We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Chief Executive Gregory Rayburn said in a statement. “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders,” Rayburn added. Union President Frank Hurt said on Thursday that the crisis at the company was the “result of nearly a decade of financial and operational mismanagement” and that management was trying to make union workers the scapegoats for a plan by Wall Street investors to sell Hostess.
The news that Hostess Brands, the makers of iconic sugar bombs like Twinkies and the classic but disturbingly tasteless Wonder Bread, is going out of business comes as a bit of a shock to most Americans. If you look a bit deeper, though, at it’s core it seems to be the very definition of the conflict between management and labor. The details and history of Hostess’ demise aside, the question at the core of this saga seems to be much workers can and should be expected to give back to a company in order to help it survive (and how much hypocrisy management can display as it continues to squeeze). Management is blaming the intransigence of unions, which is always an easy fall-back position to take, but the reality goes a fair bit deeper.
Hostess has been in bankruptcy twice since 2004. Workers had already given up a good deal in order to keep the company afloat and keep their jobs. Management seemed to believe that their first reaction when difficulties arose was to go to the workers and demand more concessions. At some point point it has to be reasonable for workers to say, “Enough!” and stand up for themselves and their families. Keeping their jobs is all well and good, but if the eventual result is that their pay and benefits are a shadow of what they once were, when does preserving jobs become a secondary consideration? At some point, workers should have the right to draw a line in the sand and make the case that they’ve given enough and they deserve to be fairly compensated for the work they produce.
Hostess said a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union that began last week had crippled its ability to produce and deliver products at several facilities, and it had no choice but to give up its effort to emerge intact from bankruptcy court….
Hostess had given employee a deadline to return to work on Thursday, but the union held firm, saying it had already given far more in concessions than workers could bear and that it would not bend further. Union officials blamed mismanagement for the company’s woes.
The company, which filed for bankruptcy in January for the second time since 2004, said it had filed a motion with U.S. Bankruptcy Judge Robert Drain in White Plains, New York, for permission to shut down and sell assets.
It’s easy for management to blame the unions for being “inflexible” or “intransigent,” but when workers have already given back a significant portion of their pay and benefit, how much more can be expected of them? Does management have the right to continually attempt to squeeze ever more and larger concessions from their work force? And what concessions have Hostess managers made? Is senior management continuing to draw six-and seven-figure salaries despite the concessions they demand from their workers? (As it turns out, the answer is a resounding “yes.”)
BCTGM members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.
The hypocrisy seems self-evident, no? How can the rank-and-file at Hostess interpret the outsized rise in management compensation as anything but a slap in the face and an indication that they’re held in very low regard?
I’m asking these questions because I don’t know all the answers. Not being fully versed in Hostess’ history of labor-management relations, I can’t speak to this issue authoritatively, other than to ask questions. On the surface, this smacks of union-busting, especially considering the concessions Hostess’ workers have made over the years. If management has a case to make, they should make it, rather than reflexively lay responsibility for Hostess’ demise at the foot of the union. That’s a lazy and not very credible argument, and it leaves casual observers like myself wondering why another case of apparent attempted union busting is allow to go unchallenged.
Personally, I can’t remember the last time I’ve had a Hostess product. Wonder Bread is crap, and their line of sugar bomb cakes and treats are nutritional black holes. That said, I know there are millions of Americans who feel differently and are undoubtedly upset at the news that Hostess is going belly up.
Not to worry, though. This being America, someone will buy the rights to Hostess’ products and go back into production with poorly paid non-union labor…if they don’t move manufacturing overseas altogether.
Greetings from Third World America….
