Monday, November 19, 2012

The Real Hostess Story just now Hitting the Fan, well after the Damage is Done.

Why is it when Republicans and conservative raise the biggest stink, it turns out they've either fabricated a story or got every fact wrong? Such is the case around Hostess and the evil unions that destroyed it. CEO Gregory Rayburn voiced an often heard comeback:
"If you don't like the package, go back to work and find another job."

Funny thing, that same sentiment can be directed squarely at conservatives who whine about being forced to be a part of a union job. If you don't like unions, go back to work and find another job, right?

Rayburn forgot to mention an important fact. According to Center for Economic and Policy Research's Dean Baker:
Accepting new concessions would provide no guarantee of job security. In fact, management wanted the unions to agree to the closure of 10-12 plants (of its choosing) as part of a new contract. This means that many of the company’s 18,000 workers would soon have been laid off even if the workers had accepted management’s terms.
Here's a great summary of the new race to the bottom business model using the Hostess bankruptcy as an example, by John Nichols: 
What happens when vulture capitalism ruins a great American company? The vultures blame the workers … the union. And vapid media outlets report the lie as “news.” That’s what’s happening with the meltdown of Hostess Brands Inc.

Americans are being told that they won’t get their Twinkies, Ding Dongs and Ho Hos because the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union ran the company into the ground. The BCTGM workers did not ask for more pay. The BCTGM workers did not ask for more benefits. The BCTGM workers did not ask for better pensions.

The union made wage and benefit concessions ... adjusted to new technologies, new demands ... took deep layoffs (20 percent of the workforce) ... kept working even as the company stopped making payment to their pension fund more than a year ago.

Hostess was smashed by vulture capitalists—“a management team that,” in the words of economist Dean Baker, “shows little competence and is rapidly stuffing its pockets at the company’s expense.”
The ten top Hostes executives pocketed increasingly lavish compensation packages. The Hostess CEO who demanded some of the deepest cuts engineered a 300 percent increase in his compensation package.

In 2011, Hostess earned profits of more than $2.5 billion but ended the year with a loss of $341 million as it struggled to pay the interest on $1 billion in debt. This year, the company sought bankruptcy protection, the second time in eight years. When BCTGM workers struck Hostess, they … were challenging Bain-style abuses by a private-equity group—Ripplewood Holdings—that had proven its incompetence and yet continued to demand more money from the workers. “Our members knew that the massive wage and benefit concessions the company was demanding would go straight to Wall Street investors and not back into the company,” recalled BCTGM president Frank Hunt, who described why the union struck Hostess rather than accept a demand from management for more pay and benefit cuts.

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