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Union Rules were Harder to Digest than Twinkies
Myth: Twinkies have a shelf-life of forever. They don't; they stay fresh for about 25 days.
Hostess: Union Rules were Harder to Digest than Twinkies
Courtesy of Dr. Paul Price
Did union workers simply get their 'Just Desserts' for backing Hostess into a corner with too many unreasonable demands? Consider the evidence.
Union workers have now completed their mission. 18,500 jobs are gone forever.
The national labor bosses stood firm. Labor leaders are proud they stood up to those nasty ‘suits’ [see Entourage for definition] who refused to run a money-losing business simply to continue paying salaries and benefits.
Hostess posted a $341 million loss in 2011 on revenues of about $2.5 billion. Contributing to those 2011 losses:
- $52 million in Workers’ Comp Claims
- Dealing with 372 Distinct Collective-Bargaining Contracts
- Administration of 80 Separate Health and Benefits Plans
- Funding and Tending to 40 Discrete Pension Plans
- $31 million in year-over-year increases in wages and health care benefits for 2012 v. 2011
Uncounted in the above numbers were the outrageous union-imposed rules that made for a too-high-to-bear cost of sales:
- No truck could carry both bread and snacks even when going to the same location
- Drivers were not permitted to load their own trucks
- Workers who loaded bread were not allowed to also load snacks
- Bringing products from back rooms to shelves required another set of union employees
- Multi-Employer pension obligations made Hostess liable for other, previously bankrupted, retirement plan contributions from employees that never worked for Hostess at all
America has come to this. The only defense against insane union demands is the willingness to walk away and close shop.
With General Motors and Chrysler we found that even that remedy wouldn’t work.
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And people wonder why China keeps growing
The so-called Vulture Capitalist thing, is a non-sequitur.
As I have posted here a year ago, ratcheting up the costs for the surviving union corporations, ulitimately kills the entire industry.
Politics trump reason, every time.
Unfortunately, that's just purestrain bullshit. It's just paying into a larger pool spread out with multiple companies so workers would not lose their pensions by changing jobs. Contributions are only made based on the actual liability incured by their own employees. If the fund goes under, that has zero bearing on Hostess in terms of liability. So, sorry, but you're stupidly wrong, and they had been refusing to pay into it for over a year as it stands (while still stealing the employee half of it and sucking it out in the form of high interest loans they forced on the company and insane dividends).
Suck the coffers dry with dividend payments, then loan back the stolen money at high interest. Rinse wash repeat until there's nothing left but debt. Then liquidate it.
You're still focusing on the trees, not the forest...
The reason we have vulture capitalistic PE hostile take-overs is because it has become more profitable to destroy companies in America than run them. And why is this? Because government regs, taxes and the suffocating costs of hiring people have become overwhelming; ie labor unions.
In the 70s, the owners of capital were able to blame our country's economic troubles on high labor costs. The 80s saw the removal of all sharp teeth from the labor force. The 90s saw the end of substantive welfare for the poor. By the 00s, the owners of capital could not blame any of the massive economic troubles on labor. Those economic problems, which exploded in 2008, still persist to this day, and labor still has nothing to do with them, and yet the owners of capital (or borrowed capital—which in our age amounts to the same thing) have the nerve to blame the collapse of Hostess entirely on labor, a long-defanged labor, a labor force that hasn't had meaningful protections or representation since the 70s.
What is clear in all this is that capital longs for the restoration of its legitimacy. It has been operating in the open since 2008 and is now desperate for some kind of idealogical cover, some way to justify ("the market has the best solutions for social problems") its exploitive practices. This exposure cost Romney the election—indeed, the exposure was so bright he couldn't show his tax returns in any real way. He knew that nothing covered the fact of how he and his kind make lots of money.
Your quoted text leads to the conclusion that it was Bain that somehow was involved with Hostess.
It wasn't involved at all. Rather, the key private equity company involved, Ripplewood, is a major contributor to the guy that won the election:
http://www.buybackyourvote.com/company/ripplewood-holdings#t=graph&v=party&se=&st=&y=2012&ch=n
There are plenty of predatory Democrats out there. If anything, it's a job description.
Labor unions are 7% of the U.S. private workforce. Lowest mark in almost a country and they are largely irrevelant. The reason you see this is because of the preferential treatment that corporate debt gets under the US system (more favorable than just about anywhere else in theworld) and a cultural acceptance of it.
"Suck the coffers dry with dividend payments, then loan back the stolen money at high interest. Rinse wash repeat until there's nothing left but debt. Then liquidate it."
- That is pretty much 4 years of high cost business school (+MBA) wrapped into 3 sentences.
