Over the last year, we’ve covered the fact that Twinkie the Kid is on life support. The Hostess company required a new agreement from the Baker’s Union to get bankruptcy protection. Unfortunately, several hundred of the Bakers chose to fire themselves this week, closing three facilities permanently. Apparently, the rest of the Bakers seem intent on putting themselves, and all other employees, out of work. Mish’s Global economic Trend Analysis has the rest…
It’s do or die for 18,000 Hostess workers including 5,000 in the bakers’ union.
Hostess, the maker of Twinkies, Ding-Dongs, Ho-Ho’s, and Wonder Bread has given the union a firm order to accept wage cuts else the company will liquidate.
Only fools would voluntarily vote for liquidation liquidation, but with the clock ticking down to mere hours to come to agreement, it appears the fools will win the day.
Please consider Hostess to liquidate if bakers’ strike continues through Thursday. Hostess Brands said Wednesday that it will go into liquidation unless bakers striking in protest against a new contract imposed in bankruptcy court return to work by the end of the day Thursday.
“We simply do not have the financial resources to survive an ongoing national strike,” Hostess CEO Greg Rayburn said in a statement.
The liquidation would result in Hostess’ nearly 18,000 workers losing their jobs. The bakers’ union represents around 5,000.
The union did not immediately respond to a request for comment Wednesday, but has called the concessions demanded in the new contract “outrageous.”
“Our members are on strike because they have had enough,” bakers’ union president Frank Hurt said in a statement Tuesday. “They are not willing to take draconian wage and benefit cuts on top of the significant concessions they made in 2004 and give up their pension so that the Wall Street vulture capitalists in control of this company can walk away with millions of dollars.”
The part of this that really gets to me is that out of the 18,000 plus workers at Hostess, only 5000 get to make the choice for the rest. But that is socialism for you. The few decides the fate of the many, and then, they call it “democracy.”
And how serious is this threat? This serious:
The Teamsters meanwhile are urging the smaller union to hold a secret ballot on whether to continue striking. Citing its financial experts who had access to the company’s books, the Teamsters say that Hostess’ warning of liquidation is “not an empty threat or a negotiating tactic” but a certain outcome if workers continue striking.
There’s almost 19 thousand jobs at stake, here, and as far anybody can tell the striking unions seem to be operating under the assumption that a nebulous somebody will swoop in to restart production, once Hostess is liquidated. This is considered to be unlikely by pretty much everybody else involved in the situation, and by “unlikely” I mean “barking mad insane.” It’s pretty diagnostic that the Teamsters – which is a union that is not unfamiliar with hardball tactics – is trying to wave off the strikers. It’s even more diagnostic that the strikers seem absolutely determined to run the company into the ground, and probably expect applause afterward.
So, either the Baker’s Union is full of idiots, or they are working on behalf of a “nebulous somebody” out there that is going to get the company at a fire sale price, and then treat the unions bosses to some cash? There is, of course, no evidence of that, but it sure does smell, doesn’t it?