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"?

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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