Yea, but the real trick seems to be finding a company that is honestly having a little bit of problem and could benefit from some reorganization and drop in with a relatively tiny investment to seize control. Then buying them out and taking on all their debts. Then instead of being earnest about it, you smash it to pieces to retire the old debt asap and turn a tiny bit of profit. At this point, you make your PR moves and get to be the messiah of job saving. To reward yourself, you now take the dividends and replace all the old retired debt with your own crap. It's best to start this process somewhat slowly. After 2 or 3 years, it's time for a new crisis. This is where you begin the crushing process. It's endgame time and that means suck everything dry. Bonus points if you are kind enough to forgive some of the debts (once the principal has been paid off of course) to offset the gains. Once that dried husk of a company is flailing in the wind, you just crush it and walk away.
At any given point, the total profits from this process should be calculated and weighed against any buyout offer. This isn't Fucksgiving Day, you just want your estimated profit or more if an opportunity comes along.
You've got the concept down, but you'll need to work on the charm. Folks have a tendency to pick up on latent contempt.
The key to becoming rich in the USA is your ability to schmooze and bullshit folks with more money than yourself.
Or score a GOVT contract.
You could borrow the money from the union bosses. Then see if you know what you're doing:)
If you had been a campaign bundler, you would know the answer to your question.
so that's is why the truck drivers made $125K. They not only had to drive the truck, but make sure it was Twinkie-free when delivering bread. Such life-and-death decisions can only be handled by a select few.
Whay are people going into debt for a college degree?
"College" is now a place where teenagers can spend 4 care-free years in a country-club atmosphere, while they delay the inevitable transition to "adulthood" - that is, moving back into their childhood bedrooms with fading "Obama" posters on the walls.
Where can you get paid $125k to drive a truck? I want to apply.
Unless you can post some real info other than a talking point, it sounds like bullshit to me.
Do the math.
owned.
I wish all issues were as simple to understand, black and white as this one.
Thank you for clarifying it. For awhile, I was thinking that the union probably wasn't trying to actually cripple the company and destroy all the jobs for its members.
Obviously they are minions of hell, rather than just regular dumb assholes.
"Why are people going into debt for a college degree?"
Why aren't they going into debt by starting something new and failing 'till they succeed rather than going into debt by pre-ordering seats on the Corporate Titanic?
Darwinism is agnostic, evolution blind, and the selfish gene moves on making you happen or not.
Yes , we should all be hedge fund managers becuase they contribute to the welfare of all. Fuckin middle class wanting to earn a decent wage. Greedy union bastards
The fruckin truck drivers delivered us HOSTESS SNACKS, The billionaries steal from us daily.
We should all be billionares then we can steal from each other. Oh fuck nevermind they do that already.
This isn't about hedge fund managers. It's about having a job, and working hard to keep job and your company viable -- or driving your company out of business and being an unemployed loser. Unless you're entrepreneurial (which requires hard work) those are your only options. Pick one. Whining for more doesn't work because there isn't more.
You think there is room for 100,000,000 entrepeneurs in "the market"? Somebody has to take out the trash, drive the buses, teach the kids, you don't think they deserve a living wage for such work.
How many who write and comment on this site are traders? WTF do they "produce" and how are they not "parasites"?
"entrepeneurs in "the market"?
Little Debbie does use Entrepeneurs. Its local delivery drivers are independent. This
was the only way they could operate in many areas without contending with unions. One big reason they
don't manufacture in the North East is unions.
WTF do they "produce" and how are they not "parasites"?
There are two ways to make money, work for it or steal it.
Zero sum financial games: theft or service? Actually we all inherit
a great deal of wealth even if our parents were dead broke. We work to deserve what we get or steal...
Providing liquidity is doing God's Work
So they won't be at the mercy of a national that will cuts their nuts off to make a larger point?
Not that I recommend going into debt for any reason.
Mongo is only pawn in game of life.
The author of this article seems to endorse human slavery
52 milllion in workers compensation claims. The union decieded to shut down Hostess because it is a much too dangerous place to work.
Chronic conditions suffered by workers included repetitive strain injuries such as Twinkie Pinkie, an auditory condition known as Ring Dings and an affliction which beset those assigned to duty in the company freezers known as Sno Balls. The cumulative effects were ho-ho-horrific.
You clearly have no idea what hard work looks like. Nor are you aware of the definition of slavery. One can only assume you are overpaid and underworked.
So there are only two possible solutions? Unions or Slavery? Did it ever occur to you that unions also enslae their members?
And you seem to not only endorse but openly and loudly advocate human stupidity. Try learning this crazy new thing called "math", perhaps it will help you free your mind from its enslavement.
Who is John Galt?
I'm truly amazed they didn't have extra workers manning the trucks besides the driver. One to prepare the stock for the store and another to heft it down the truck steps, another to take it inside, another to open the boxes, and another to stock the shelves, and another to cleanup.
Pity those poor soft drink and beer delivery truck drivers, they have to do all the work by their ity bity selves.
Now THAT is pure evil!
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