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Twinkies Strike: Did Hostess' Bakers Cut Their Own Throats?

The ripple effects of the collapse of Hostess Brands hit Patch towns around St. Louis as employees lost their jobs last week.

If your company said it must cut wages and benefits or it will go out of business, would you believe it?

That is really at the crux of the drama that played out over the 10 days surrounding Hostess Brands, the makers of iconic bakery names such as Twinkies, Ho-Hos and Wonder Bread.

That drama hit close to home in the days leading up to the Thanksgiving weekend when stores in Manchester and St. Charles that sell Hostess foods abruptly closed their doors, leaving employees wondering what would happen next.

That came after news that the company could not come to terms with its bakers union.

Without an agreement over 8 percent cuts in wages and 17 percent cuts in benefits, the company said, it would have to shutter its doors and liquidate the business, eliminating 18,000 jobs. That's exactly what it commenced to doing last week, until a bankruptcy judge pushed the parties into mediation.

The head of that union told the Wall Street Journal on Tuesday he wasn't optimistic mediation would work "because his members aren’t prepared to take the labor concessions Hostess says it needs to survive."

Then, late Tuesday, news broke (according to a report on CNN Money) that the one-day mediation had failed: "Hostess said in a brief statement that the mediation session 'was unsuccessful,' and that it had no further comment ahead of a hearing scheduled for Wednesday morning in bankruptcy court, where it has requested permission to liquidate."

So back to my question: The company says it won't survive without the cuts. The workers say they won't accept cuts. At what point does someone blink?

At what point do union members have a responsibility to say, "I'd rather have a job, even if it doesn't pay what it used to pay"? Or at what point does the company say, "We have to save the jobs and keep the company running, and find the cuts elsewhere"?

