Eric Green here is correct. If unions are not checked, they will continue to
drive one business after another into the ground.The left-wing
teaches that unions can do no wrong, and thus, creates legislation that gives
them more and more power. The inevitable result is that businesses are forced to
pay artificially high wages for less and less work. This is a model that only a
fool would think could be sustained for long.As demonstrated by the
Hostess situation, unions would rather destroy a business than give into sound
economic theory. The union bosses want to earn their money from dues, rather
than having to work for it. They deliberately ignore the central principle that
wages must be earned, not given out as some sort of entitlement. As long as this
view is the predominant one, business will continue to suffer.
No Mr. Green, you're wrong on so many levels.Chicago teachers
went on strike because they'd reached their threshold of pain about the
number of kids in their classes, lack of supplies and equipment, and the
increasingly horrible conditions of their school buildings. Private buildings in
similar states of disrepair would have been condemned as threats to the health
and safety of occupants. "More money for fewer hours" was never part of
their complaint.Hostess employees went on strike because company
executives were cutting wages and benefits while awarding themselves millions in
bonuses even as the company struggled because of lower demand for their
products. Whether it was teachers or people who make Twinkies, the
common issues involved deteriorating work conditions and inept, insensitive
management. When that happens, a strike becomes the workers'
last practical recourse.
Unions did not destroy this company. It was destroyed by poor management and a
flock of vulture capitalists and outfits similar to Bain Capital.The
workers are the losers. The vultures will walk away with million dollar plus
Golden Parachutes. One example being the CEO who just recently was handed a 300%
pay raise. Greg Rayburn was being paid $100,000 PER MONTH for his
"services."At least nine other top executives of the company
also received massive pay raises, including one who received a pay increase from
$500,000 to $900,000 and another received one that brought his salary from
$375,000 to $656,256.How can anyone justify this kind of thing?(Anyone may verify this information by Googling "hostess ceo
One of the benefits of having a union is that it is so easy to find a scapegoat
for the mismanagement of a company. The management at Hostess and the unions
lived happily together for most of the company's history until new
management took over in 2002. In 2004 the union made major concessions saving
the company over $100 million but that money was not reinvested in the company.
Hostess went through a bankruptcy and then demanded more concessions from the
union but the union, remembering they had been fooled once, refused to go along.
Since 2002 Hostess has had 6 different CEOs but none could fix the
company's problems. But let's just blame the union...it's
Why are unions needed now days? We have OSHA and our wonderful government to
protect us from any miss management.
Sorry to confront you with the facts Blue, but teacher's unions are the
reason our schools are failing to teach while we spend more money per student
than any nation on the earth except Switzerland. Case in point; in Michigan
recently, the teacher's union threatened to strike because the school
district suggested the retirement age for teachers me increased from 47 years of
age to a bit older. This same teachers union "graded" its teachers as
100% "highly qualified" while the state gave their school an "F"
for student achievement! Union are entitlement parasites.
Mountanman, you're cherry-picking data, again.US expenditures
per pupil include the cost of health insurance for education sector employees.
Most other nations, especially nations in Europe with universal health-care,
Hostess' problems go way back. They've been in bankruptcy since
2004.CNBC: After Bankruptcy Hostess' "Sales Declined And
Attempts To Roll-Out New Products More In Line With Changing Consumer Tastes
Flopped." CNBC reported that the first round of bankruptcy "wasn't
enough to save" Hostess, adding: "The company's sales declined and
attempts to roll-out new products more in line with changing consumer tastes
flopped." [CNBC, 11/16/12]Forbes: Hostess Has Had Six CEOs In A
Decade. When CEO Greg Rayburn took over Hostess in March 2012, he became the
sixth CEO of the company in a decade. [Forbes, 7/26/12]Wash. Post:
January Bankruptcy Filing Shows Hostess "Would Have Lost Money Without Any
Pension Costs At All." The Washington Post reported in January that Hostess
"lost $250 million in the less than three years since it emerged from its
previous bankruptcy. That means it would have lost money without any pension
costs at all." The Post noted that Hostess "lost money in 30 of the past
37 quarters." [The Washington Post, 1/11/12]Turns out that
Hostess has no treasury department. It apparently doesn't have anyone who
can perform treasury functions at all.
