buy up the various brand names.

    @ Joe: Having recently had an extended family member go through the unemployment system, I would not go so far as to say that it is quite that easy, but I will agree that the unemployment system is in need of a serious overhaul (as in “burned at the stake and its ashes spread over the ocean”) and that may very well be some of the bakers’ plans. Which, after all, only serves to indicate that they are part of the problem.

    @ Pyrotek85: Yeah, the company does not seem to have been doing well (which, given the demonization of some of their product lines, is not overly surprising), but, still, having nearly a third of your employees refuse to work? Yeah, time to fold.

    @ Derek D.: Oh good. Yet another person who sees economics as a zero-sum game. Just my luck.

    I have not been able to find any definitive information regarding the salaries/wages of the bakers versus that of the officers of the company, but that hardly matters, does it? The morons in the union were given a choice – take a pay cut or we close the company.

    The union chose to close the company.

    Worse, it is now looking like the bakers’ union intentionally mislead their members by telling them that some “white knight” corporation would sweep in and buy up the entirety of Hostess, and them along with it, when no such corporation or negotiations were even hinted at by anyone except them. That is vile.

    Regardless, until you have definitive information regarding salaries/incomes, and a rational explanation as to why certain people should be paid more or less (“rational” meaning something better than “it’s not FAIR”), you are simply making an ass of yourself.

    @ Mark@Sea: Prexactly.

    @ Vinosaur: I understand why unions were created when they were created, and how they were necessary and useful in the times. That need and that utility has more than expired, and we have successfully reached the point where the tactics and methodologies employed by unions are demonstrably counter-productive and destructive. Nearly three more people are out of a job for every union jackoff who could not swallow his pride and take a paycut, or, whackily enough, simply quit and go find some other job, since they seem so sure they will be able to find another one as it is. I have no respect for that.

    @ MSgt B: It would seem as though Derek D. is already valiantly (for certain definitions of that word) attempting to do so…

  • Vinosaur

    @ Derek D.:
    I have no doubt I make more than the average American. Not bad for a guy that didn’t finish college and decided to learn a skill and keep working and trying and succeeding. So I make more money so should be willing to give up more? We all live within certain means. I make more but also spend proportionally more. A 20% cut in pay effects me just as a 20% cut in pay would effect the average American worker. Suck it up and move on. The Unions are the problem. These workers need to stop “towing the line” and look at reality. How many Millions of dollars did their union put into campain funding for Obama? How many jobs could that have saved?

  • Singing Detective

    Linoge, I’m sure we all agree that the unions didn’t do much but hasten the demise of the good old twinkie (At least for the next 18 months until a new buyer is found and the post-apocalyptwink resumes production) The following link (How true I’ve not been able to verify)
    http://politix.topix.com/homepage/3442-unions-hostess-ceo-received-300-raise-before-bankruptcy

    shows that while they’re suffering their second bankruptcy in a few years apparently the CEO and some corporate officers voted themselves hefty pay raises somewhat recently. As always, it’s a mixture of things, but I can’t help but think that both ends share the blame rather vigorously, and the 13000 non union folks, get caught in the middle.

  • @ Singing Detective: I have also heard/read that the majority of those higher-ups at Hostess gave up those raises once it became apparent just how dire the straits Hostess was in were.

    In truth, we have no idea, and probably never will know, since this situation has turned into a hobby-horse for both sides of the union debate. What we do know is that some morons decided that no job was better than a slightly-less-well-paying job, and that is idiotic no matter how you cut it, especially since they made that decision for themselves and nearly three of their coworkers apiece.

  • JTwig

    My job is to tell our customers, which are mostly convenience stores and gas stations, what products to carry and where to place them to maximize sales, and then send out a merchandising crew to make the changes in their stores for them.

    So I can tell you with certainty that their problem for the last 10-years has been price points and low profit margins associated with their products, and I’ve been recommending to customers more and more not to give them shelf or floor space; what’s the point when you would have to sell a hundred boxes (full cases) of Twinkies to make the same amount of profit as a dozen bags (3.5-5 oz) of beef jerky. Those customers that still insisted on placing them in their stores, and a lot do, I defiantly advise against giving them a prominent, high traffic location.

    While part of the profit margine problem has been caused by the greatly increased cost of sugar and grains over the last 5-years, it is mostly labor costs which have been keeping them from being competitive in a store.
    nges in their stores for them.

  • Rob Crawford

    To the people taking the Baker’s union’s side — you do realize that the Teamsters union agreed to pay cuts and encouraged the Bakers to do likewise, right? That it wasn’t “big bad ebil management versus the innocent put-upon unions”, right?

  • Geodkyt

    No, this is about 20% of the work force forcing the other 80% (mostly other union workers) out of a job.

  • @ JTwig: Now that sounds like an interesting job… I would be very interested to see how much these bakers were being paid before the company closed, and how much non-union bakers of equivalent companies were being paid by way of comparison. Not sure if those numbers will ever come out, but it might shed some light on the apparent myriad of problems Hostess was suffering from / was inflicted with.

    @ Rob Crawford: And lest anyone get too whingy about the plight of the poor, downtrodden worker when compared to the fat-cats at the top, I would invite you to take a look at this graphic:

    Are those the paychecks of the Hostess officers? Nope. That is what the union bosses get paid, courtesy of Bayou Renaissance Man. I would, of course, point out that a significant fraction (all?) of those union bosses’ incomes comes from their employees – are union dues more or less than the 8% pay cut, and how much would it have really hurt the union to reduce those dues a touch?

    @ Geodkyt: And that is the well-and-truly crappy part of all of this – those union employees screwed over almost three of their coworkers for every one of them, simply because they believed that no job was better than a job that pays 8% less. The level of idiocy on display in that thought process is amazing.

  • Derek D.

    @ Vinosaur:

    No, it doesn’t. That’s why poor people pay more of their income in sales taxes than the rich. Regressive taxation.

    Hefty pay raises for the management? Imagine that.

  • Derek D. wrote:

    Regressive taxation.

    Well, my days of not taking you seriously are certainly coming to a middle, especially coupled with your apparent inability to read the entirety of a comment thread to which you are replying.

    Or perhaps you would care to explain why the bakers’ union’s staff is being paid so much, since you are so very concerned about executives’ salaries?

  • Derek D.

    @ Linoge:

    I’d be wondering that too, were I a member of that union.

    There’s a balance to be maintained, so one doesn’t kill the goose that lays the golden eggs. As a worker I want to be paid the most I can be for my skillset, just like management.