Tom Maher November 27, 2012 at 05:45 AM
Oh brave (yet anonymous) "PaulRevere" - stealing a line from your screed - your detailed knowledge of this business is simply astounding. The owners (not the management) have a need to produce a product to satisfy themselves. The unions have a resource that management needs to satisfy its owners. Ergo - the former cannot do without the latter. Perhaps both entities share the blame; but your willy-nilly (and not unexpected) rush to blame the workers for everything is simply bigoted balderdash.
mary zaggy November 27, 2012 at 07:25 AM
Mr. "Paul Revere", Up to this point, I've ignored the condescending tone of those discussants who view the non management laborers as expendable, while the managers and owners are the only ones bringing value to the company. And the comment that the workers should just cough up a mere $5,000 reminds me of a certain presidential candidate who cavalierly made a little &10,000 bet during a nationally televised debate...he also assumed that most kids wanting to go to college could just turn to their parents for a loan. The point is that workers do NOT have the same pikes of cash laying around as many owners or managers do. and, just as important to recognize is this fact: worker/laborers DO invest: they invest their very hard work, their blood, sweat, tears, and their health. How managers end up with work-related disability? How many lose las on the job, incur life-threatening illnesses on the job? How many managers died in that Bangaladesh factory fire this past weekend? If managers give so much of themselves that they are so invaluable that they must be paid huge sums to be retained, why are these same managers so disloyal as to jump ship at the drop if the hat unless they can extract/extort more money from a financially-troubled firm in the form of bonuses and golden parachutes? How many companies exist with managers, owners, and stockholders, and NO worker laborers?
Jim November 27, 2012 at 07:57 PM
Union vs Management - SSDD. Somethimes in negotiations agreements cannot be reached. The Union would not accept the wages the company was willing to pay so the company closed. End of story. But reading these post makes one wonder how any negotiations ever results in workable solutions. I have been on both sides of the table and believe me, both sides are working to get as much as they can. But there is always risk and here the risk was bankruptcy and so you have it - everyone lost. Just pleassse, quit crying.
ray November 27, 2012 at 09:41 PM
I saw a quote from one of the workers who said, he may not be able to find a job as good as the one he used to have-- but he was sure he could find one better than the one they were offering him now.
RDBet November 28, 2012 at 02:54 PM
Meanwhile -St. Louis could lose yet another employer - Ralcorp, to corporate monopoly.
PaulRevere November 29, 2012 at 01:37 AM
Mary: Non-management laborers AND Management Executives ARE ALL EXPENDABLE. Managers actually run the company. Managers hire the labor. Managers get the sales and collect the money to pay the bills. They are usually very highly trained and capable "mindsets" to any business. You call it jumping ship, but every Laborer should have sought another job & jump ship. Be honest, They could not find another job and that is why they use "strikes" to "SHUT THE PLACE DOWN." Note the difference, managers walk away for the most pay, while Union laborers Stay and force a shut down. Everybody loses with that stupid tactic. Owners could replace any Executive or laborer who left , if the Laborers would have agreed to de-certify, they would all be employed today. At lower pay. That is 100% certain. Think! Not one new outside manager was willing to come in and work for Hostess as long as Unions demanded more. Therefore, paying more to executives to stay on board allowed your Laborers more days to negotiate. This company was gone over 12 months ago , had all the executives left. Maybe you don't know how many companies were ready to steal these very hard working, sweat, tears and their health and pain Execiutives. Managers were not the disloyal ones, it is the jealous union laborers who pay more attention to other people's earnings than they do to their own FUTURE JOB STATUS. My $5,000 remark highlights the millions of dollars that owners have lost.
PaulRevere November 29, 2012 at 01:50 AM
Tom M comments: The owners (not the management) have a need to produce a product to satisfy themselves. The unions have a resource that management needs to satisfy its owners. Owners are usually Mangement for starters. Tom, this quote leaves off the most necessary ingredient to ANY JOB. Any "need to produce" requires INVESTMENT DOLLARS (Big time!!) What?--Owners INVESTEMENT. That is my previous statement. A need to produce is only on drawing boards. SO let me make it clear. What comes first-- The buildings, machinery, Delivery Trucks, Raw materials ingredients, Heat, Telephones, insurance, real estate taxes, salesmen, office and factory equipment, tools, customers???? (This is called "Skin/money in the game" for owners investments.) OR Do the Laborers come First.?? As to my name? If I told you my real name is "Barack O", would that make me more likeable?
Tom Maher November 29, 2012 at 02:15 AM
Oh brave (yet anonymous) "PaulRevere" - I did not "leave off" the dollar investment. It is irrelevant to my statement. But you knew that. I see no need to hide behind a nom de Net; why do you? Do you fear relocation to one of them there FEMA concentration camps - or are you just embarrassed that your neighbors, your children, or your parents will read your words? Because you prefer pseudonyms, perhaps "RushO'ReillyHannity" would be more appropriate than "PaulRevere."
mike k November 29, 2012 at 02:42 AM
Interesting comment. Let me tell you a real story. My father ran the Pork Division of Armour & Company for a number of years. They had meat packing plants throughout the country, including St. Joe, Kansas City and East St. Louis. They are all gone now, along with Wilson Meat Packing and Swift. All were union plants and all were run out of business by ConAgra. I remember to this day working on a assembly line forty years ago watching a union worker sitting on his ass all day putting one scoop of dry ice in each case of pork bellies coming off the line. Unions destroy public companies, they are obsolete like the dinosaur. They may have a place in government but they are poison in the well of free enterprise.
