Green Room

Unions drive America dangerously close to the Twinkie cliff

posted at 12:50 pm on November 13, 2012 by

A bakers’ strike has forced three plant closings across the Hostess Brands company, and it could get worse:

Twinkie-maker Hostess Brands said Monday that it could go into liquidation if its bakers continue striking in protest against a new contract imposed in bankruptcy court.

The company announced Monday that it was closing bakeries in Seattle, St. Louis and Cincinnati in response to the strike, cutting 627 jobs in total. The bakers’ strike, which began last week, continued Monday at around 24 of Hostess’ 36 plants, and Hostess CEO Greg Rayburn said the firm could close more bakeries or even move into liquidation if workers don’t return to their jobs soon.

Hostess has been struggling for some time, filing for bankruptcy earlier this year (its second such filing in 10 years). The bakers, who make up about a third of Hostess’ work force rejected a contract accepted by the company’s other major union, the Teamsters. Some Teamsters have crossed the bakers’ union picket line, but that may not last.

The Wall Street Journal wonders if threats to shut down more plants or liquidate are mere bluffing. Verdict: maybe, but there’s reason to believe they’re more credible than the last time this came up, as Hostess leadership tried to influence the aforementioned contracts with threats of plant closures in September.

The big reason: this time, the strike really is hitting the business, causing genuine capacity issues at some plants which cannot operate with the number of workers they have left.

The question moving forward is whether the shuttering of plants will convince other striking workers that their jobs are genuinely at risk, or whether it will intensify the passions on the labor side and deepen the strike — and potentially lead to retaliation from the Teamsters.

CNN outlined the details of the deal the Teamsters accepted in September, noting that the bakers’ union had been quiet during negotiations before rejecting the deal in a surprise move.

The proposed new labor deal consists of an immediate 8% wage cut and work rules more favorable to the company. Employer contributions for health insurance would decrease 17%. Hostess contributions to multi-employer pension plans would cease until 2015, at which point the current required level of funding would plummet from $100 million to $25 million. According to Rayburn, the proposal has been endorsed by Hostess’s key secured lenders, which are led by hedge funds Silver Point Capital and Monarch Alternative Capital. One estimate put cost savings for Hostess in the neighborhood of $200 million.

Ho Hos, Ding Dongs, Twinkies, Wonderbread. This is what’s at stake.

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I wish someone would explain to me the logic in picketing a company in bankruptcy. Seems to me driving them out of business will be a whole lot worse for those employees than any wage or benefit cut.

changer1701 on November 13, 2012 at 12:53 PM

Are these people asking to get lynched or what??

CurtZHP on November 13, 2012 at 12:53 PM

The pot legalizations might help.

forest on November 13, 2012 at 12:55 PM

Someone needs to explain to these striker that Hostess has, in this awful economy, increasingly become a luxury brand for a lot of people. Everyone I know buys store brand unless they absolutely can’t stand it.

Rocks on November 13, 2012 at 12:57 PM

The hostess problem is actually a combination of the union and terrible decisions, including ill-advised acquisitions, by management. This is their second bankruptcy in 8 years, as they were in bankruptcy from 2004-2009.

It’s just a horribly run company. Unions shutting it down may be a blessing at this point. Let someone else step into the void.

AngusMc on November 13, 2012 at 12:59 PM

Someone needs to explain to these striker that Hostess has, in this awful economy, increasingly become a luxury brand for a lot of people. Everyone I know buys store brand unless they absolutely can’t stand it.

Rocks on November 13, 2012 at 12:57 PM

Yes.

Who ever said that union workers are smart? They listen to leadership rather than themselves. Critical thinking skills are a diminishing talent these days. People can very seldom link B to A, let alone C to B.

herm2416 on November 13, 2012 at 1:03 PM

Get Romney in there to fire everyone and send all of our Twinkies and birth control pills to China.

forest on November 13, 2012 at 1:04 PM

Shut the place down and let the truckers talk to the bakers.
I am sure someone will see the light.

Jabberwock on November 13, 2012 at 1:21 PM

Things are going to get really nasty as our resident socialists run out of other peoples money.

gwelf on November 13, 2012 at 1:25 PM

Someone needs to explain to these striker that Hostess has, in this awful economy, increasingly become a luxury brand for a lot of people. Everyone I know buys store brand unless they absolutely can’t stand it.

