Tuesday, June 25, 2013

Hostess Union Workers Put Themselves Out of Work

Everyone has heard about Hostess Bakeries going out of business last year.  After a history of losing money, the company told employees last year that it was cutting wages 8 percent and cutting benefits some 27 to 32 percent. This triggered a strike. Their unions (Teamsters and Baker's Union) had been on strike starting in November of 2012.  From ABC News:
 Hostess CEO Grey Rayburn said the faltering company cannot handle the industrial action.
"We've been very straight forward that the business can't withstand the significant work stoppage," he said. "If this strike continues, there is certainly a risk that Hostess will go out of business."
Well, he wasn't kidding.  I suggest that, next time, Union leadership take management a little more seriously. Oh wait, there won't be a next time.  Now 18,000 union members are without a job.  I read where the Teamsters had looked at Hostess' finances and concluded that pay cuts were necessary but the Baker's Union would have none of it.   I'm surprised the company didn't relocate to Mexico.

Now we hear that the company is being resurrected by venture capitalists without union labor.  From ABC News:

The company had imposed a contract that would cut its 19,000 workers' wages — 15,000 of whom belonged to the workers from the Bakery, Confectionery, Tobacco Workers & Grain Millers International Union (BCTGM) — by 8 percent. (The Teamsters was Hostess' largest union, followed by BCTGM.)

The contract would have also cut benefits by 27 to 32 percent.    Hostess filed for Chapter 11 in January 2012. In November 2012, the company announced it would be shutting its doors for good. By that time, it had lost about $1.1 billion, largely due to bankruptcy filings.
 The newly reorganized company will not use Union labor.  So, the BCTGM union put themselves out of work.

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