This letter and the facts of reality are so disconnected it's frightening
-- When your compnay executives give themselves $Million bonuses
--and expects YOU [the workers, who actual do the PRODUCING of
something] to take an 8% pay CUT AND a reduction in beneftis is
hardly demanding higher wages! These folks were not making $60K a
year -- more like $25K.They were willing to not only NOT get a pay
raise, Not even just stay even, But they were even willing to take a
pay cut for the company -- Just not that much while the Company executives
gold-lined their greey pockets at their expense.This was rediculous
beyond all reality.Even IF Hostess brand returns by another own
--Me and my family will NEVER buy from them ever again.BTW --
Remember when the NFL got ripped apart when the $Billion owners hired NON-Union replacement Refererees over a few bread crumbs!And
Labor Unions torn down the Iron Curtain -- not the Military, not the
The misstatements being made show exactly why the Hostess union was completely
wrong.A company is funded by private capital. That capital is
managed by a board of directors. The board of directors authorizes the hiring
and paying of all management. Management executes the orders given it by the
board of directors who represent the owners of the company. In a publicly
traded company, those owners may be you and me. The board protects you and me
from unrealistic demands made by those who are hired to produce the product.Wages are paid according to the value of the work being done, not
according to the profits made by the company. The owners (stockholder) are
entitled to receive the profits. The workers are not entitled to receive the
profits. If they want a share of the profits (or losses), they have to buy
stock, just like anyone else.Those who tell us that the worker is
being "used" should open a lemonade stand and see how quickly a business
fails when the workers are paid more than they are worth.
It's okay folks, I'm sure Mitt Romney will create more jobs than the
losses Hostess will have. I mean, it's not like Mitt has anything better to
do anyway. His political career is shot. Maybe he can get back to doing what he
does best! No no no folks, not flip flopping and pandering to whoever is in his
crowd. I'm talking about creating (domestic) jobs! Remember
now, he campaigned soooooo much on being able to create jobs here and not in
China. Without having to be distracted by all the other stuff now Bro. Romney
can focus on creating jobs here!
Mike, are you SURE Greg Rayburn was worth $100,000 per month?And, by
the way, Hostess was not currently run by a board of directors. It has been
purchased and repurchased several times by several different private equity
companies similar to Bain.One source says this: "But the
workers—who are passing through their second company bankruptcy in a
decade—said enough was enough. A typical worker saw his pay cut from
$48,000 to $34,000, or $16.12 an hour, after the company’s first trip
through bankruptcy in 2004.The latest contract demands would have
cut pay to about $25,000, along with significantly higher out-of-pocket expenses
for health insurance. These are poverty-level wages, less than what many workers
would receive on unemployment."Or: "the private equity firm
Ripplewood Holdings, which loaded the company with debt, halted pension payments
and imposed crippling wage and benefit concessions."So the
question remains, WHO is really causing this? I submit it is not the workers or
I will not waste my time reading and commenting on the above comments. I will
however respond to the uninformed comments of Mr Green. His letter demonstrates
a complete and utter ignorance of the facts of both situations but particularly
the Hostess situation. I state unequivocally that Hostess was a victim of
mismanagement plain and simple. Company cash was squeezed from the coffers by
executives until it could give no more. On 2 prior occasions the union gave deep
concessions and watched executives fill their pockets while encumbering the
company with insurmountabe debt. Like most company failures, it's called
Unions blame corporate management, Bain Capital (an insane analogy) and everyone
else but themselves. Things will never get better until unions face reality.
There is no one so blind as someone who will not see. Invoking Mitt Romney is
another tactic of avoidance. Mitt would have made the company viable and Obama
would have given Hostess a government subsidy at tax payers expense. Unions have
killed the goose that laid the golden Twinkie and now they're looking for a
The DNews would do better publishing a feature article about the Hostess debacle
rather than printing partisan opinion pieces without a shed of evidence to back
them up. The comments, as usual have come down on the doctrinaire ends of both
spectrum. Some have tried to present facts here only to be told they don't
"understand". How can anyone understand when the story is only covered
by TV news and several paragraphs in print about nothing but the current state
of the company and workers. Have facts become secondary to politics?
