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Some facts about Hostess

  1. profile image0
    JaxsonRaineposted 5 years ago

    1 - The CEO had a salary of $1.5 million, with up to $2 million in long-term bonus compensation. Over a 5 year period, if he got all $2 million, plus $1.5 million a year, that would equate to $9.5 million. Yes, it's a lot of money, but this is why CEO salaries generally aren't the problem: If he distributed all of that income to the employees, that would come out to $102 per employee, per year. If all executive compensation were distributed, the figure would be about $150 per employee per year. 0.2-0.4% of employee's compensation.

    2 - Hostess had 372 different collective-bargaining agreements. Hostess had to maintain 80 different health and benefit plans, and 40 pension plans. Union agreements stated that cake and bread products had to be delivered to a location on separate trucks. Drivers weren't allowed to load or assist in loading. Workers that load bread weren't allowed to load cake. More than double the employees required for any particular delivery were required. Hostess wasn't allowed to make the company efficient. Effectively, the unions engaged in activity that would normally be illegal: price-fixing and conspiring to reduce competition.

    I'm not saying the management was perfect, but consider how shackled they were by the unions. A company without union labor would be able to consolidate operations, consolidate benefits, and negotiate wages that the majority were willing to negotiate.

    Think about it. 6000 employees were able to overrule the voice of 12,000 other employees, and all of management, and cause the company to close.

    1. bBerean profile image61
      bBereanposted 5 years agoin reply to this

      Although your post won't be popular among the masses, it is an accurate snapshot of what has been happening countless times and will continue to happen in this country under the current climate.  Personally, I am witnessing something very similar right now, but am helpless to do anything but watch the slow burn already in motion.

    2. tussin profile image60
      tussinposted 5 years agoin reply to this

      When dealing with toxic chemicals, it's best not to mix them.

      1. profile image0
        JaxsonRaineposted 5 years agoin reply to this

        Lol, that's funny

    3. profile image56
      Asno Mudoposted 5 years agoin reply to this

      That is a ridiculous way to look at remuneration.  Perhaps the President of America should be paid the equivalent of $100 per American ... and so on.

      Hostess had clearly failed pre-2009 it was given a second chance and the CEO failed to turn the company around, so why should he get paid a single penny for being a failure?

      The owners of the capital behind Hostess had basically got everything they figured they could get out of it ... heck robbing the pension fund is a pretty good haul.

      The largest single unsecured creditor was the pension company to the tune of ~900m

      The free market killed Hostess, there simply wasn't the demand for the product anymore.

    4. Tom Joad II profile image60
      Tom Joad IIposted 5 years agoin reply to this

      If it were not for the union strife I'm sure Hostess would be blaming Obamacare.

  2. innersmiff profile image73
    innersmiffposted 5 years ago

    In agreement. Bumping for a response.

    1. profile image0
      JaxsonRaineposted 5 years agoin reply to this

      Nobody will respond. This is Bain Capital all over again. I posted facts, backed by SEC documents, going as far as to notate page and line numbers if necessary, but the haters gonna hate.

      I would love to hear someone who is pro-union explain why it is OK for a group of providers to get together and fix prices for a service, but illegal for a group of providers to get together and fix prices for a service.

      1. bBerean profile image61
        bBereanposted 5 years agoin reply to this

        From my experience most of the folks in the union are not completely for the union.  Even if they see the company being ruined by the union though they are afraid to voice their opinion for fear of retaliation.  They too, have to watch it burn.  Not likely anyone will speak up, I suppose.

      2. Josak profile image61
        Josakposted 5 years agoin reply to this

        For the same reason that the burden of proof lies on the state, because the state (or the company) with it's larger resources could otherwise overwhelm the individual (or the labourer) I don't know about this particular example because I have not had time to study it and it's entirely possible that this union did something dumb/wrong but I will say that the issue is usually much larger than a single company, if a union gives in on one issue to one company than all companies will demand the same and soon the union has lost any power or ability to protect it's workers. Unions do their jobs successfully by getting better wages and conditions for their charges and the statistics bear out that they do just that.

        The coal miners unions suffered from making this mistake in giving too many concessions until the unions became meaningless and powerless and now wages have fallen and the rate of things like black lung is actually rising.

        1. wilderness profile image97
          wildernessposted 5 years agoin reply to this

          Now that sounds like a good answer.  The union is quite willing to forego their responsibilities to the union members paying their dues, sacrificing them and their jobs for the good of the rest of the union. 

          Of course, we see the same type of thing when unions "deal" with employes of companies that have chosen to set their own destiny rather than let the union VIP's do it for them.  Drive the non-union company under, sacrificing the non union member that just wants to be left alone to do their job.  All for the good of the country, or so goes the reasoning.

          1. Josak profile image61
            Josakposted 5 years agoin reply to this

            Yeah it's a balance of morality issue if you like. The point is though the union has a job to do, it's not a charitable organization out to help society at large it's job is to help union members which means the majority of their charges to have better wages, better treatment etc. sometimes that requires making tough choices, there is nothing wrong with making tough choices.

            1. wilderness profile image97
              wildernessposted 5 years agoin reply to this

              Just a little "collateral damage", isn't it?

              The unions aren't concerned with the working stiff, any more that any other politician or corporate manager is.  They are concerned with the pocketbooks and power of the top level union management.

              1. Josak profile image61
                Josakposted 5 years agoin reply to this

                See there we disagree I have volunteered for unions and have a pretty good knowledge of their inner workings, I do that because I had my house an my family and my quality of life etc. saved by a union after I suffered a workplace accident the medical bills for which I would never have been able to pay without the legal aid etc. I received from my union, most people working for and in unions generally for relatively low pay are people who believe in the cause of making a better "world" for hard working Americans and god bless them for it.

                More to the point it's an empty argument entirely, it's like saying a company does not care about the consumer only their own profit, that may be true but because the company wants customers (or union laborers) it has to provide a good service that people want, the statistics bear out that unions do exactly that as to this day union workers are much better compensated than non union workers.

                As for collateral damage, as I said those are tough decisions but making tough decisions is good, avoiding making tough decisions isn't good it's cowardice.

  3. secularist10 profile image85
    secularist10posted 5 years ago

    We've already seen what having no unions produces. It's not like we don't know. It's not like this is a theoretical exercise. It's not theory, it's history. Specifically the history of the working class in the late 19th and early 20th centuries (when governments were actively anti-union... how's that for government intervention in the marketplace?), and in the late 20th and early 21st centuries.

    The purpose of unionism is to level the playing field between employers and workers. In the process, some unions have gotten so big and powerful, now they are even more powerful than individual businesses. So what is needed is a balance.

    1. Josak profile image61
      Josakposted 5 years agoin reply to this


  4. profile image55
    h8kliedposted 5 years ago

    The product they offer is simply out of touch with common society. Once relevance is lost profits subside.