Hostess: The Part No One Is Talking About

Yesterday, I had a conversation with a friend (completely unrelated to this situation) that went something like this:
Him: Unions are bad!
Me: Well, they do encourage some stupid stuff sometimes, but they’ve done a lot of good too.
Him: Yeah, a hundred years ago when they were needed.  Now they destroy the economy, education, and every other thing they touch.
You see, I believe in Free-Market Capitalism.  I do.  Of all the other socio-economic choices out there, it’s the best option.  That doesn’t mean it is without faults.

The one HUGE downside of Free-Market Capitalism is that the only bottom line that truly matters is the OWNER’S bottom line.  Not the employees.  A business owner is not compelled in any way to look after the interests of his employees.   For the most part, when you look back through the history of company’s, you don’t find people like Milton Hershey, who built a town around his factory and made sure his employees and their families were well-taken care of, educated, etc.  You find people who were willing to employ children at slave wages.  You find restaurant chains and other companies taking the costs out vengefully on their customers and their employees by raising costs (that part is kind of acceptable, except in cases like this) and on their employees by playing tricks like working them ALMOST full-time so they don’t have to pay out benefits, but still giving them enough hours to become, essentially, enslaved to the company. (When you add in the Obamacare situation, it just gets ridiculous)

But sometimes, unions take it too far.

I’ve tried to write this paragraph a few times.  The problem is, I always sound angrier, meaner and more upset than I actually am.  See, here’s the thing: I woke up this morning to find (at last count) 17 posts on Twitter and FB of people complaining about Hostess, Twinkie-making company extraordinaire, closing it’s doors for business.  I’ll paraphrase: “Oh no!” they cry. “No more twinkies!”

Now, I’ve never really been a fan of Twinkies.  I was more of a fruit pie guy, especially the old school ones with the Peanuts characters on the packaging.  But this is about more than Twinkies.  The Hostess family of products covers Ho-Ho’s (a snack especially dear to fans of LOST), Donettes, Suzy Q’s, Ding-Dongs and Zingers.  Not the healthiest of menu’s to be sure, but under the Hostess umbrella are brands such as Wonder (as in Wonderbread), Nature’s Pride (my family’s favorite breads.  No artificial flavors or colors, no trans fats, no artificial preservatives and no high fructose corn syrup.  That “Healthy Multi-Grain” loaf is incredible), Dolly Madison (the aforementioned Fruit Pies, and other fun pastries), Home Pride, Merita, Drake’s, and Beefsteak (oddly another bread line and not, in fact, all about cows).

Peoria Strike

You see, a nationwide strike by employees of only one of the unions the company employs – Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) – has, essentially, crippled the company.  The board of the company authorized the slow down to maximize estate value.  This came after Hostess Brands permanently closed three plants as a result of work stoppage.  The company announced that it would have no other choice than to liquidate if employees did not return to work and implement normal working conditions by 5 p.m., Nov. 15.  The BCTGM threatened members with heavy fines if they crossed picket lines.  The deadline came and went with no workers returning, and now Hostess Brands is closing its doors.

But what does that mean besides no more Twinkies?

Hostess Brands had an unprofitable cost structure.  Much of this is due to union wages and pension costs, but in addition to that the offer made to the BCTGM included wage, benefits and work rule concessions, as well as giving the 12 unions employed by Hostess Brands a 25% ownership stake in the company.  That offer wasn’t enough for the BCTGM. The union business agent said he’d prefer to see Hostess sold.

So, what this means in REAL numbers is this.

  • 33 Bakeries – Closed
  • 565 Distribution Centers – Closed
  • 570 Bakery Outlet Stores – Closed
  • 5,500 separate delivery routes – Ceased
  • 18,500 Employees – Out of Work

In today’s economy, where we have to play “Let’s Have Fun With Math” to get a 7.8% unemployment rate, but the numbers have obviously been manipulated, it is unthinkable to me that ANY union, tasked with representing the interests of the workers would allow almost 20,000 people to be put out of work (with the tangential numbers incalculable. But here’s an example.)

I’ve tried writing a paragraph that will end this post on a positive note.  I really like to do that.  But I just can’t find one.


Please note: I reserve the right to delete comments that are offensive or off-topic.

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