One Old Man, What is the "value" of a worker? It has
nothing to do with the needs of that worker. It has everything to do with the
money that worker brings into the company because of the duties he performs.Do a breakeven analysis on Hostess. How many Twinkies at how much does
the company have to sell to pay a worker $16 per hour. What is the market size
for Twinkies? What is the competition? Most important, how long does it take to
train a worker?The "value"of of most production workers is
very close to minimum wage. Ask McDonalds.If a worker wants more
money he has to be more valuable. He needs to increase his skills. He cannot
expect a "living wage" to push a button and watch a mixer.
It is sad that in our world, we make false heroes of military men who wear a
uniform and claim to fights and freedoms in foreign lands and then demean and
criticize our friends and neighbors who are fighting for their rights and
freedoms in our own town.
Mike RichardWhat is the "value" of an executive? It has
nothing to do with the needs of that executive. It has everything to do with the
money that executive brings into the company because of the duties he
performs.Do a breakeven analysis on Hostess. How many Twinkies at
how much does the company have to sell to pay an executive $100,000 per month?
What is the market size for Twinkies? What is the competition? Most important,
how long does it take to train an executive?The "value"of of
most executives is usually less than the stockholders and board actually pay
them.If an executive wants more money he has to be more valuable. He
needs to increase his skills. He cannot expect a more than "living wage"
to run a company into the ground.
Okay, Mike Richards. So then will you explain how paying Greg Rayburn $100,000
per month (which works out to about $625 per hour) benefits the company?Will you explain how what he does is so much more important than the man
or woman who mixes the dough or adds the cream to the Twinkies?How
many Twinkies per hour are required to pay Mr. Rayburn. Is the company paying
him for what he is actually worth, or is he being paid because of what he was
able to convince the directors to pay him? So are we meeting his worth or
meeting his greed?
I've looked at the salaries paid to union "executives" and wondered
why those "executives" didn't tell union members to get training,
to get skills, to be more valuable. They told under-prepared people ro demand
more without giving more.Failure comes when we believe in false
principles.Teach people that value comes from skills and abilities
not from just being on the job.It is obsene to expect salaries to
exceed value.Overpaid union leaders lie to union members. Increase productivity by increasing VALUE.
Mike RichardsSouth Jordan, UtahSeems to me that a CEO who ran
a nearly 100 year old company into the ground, went bankrupt and ended up
closing the doors certainly isn't worth $1.3 Million.But then
again, that's just me looking at such thaings such as "value" and
"reality".But go ahead Mike -- keep defending them and
blaming the workers who make just a little over minumum wage all you want.
So, Richards, you were asked a very specific question about the value of
executives that run a company into bankruptcy, and yet receive huge wage and
benifit increases. Instead of addressing the question, you changed the subject
to Union leaders. Well, I don't blame you, of course you could have no good
answer to how value is added to a company by incompetent executives receiving
@Mike Richards,Every union I am aware of encourages its members to
increase their skills and knowledge. They provide professional development
opportunities that make the union members more valuable to their employers.
Quite frankly, the idea that unions only exist to create an entitlement society
is a lie. It's time we forget the lies and realize that most unions exist
to increase to quality of life within the communities where they exist. I
don't understand what is so evil about that.
The question about salaries was answered. The board of directors determine the
salary. That principle is clear. Just because you disagree with that principle
does not change anything. Every corporation has a board of directors. That is
required by law. That board is charged to look out for the interests of the
COMPANY, even when the company has been acquired by another company.When I was just a little boy, my grandfather invited all of the family to take
one last ride on the hay wagon pulled by his two workhorses. I didn't
understand the significance of that event. I didn't realize that my
grandfather was telling us that his tractor had replaced those horses. I
didn't understand that the VALUE of those horses had been diminished by new
and better products.Unions are still working with
"workhorses" in a changed world. Technology has reduced the value of
the "button pusher". It's time to move on. Workers must get new
skills if they want a high wage. Bury your head in the sand, but the day of the
"workhorse" is past.
Let's get real personal. The Deseret News had to cut costs. They fired
many reporters who had worked for years at the Deseret News. The revenues could
not sustain the salaries being paid. A decision was made to use AP stories
instead of sending staff out to cover every news event. The result is that the
Deseret News is still in business even if some of the news comes from AP.Hostess employees thought they were worth $48,000 a year. Union bosses
told them that they were worth $48,000 a yea. The real world told them that
they were under-skilled to demand that kind of salary. The employees insisted.