Rocks on November 13, 2012 at 12:57 PM

Little Debbie, I think they are non-union too.

Deanna on November 13, 2012 at 1:28 PM

Uh oh, now the unions have really p-ssed off Gov. Christie.

Doughboy on November 13, 2012 at 1:29 PM

My husband works for Hostess. They are a joke, both the management AND the union. He HATES the union and this was his first experience working in a union.

So far his plant has not started picketing and he will absolutely cross the picket line.

Starting next week, he will have a 25% reduction in wages and benefits, but he’ll have a job.

If it closes, 18,300 people will be out of a job. Welcome to Obama’s America.

Hey, maybe then I can join in on the food stamps.

Chocktopus on November 13, 2012 at 1:36 PM

A brand I won’t miss. Also, a bunch of union tools out of work means less membership, less revenue for unions, so keep killing yourselves, please.

Xasprtr on November 13, 2012 at 1:41 PM

thank God for generic hohos

burserker on November 13, 2012 at 1:41 PM

I like Twinkies. But my wife normally buys the store brand stuff. Can’t say anything about the management or union but it does seem a bit like cutting off your nose to spite your face don’t you think? It’ll be sad to lose all those jobs but then I would imagine that some other company will pick up the pieces and re-open as non-union.

AnOldMan on November 13, 2012 at 2:03 PM

For years, I bought Little Debbie products because I could not afford Hostess. Over the years, I have grown to like the taste of Little Debbie products over the taste of Hostess products. And I still save money. And I absolutely refuse to buy Wonder bread. I was raised on Wonder bread, but as soon as I discovered Rotella and Orsi (local commercial bakeries) Italian breads, I stopped buying Wonder bread. (Ironically, my kids think Wonder bread is a treat because they never got it as kids. LOL!)

So if the Hostess empire goes bust, it’s no loss to me. Maybe the loss of all those jobs because of union intransigence will be an example to the rest of the unions.

catsandbooks on November 13, 2012 at 2:06 PM

Hey, maybe then I can join in on the food stamps.

Chocktopus on November 13, 2012 at 1:36 PM

Maybe not. The Feds will be cutting food stamp amounts because of their formula for deciding how much people get. It is part of the COL and since last winter was warmer in many states the cost of fuel and electricity went down, and also natural gas rates had gone down. So the feds will utilize that part of the formula to cut back on food stamp amounts, assuming people have more money to spend on food now. Already happening in Ohio.
http://www.toledoblade.com/State/2012/11/12/Ohioans-food-stamp-aid-to-be-cut.html

Deanna on November 13, 2012 at 2:09 PM

For me, it doesn’t get any better than Tastykake’s Chocolate Juniors. Practically lived on them through my senior year of high school. The problem is they are usually very expensive, so I only ever buy them when they’re on sale.

CurtZHP on November 13, 2012 at 2:13 PM

First pizza prices are going up and now they’re coming after the .

You asked for it, America. Michelle Obama cackles and rubs her hands together as they browse through luxury vacation brochures.

Moesart on November 13, 2012 at 2:18 PM

The answer is clear–the bakers have to be a public union like the UAW. Then they can demand anything they wish and the Democrats will happily pay it knowing that a significant percentage will be returned as political contributions.

iconoclast on November 13, 2012 at 2:32 PM

Maybe not. The Feds will be cutting food stamp amounts because of their formula for deciding how much people get. It is part of the COL and since last winter was warmer in many states the cost of fuel and electricity went down, and also natural gas rates had gone down. So the feds will utilize that part of the formula to cut back on food stamp amounts, assuming people have more money to spend on food now. Already happening in Ohio.

I wasn’t at all serious, Deanna. I still have my job. However, why shouldn’t I get mine, right? I keed.

Even though my husband was employed by Hostess, I bought what was on sale. There are only a few things I have brand loyalty. Best Foods Mayo being the main item. Bread, not so much.

Chocktopus on November 13, 2012 at 2:34 PM

There’s a cookie plant in Princeton, KY that makes (as far as I can remember) Graham Crackers for just about every brand of Graham cracker in the U.S. the only difference is the box, the crackers are the same whether if for a store’s private brand or Nabisco.

