November 18, 2012

Per Iowahawk: Hostess Shrugged

Monique Chartier

Citing an inability

to fulfill customer orders or sell product at their retail stores

and a lack of money to wait out a prolonged strike, Hostess announced Friday that it will return to bankruptcy court to request liquidation.

It's difficult not to see some resemblance to the denouement of the Brown and Sharpe strike right here in Rhode Island. (Contemporaneous labor perspective of that strike here.)

The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union denies that its work stoppage precipitated this action.

The truth is that Hostess workers and their Union have absolutely no responsibility for the failure of this company.

One interesting item in this CNN article: as part of its counter offer, the company had offered its workers a 25% equity stake in the company. This, however, did not seem to appeal to the union and/or its members.

Normally, my attitude towards private sector unions and how they conduct their business is one of complete indifference. But shouldn't they be ultimately motivated by and provide guidance on the basis of what is best for their members? This one appears to have missed this concept and has "succeeded" in marching its members straight off a cliff.

[Title of this post coined by Iowahawk in a tweet.]

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"What is best for their members" is supposed to be the guiding principle. Unfortunately we are far removed from the sweat shop era. The members paying dues ask "what have you done for us lately?". This pushes them to extremes, they have justify the dues.

I saw an item marked Brown & Sharpe recently, when I flipped it over it read "Made in Switzerland". I guess the name still has value. I have B&S stuff in my workshop. Some of it is 50 and 60 years old, some older, still "quality" items.

Posted by: Warrington Faust at November 18, 2012 8:43 PM

Wouldn't it have been nice if the union didn't represent all workers by law, and therefore some of workers could have chosen to keep working and keep the company open? If only there were some piece of legislation that gave workers the "right to work" instead of being held hostage against their will by a hardliner union.

Posted by: Dan at November 18, 2012 8:43 PM


In the Hostess case, it was only 30% of the workers who went on strike. 70% accepted the new contract deal. (different unions)

I think I posted elsewhere that I was listening to NPR the other day. The "talent" was chortling over how all those peope deserved to loose their jobs for their participation in making all that food to poison our children.

Posted by: Warrington Faust at November 18, 2012 8:47 PM

Warrington - Perhaps of the total company, but my understanding is that the baker's union was on strike. If the company has no bakers, then it doesn't matter much if the truckers are willing to truck.

Posted by: Dan at November 18, 2012 8:57 PM

Yeah, it was just the bakers' union. The Teamsters had already agreed to a contract. Imagine that. You get the butcher, the candlestick maker and the Teamsters, but you go out of business because of the bakers.

Very sad that they can't cross the line and go back to work. I can't even imagine going back home to the family to explain that one. "Yeah, I'm holding out for a better deal! No more screwing me over!" Did you see they went out of business? "Oh...crap."

Posted by: Patrick at November 18, 2012 9:13 PM


Posted by: Mike678 at November 19, 2012 8:37 AM

The comments from the Teamsters were interesting. You don't see too much union on union criticism but there it is:

The Teamsters union, which represents 6,700 Hostess workers, issued a statement blaming mismanagement by Hostess executives for the company's problems. But it also was critical of the decision of Bakers' union, although it did not identify the union by name.

"Unfortunately, the company's operating and financial problems were so severe that it required steep concessions from a variety of stakeholders but not all stakeholders were willing to be constructive," said Ken Hall, the Teamsters' Secretary-Treasurer. "Teamster Hostess members, based on the facts and advice from respected restructuring advisors, understood what was at stake and voted to protect all jobs at Hostess."

Posted by: Max D at November 19, 2012 10:26 AM

How Twinkies may contribute to the deficit and then some.

Posted by: Max D at November 19, 2012 1:16 PM

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Former Chelsea striker Didier Drogba used his first press conference as a Shanghai Shenhua player to plead with the owners of his new club to ensure Frank Lampard and John Terry follow him from Stamford Bridge to China.

Drogba touched down in Shanghai on Saturday and was greeted by thousands of fans who treated the Ivorian to a rapturous welcome following his decision to sign for the club on a free transfer.

The 34-year-old will join up in Shanghai with former teammate Nicolas Anelka, who signed for Shenhua in January, and hopes that even more players swap blue of Chelsea for the blue of his new club.

"I need to speak to my president," said Drogba when asked about the possibility of Lampard and Terry joining him. "Because I want them in my team."

Drogba's decision to sign a two-and-a-half year contract with Shanghai has led to some criticism as most observers would argue that the Ivory Coast international still retains the ability to perform at the top level.

The Blues legend, however, has hit back at detractors and claimed he has not moved to China for the money, despite reports suggesting he will earn in excess of £200,000-per-week.

"Believe me, it’s not about money. I’m really happy to be here," he added. "I am opening a new chapter and the new chapter is Shanghai Shenhua."

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