Tom Maher November 29, 2012 at 04:36 AM
"mike k" - ConAgra ran the packers out of business? I thought in the era you mention it was strictly a feed businesss, no? The real death knell for the old giant packing plants was when outfits like Iowa Beef packers came along and built plants in the boonies, no longer needing giant stock yards as we had in East St. Louis. Over there, Armour closed in 1959, Swift in 1967, and Hunter in 1982. STL's Independent packing (at Chourtueau & Vandeventer) closed sometine in the mid-'70s as I recall. What really killed the large packers was the Interstate highway system and refrigerated trucks, enabling packers to move where the animals were. To blame it - or the demise of other businesses - on the "poison" unions is not only disingenuous but dead wrong. Look beyond your bile. To each "union worker sitting on his ass all day" you cite can be given equal accounts of management being featherbedders as well. And you know it.
mike k November 29, 2012 at 05:04 AM
Name one industry that has prospered since WWII that is heavily union. Auto, no way almost all non Union, Garment Workers - gone, Pharmaceuticals - all non union, Technology - non union, Agriculture - all non union, Small business - all non union, only Unions doing well are Public Service Unions and their days are numbered as tax payers will no longer subsidize their outlandish benefits. The Postal Service is the prime example of the failure of Unions in the 21st century.
PaulRevere November 29, 2012 at 06:37 AM
Mary: Would you please stop your crying! This Missouri state has "Free" education for anyone wanting it up to age 21. So any Public High school & college in Missouri should be ZERO Cost to any student. Managers and executives come from all walks of life. So quit suggesting there are some priviledged class of people out there who know how to "kiss up" or play the game. (There is no such thing as "A good education". Most teachers never worked in the real world of business. A good Student is all it takes.) Managers at McDonalds all started as order takers. Many now make over $70,000 yearly.(AS MANAGERS) Now do you think they would last long if they threatened to STRIKE for higher wages. NO! Why? Because there are hundreds more ready to work at $70,000. That's exactly what the Hostess prima-donna union members did not understand. Trust me on this. I deal with this every day. De-certifying the union would have saved Hostess. I am sure their massive pensions will take care of them for some time.
mary zaggy November 29, 2012 at 11:00 AM
To Tom, Thank you for asking "Paul Revere" to be more civil. I'm not going to address him directly due to the bullying and bombastic tone of his comments. Too bad his education--for which he seems to have little regard--did not teach him how to discuss or listen respectfully. And, when "Paul" says "trust me...." Well, didn't Richard Nixon say that too? I have enjoyed your informed, and rational comments. At this time I am bowing out of the forum because "Paul R" has turned it into a shouting match. Have a great day.
RDBet November 29, 2012 at 04:35 PM
Ralcorp was not bought out because of a union problem. Neither was A-B. Think of the # of jobs lost when banks (non-union of course) HQ'd in St. Louis became no more (Boatmans, Mark Twain, Mercantile etc etc etc) when gobbled up in acquisitions by corporate banking monopolies. Decades of company goodwill cashed in for a one-time payoff for stockholders and golden parachutes to the execs that orchestrate the cozy deals. In a perfect capitilistic world, Buyouts are the market at work and society (aka, the consumer) are to also benefit from these merger/consolidation deals, via "economies of scale" and efficiencies. However, it is far from a perfect capitalistic system, and these savings are rarely passed on to us. What remains are monopolies that are "too big to fail" and have the power in the business world (and political world) to screw over the consumer and taxpayers time and time again. Review some Teddy Roosevelt and Guilded Age history as you fret over those union thugs and Twinkies lost. Labor and Capital in the markets have long been a balancing act. Sometimes and in certain industries, Labor has held too much sway over Capital. The current claim we are hearing that this Hostess situation is indicative of overal excess of Labor over Capital.....that is a claim made by ingnoramuses that have eaten too many corporate propaganda Ding Dongs. Time to enforce Anti-trust regs again.
Scott Simon November 29, 2012 at 05:06 PM
Elizabeth, this is a great story and so much better than the drive-by editorialists here who think their opinion is fact. I've worked both sides of the fence, in management and as a union finance director. I always said "status quo was better than no go." I was a member of a bargaining unit who dug their heels in the sand, wouldn't give in for 18 months, then threw up their hands and said to membership, "just pass it." Gave Cliffs Notes to the membership. I read the full proposal. I requested a vote delay so that members could read the whole thing which wasn't as long as the Obamacare bill and could be done in an hour. The shop steward said no (even though I outranked him being on the chapter's Executive Board). Membership passed it not knowing what they were giving away. I was so disgusted I quit the executive board position AND my union card which I could do working in a right to work state. It was bad enough my bargaining unit was subsidizing free lance members of my own union! In return for the giveaways my so-called union brothers and sisters approved, quitting the union earned me $94 more a month which I put into my IRA and made more money in the long-haul than their crummy annuity-driven single-payer pension.
RDBet November 29, 2012 at 05:27 PM
Unions have outlived their usefullness in many industries - and media/journalism is probably one of them. However - I don't see any relevance in your comments to this Twinkie story.