I would think the Hotess plants have a similar arrangement, the same product, just different brand boxes. Since the generics cost a little less they might be doing themselves out of a brand label job regardless of their actions.

I quit trying to figure out unions when the Pilots union essentially forced American into bankrupcy just to show the “suits” that they were willing to stand on “principal” regardless if they actually had jobs at the end of the day.

Modern “for profit” unions are suicidal

E9RET on November 13, 2012 at 2:50 PM

Here’s a video of fired workers going off on Hostess,
calling them ‘cowards’ for not coming down and explaining things
to them personally.
http://www.thegatewaypundit.com/2012/11/union-workers-lash-out-at-hostess-after-plant-closed-went-on-strike-now-theyre-out-of-work/
Dude, they ‘explained’ what would happen to your union leadership.
Go off on them, why don’t you?
Idjits.

mrt721 on November 13, 2012 at 3:01 PM

I would think the Hotess plants have a similar arrangement, the same product, just different brand boxes. Since the generics cost a little less they might be doing themselves out of a brand label job regardless of their actions.

Kind of, some store brands have slightly different formulas. The Hostess plant my husband works at also makes the hotdog and hamburger buns for the Steak and Shake here and for the School District lunches. They used to have the account for Kroger bread here, but lost that account last summer.

Chocktopus on November 13, 2012 at 3:23 PM

The unions now think that Obama will bail them out like he did with GM….

Problem is – Michelle hates what they make…..

I think we are seeing the last days of the twinkies…..

Maybe the laid off workers can go work for GM or get a green energy job???

I heard the TSA was going to form a union….

redguy on November 13, 2012 at 3:45 PM

Ho Hos, Ding Dongs, Twinkies, Wonderbread. This is what’s at stake.

No great loss. The only ones I like are the ones with peanut butter in the middle. What are they called, Funny Bones? I haven’t had them since I was a kid.

UltimateBob on November 13, 2012 at 3:48 PM

Funny timing. I just watched Ghost Rider II (don’t judge me) and there was a twinkie scene that would make anyone laugh/cringe/possibly swear off them.

Don’t hold out for a bail out Hostess bakers. You know what Obama’s first reaction to a bun in the oven is don’t you? Yeah, I went there.

CitizenEgg on November 13, 2012 at 4:05 PM

Funny timing. I just watched Ghost Rider II (don’t judge me) and there was a twinkie scene that would make anyone laugh/cringe/possibly swear off them.

Don’t hold out for a bail out Hostess bakers. You know what Obama’s first reaction to a bun in the oven is don’t you? Yeah, I went there.

CitizenEgg on November 13, 2012 at 4:05 PM

Hey they are messing with EBTer’s staples there.

EBTer’s are going to be force to start getting beans and rice if this keeps up.

esnap on November 13, 2012 at 4:23 PM

If only twinkies were made of arugula…. Hey, win – win

Afterseven on November 13, 2012 at 5:30 PM

The pot legalizations might help.

forest on November 13, 2012 at 12:55 PM

Pot does a wonderful job suppressing hunger pangs.

Yes.

Who ever said that union workers are smart? They listen to leadership rather than themselves. Critical thinking skills are a diminishing talent these days. People can very seldom link B to A, let alone C to B.

herm2416 on November 13, 2012 at 1:03 PM

The lack of knowledge on the part of most of our citizens is what Got Obama elected. The worst part is that every time I try to educate a fellow citizen they plug their ears and cease listening.

This won’t end well.

I wish someone would explain to me the logic in picketing a company in bankruptcy. Seems to me driving them out of business will be a whole lot worse for those employees than any wage or benefit cut.

changer1701 on November 13, 2012 at 12:53 PM

Intelligence has ceased to be a union policy a long time ago.

Chaz706 on November 13, 2012 at 5:37 PM

It’s just a horribly run company… Shutting it down may be a blessing at this point. Let someone else step into the void.

AngusMc on November 13, 2012 at 12:59 PM

Are you sure you’re not talking about Lucasfilm?

WeekendAtBernankes on November 13, 2012 at 6:17 PM