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  • iamnowwhat iamnowwhat Nov 17, 2012 4:21 PM Flag

    From the Perez school of greed

    Looks like the Hostess closing story wasn't as simple as employees not accepting pay cuts. More greed, AP style:

    Today, Hostess Brands inc. — the company famed for its sickly sweet desert snacks like Twinkies and Sno Balls — announced they’d be shuttering after more than eighty years of production.
    But while headlines have been quick to blame unions for the downfall of the company there’s actually more to the story: While the company was filing for bankruptcy, for the second time, earlier this year, it actually tripled its CEO’s pay, and increased other executives’ compensation by as much as 80 percent.
    At the time, creditors warned that the decision signaled an attempt to “sidestep” bankruptcy rules, potentially as a means for trying to keep the executive at a failing company. The Confectionery, Tobacco Workers & Grain Millers International Union pointed this out in their written reaction to the news that the business is closing:

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    • tripods Nov 17, 2012 10:12 PM Flag

      The unions required TWO different delivery trucks to deliver cakes versus bread at a retail store. ie unions would NOT allow ONE Hostess truck to deliver both; to "preserve" their two different jobs.

      In a NON union company they would ALLOW one company truck to deliver both twinkies and wonder bread to a retail store. The unions purposely held fast to these inefficient wastefull ways and thus the companies profit was none in a modern era.

      At some point all these union mandated stupid many job classes "to preserve jobs" caused so much waste that the profit collapsed.

      At some point the host dies.

      The postal service could increase their losses by following this dumb model, Have one guy deliver letters; another junk mail; another boxes to a house 8 miles from town.

      The bulk of the costs are in the worker bees labor costs. The union would not budge or be open to a better way of having ONE truck deliver both twinkies and bread to a retail store.

      The union tried to will the poker hand but lost.

      The entire Hostess filling of two sets of delivery trucks also had different worker bees to load them and different workers to bring the stock to the loading areas. ie rings of protected workers where another cannot do it as one guy so that other chaps job is protected. All this protection worked when there was a past boom and wages were lower. Today it just added rings of workers protected by the union. Now in a downturn this super poor model just failed and the union held rigid and thus lost.

      The union is the reason that 18000 will loose their jobs; they just did not care about the Joe average

      • 1 Reply to tripods
      • Yes, unions have shot themselves in the foot many times and that kind of union waste is ridiculous. Years ago I went into a Hi-tech corporation where the non-union engineers had to place schematics on the windows of their lab so the union people couldn't see the engineers move their own oscilloscope a few feet down the bench when they needed to. (the union way would have been to place a work order and when they got around to it on their own sweet time they would eventually show up and move it.) Of course another work order would be needed to move it back. I had to replace a circuit breaker in a piece of equipment I was installing in that lab and since it involved a soldering iron I had to wait till the union person came off their mandated 1/2 hour coffee break to disarm the halon fire equipment (throw a switch) less I set off the extinguishers. That kind of union waste/inefficiency is inexcusable and yes, is the main reason some US businesses are not competitive and profitable. Likewise the similar greed of CEOs looking after themselves first and investors and employees as a far distant second. The judge should not allow Perez to move his bonus money cut to the front of the money grab list ahead of debtors, etc considering his terrible lack of performance. (he is already making far too much salary for his poor performance)