EL Houghtalin November 29, 2012 at 05:34 PM
Yo quero Twinkies. I bet the Mexicans can run the living HELL out of this company. They should sell interest in the company to the drug lords. It would be a win on both sides for them. Plus, labor disputes don't end well with Mexican drug lords (as is evident in the desert of Southern Arizona! By the way...I have a cat that has more writing talent than you (buried in the back yard). I picked up more writing ability in the third grade while learning cursive. Please tell me that you didn't waste your time in college. It must be awful having to pay off student loans on the salary of a third world rag (such as this). Is it too late for you to get a management position at McDonalds? I pray that you didn't burn that bridge.
The Missourian November 29, 2012 at 05:45 PM
I think the bigger issue isn't unions per se, but the apparent weakening of labor in general - whether white collar or blue collar - against an increasingly global competitive landscape. I don't know why it is so difficult to articulate or for people to grasp, but there are very tangible benefits to having stronger labor - unionized or not. It comes down to Henry Ford's old idea that you must pay your employees enough to actually buy the products they are making. At an even higher level, you must demand that the manufacturers of imported goods are held to the same high standards we hold ourselves with regard to workplace safety, environmental responsibility, child labor, and the implicit or explicit social contract between workers and ownership. When workers have money in their pocket, and feel like they will continue to have money in their pocket - in other words when they feel security - they will spend less cautiously and the economy will function better, benefiting everyone. There are countries we should trade with freely - western and northern Europe, Japan, Canada, Australia, S. Korea, etc - that seem to have similar values and similar purchasing power to ourselves. But in situations where lower standards allow a country's exporters to undercut our domestic industries, we can and should take a harder line. It may be worse for trade, but it is better for our people as a whole. If we don't have strong unions, we must have strong trade rules.
Devon Seddon November 29, 2012 at 06:14 PM
You're going to want to look up the word facism. You don't understand that anymore than you understand your need to mis-represent & hate. Fascism: a political philosophy, movement, or regime that exalts nation & often race above the individual & that stands for a centralized autocratic government headed by a dictatorial leader, severe economic & social regimentation, & forcible suppression of opposition. 2: a tendency toward or actual exercise of strong autocratic or dictatorial control. That's what YOU voted for. Those horrible greedy business people, let's just keep driving them (and the rest of the jobs) out of the country. Those evil jerks want to keep doing business & hiring people, who do they think they are? Job providers? Tax-payers of MILLIONS of dollars every year? Our economy doesn't need them, we need more taxes, not businesses. Let them sell off their assets & go to Mexico & hire people who appreciate the value of a job. That way, we can keep blaming these employers & businesses for the problems our idiology causes. These people think those companies should just stay here, pay the highest corporate tax-rates in the world, cater to the demands of a work-force making more blue-collar money than anywhere else in the world (as well as most of the workers in their own country) & keep demanding more, and just take what's left, when there are other viable options for doing business. They should just shut-up, stay here, & open their bank accounts to everyone.
PaulRevere November 29, 2012 at 07:47 PM
Mary: I graduated from Harvard University. I helped Apple computer actually build the iPad. I am only 36 years old. I never made a cent trying to make people "ENJOY" my comments. Did Hostess-Cut their own throats? That is exactly what I answered. You blame management , I gave you "The Truth", because that is what I know, not what I think. In the words of some great movie "You can't handle the Truth". So, you figure out who the real Paul Revere is. Pay more attention to my name or who I claim to be rather than what I said about Hostess. Go check the facts, and you will know that every word I said is true. Finally, This current President has yet to tell the TRUTH, about the murder of 4 Americans in Libya. He cannot even divulge where he was for 7 hours of the Attack on our embassy. Do you know that? If you do, then please tell me, or do you believe he was doing his job? "Let me make this perfectly Clear" is the most often used quote of our B.O. President, yet you challenge "Trust me". I am proud to wake you up!. P.S. He (B.O.) was sleeping to prepare for Vegas Campaign trip the next day. That's my opinion-not yet proven.
RDBet November 29, 2012 at 08:07 PM
Well said, Missourian.
PaulRevere November 29, 2012 at 08:15 PM
RDBet: Your age is starting to show. Boatmen's ? Mercantile? who are they? Your explanation of "capitalistic" mergers leaves me wondering how you acquired such knowledge. "Buyouts" are very different than "Mergers". Capitalism has nothing to do with Mergers or Buyouts. For your information , here is the "Harvard" flow-chart of Capitalism. 1) An Idea. 2) Public need. 3) An investment (usually called "RISK" capital) 3) Business structure 4) Labor force (includes Management) 5) Selling (Service or product) 6) Profits. 7) Paying legal tax rate 8th-the most important--- taking those profits after taxes and starting with (1) all over. Mergers and Buyouts happen at 8th level. They are the "Result" of Capitalism, they are not Capitalism. I know it looks minor to you, but your capitalism comes across as "vultures" coming from nowhere, scooping up innocent unwilling businesses. That is what "Unions" do. That's capitalism
RDBet November 29, 2012 at 08:37 PM
PaulRevere -lol- your age is showing -anything that you can't find on a right wing internet site in the last 2 weeks is ancient to you. All those mergers/buyot/consolidations (or the gist, choose any moronic parsing you wish) occurred within the last 20 years. I realize that puts some of them beyond your maturity level, if not your age. Could you share all the great benefits that have occurred as a result of consolidating and deregulation of most financial institutions?
RDBet November 29, 2012 at 08:55 PM
They don't have legal Unions where they mfg the iPad (which PaulRevere/Colbert helped create - ha ha) but they do have nets on the buildings to catch the suicidal workers. http://www.bloomberg.com/image/iLgq0RPDOQXU.jpg If only the US could make it's labor force and environment restrictions as pliable as in China or Bangledesh......imagine the utopia, Paul Revere. Imagine.
PaulRevere November 29, 2012 at 09:12 PM
Well, Mr old-timer, For starters, AT&T today is the result of merging 8 separate telephone companies back in 1984. Jobs are now over 10 times those employed back then , by all 8 companies. Sales are up over 20 times what they were. Actually, I made up all these facts, because I was not yet born-They make my point. LOL!
MUTiger87@gmail.com November 29, 2012 at 09:17 PM
Typical union behavior. Real smart - refuse to accept reality and then be out of a job all together. They get what they deserve. I bet all of the arms folded, stone jawed union folks are rethinking there position now. The US of A will be a much better place when all unions are gone. They were needed in the 30's... not any more.
PaulRevere November 29, 2012 at 09:49 PM
MUtiger: You are correct. Unions days are numbered. However the public sector vs Private sector unions must be treated separately. Why? I am for Private sector unions because they have competition to deal with. But,They will be unnecessary as all new Workers in USA will BE FORCED TO GET HEALTH INSURANCE. (Obamacare mandate!) That will take away the biggest reason to unionize any business. All union organizers have Health benefits as the number 1 reason to vote for a union. All Private union bosses will be sorry for the Obama-care mandating the one benefit used for union membership. Eventually ALL young workers WILL NOT NEED union sponsored health care benefits. Thanks to Obamacare. Unions have voted for their own demise. That last reason to organize will be gone, because most companies will have the 401k pensions far more beneficial than what any union can offer. So, I expect a major drop in private unions. Almost a blip on labor screen. Public service unions are another problem another story. THE PEOPLE HAVE THAT VOTE TO KNOCK THEM OUT. There are more non-union people in any District that could easily rid themselves of union control. It takes an organized campaign to do it. If Residents can get 50% real estate tax reductions, I am sure it can be accomplished. Too many Poor & needy are supporting Rich lifestyles of the Public service employees in Missouri.
The Missourian November 30, 2012 at 01:39 AM
PaulRevere - With all due respect, I have consulted for a number of startups and established companies, and the fact is unions aren't the problem. I am the same age as you. I bigger problem is a risk averse managerial culture that more often than not refuses to take the calculated risk. I cannot count the number of times that well-established, publicly traded companies refused to take very safe risks that would have benefited their top line as well as their bottom lines. How do I know these risks would have paid off? Because I saw competitors take them after the fact and win. Hostess is a case of managers thinking that a reduction in the bottom line is the way to win. Creating value is always a more sustainable way to win than cutting costs. You can always create value. You can't always cut costs.
Jack December 03, 2012 at 04:06 AM
I commend Tom Maher on his comments to all that are union haters out there! Believe me I have worked on both sides of the fence, working non-union and currently union, difference If I would have stayed non-union, I would still be barely making over mininum wage, half the benefits, could be let go without any reason, while management benefits from bonuses, trips, hiring brothers, sisters, friends, cousins, etc. that has had no prior experience except they know someone! As for unions I have to say they at least fight for what is right for the company but as well as the union workers! I have done a lot better from working for a place that is union not from sitting on my as$%%%$$. It used to be called an honest days worked for an honest days payed! not he case anymore, The more you do the more they want (management) or (owners) whoever! They want 12hrs squashed into 8hrs worth of work! While management still does the same amount of time or less to do what they have always been doing, If some of these children that are posting comments that are sitting behind a desk because they went to college for 4 or 6 yrs, or because mommy and daddy got them a job, I haven't seen any of those people that actually, said that they have worked their way up to management positions step down to get their hands dirty and try to get the company back on their feet! Instead want to sit back and point fingers and not recognize the real problem why the company is taking a downward spiral.
mike k December 03, 2012 at 04:50 PM
The problem with Unions is that they tie the companies hand with crazy work rules. Hostess is a prime example since they drivers could only deliver certain kinds of products. I think in the old days they referred to that as featherbedding. Another problem with Unions is that they defend poor performing workers. The teacher unions are the worse where practically senile old teachers hang on past their prime protected at all costs by the union. I worked at Mallinckrodt for 30 years in management and saw plenty of instances where the Union would defend workers that came to work drunk, high on drugs, caught sleeping on the job and in at least one instance two union workers were caught screwing in the elevator during the night shift. Most companies with unions suceed in spite of unions but unfortunately many like Hostess do not.

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