The company closed. Those employees now know that the union bosses were lying.
They now stand in line with all the other under-skilled workers who thought that
union claims were more correct than the real world.
So if the workers at Hostess are so expendable and without "value", then
why didn't the CEO and executives do their own work in their own factories
and just crank out the Twinkies themselves? Think of the money they'd
save!These comments are just one example of a sad tendency in this
country to hold up "job creators" as a law unto themselves while
belittling and demonizing the very workers who make their success possible. The
Mike Richards of the world like to think of themselves as the equals of the Mitt
Romneys and the Donald Trumps, but I'm guessing that they wouldn't
lift a finger to come to their aid, and what's sad is that they'll
probably never realize that fact. It's easier to just claim that others
are "lazy freeloaders" instead of honestly looking at themselves and
where they sit in society, right?
Mike Richards definition of value is what is wrong with America.
When I go to say - McDonald's, I want a hambuger, and the person
behond the counter gets it fo me.That's all I want, that's all I
need to pay for.The cook is a necssacities if I want a cooked
hamburger.EVERYONE else, from the assisant Manager, Manager,
Regional Manager to McDonald's CEO is not what I need or want as a customer
- as far as I'm concerned they ADD no value to my hamburger but are
ADMINISTRATION and simple ADD to the cost of my hamburger, I don't want
them, I don't need them, I don't like paying for them.Try
substituting Management or Administrators when you think about you hatred of
"Government" and the light might come on to your ultra-Conservative
I say let the unions buy out the companies they can't come to terms with
and see just how long they last. They seem to know so much about management and
how a company should be run. Give it a try all you union lovers-- let the world
see what great managers you are. -- put your money where your mouth is.Lets see
some real leadership if you got it instead of crying about those you work for do
it on your own or don't you have that much faith in those who lead you??
Pete, clearly you don't understand the concept of a union, or what a union
does. Unions are not created to run a business, that would be a board of
directors, or some such management structure. Unions are created to represent
labor in their relation with the business. Something similar to what you are
thinking about would be a co-op, where the employees run the business. There are
various examples of this, and they can, and do, function very well. "They seem to know so much about management and how a company should be
run"I imagine they know enough to know that a company
shouldn't be ran into the ground by management. I also
don't see anybody crying, rather I see people embracing that most American
of values, being willing to speak your mind, and attempt to change things for
the better. Even if it is to those who employee you. It's
rather unsettling how many people that claim to be Americans are so willing to
say don't speak up, just accept what you are given. After all, don't
you know, they are the great and wise job creators? Know your place. Pathetic.
To "LDS Liberal" lets assume that the executives gave themselves $2
million in bonuses. If that equivalent amount was spread out over all of the
Hostess company for a year, that would mean that pre-tax, each employee would
get an extra 5 cents per hour.Do you really think the union went on
strike for 5 cents per hour?
Redshirt1701Deep Space 9, UtUnions tore down the Iron curtain
- not US Military superiority.Unions.I'll remember the
vital roles Unions play as I remember those 300 people burned to death in
Pakistan making cheap products for WalMart.
To "LDS Liberal" that is a nice piece of totally altered view of history
which has no basis in reality.If death tolls matter, then I remember
50 million chineese killed to enforce a communist state. I also remember the
millions more killed in the name of socialism.You are still
digressing from the point. Even with $2 million in bonuses, that would amount
to 5 cents/hr for all employees. Do you honestly think that the unions were
fighting to get their members 5 cents per hour more? Assuming that they
represented only 1/4 of the Hostess employees. If the union was demanding just
a $1/hr raise for 1/4 of all Hostess employees, that would result in a labor
cost of $9.3 million/yr, before factoring in additional payroll taxes that are
employer paid.While $1/hr doesn't sound like much for 1 person,
it adds up quickly and can kill a large company like Hostess.
@LDS LiberalYou're a very smart guy and I enjoy reading your
posts even if I don't always agree with them. But you said something in one
of your comments which I have to take exception to. In reference to
your ordering a hamburger from McDonald's you said, "EVERYONE else (not
including the people who ordered and cooked your burger) from the assistant
Manager, Manager, Regional Manager to McDonald's CEO is not what I need or
want as a customer - as far as I'm concerned they ADD no value to my
hamburger but are ADMINISTRATION and simple ADD to the cost of my hamburger, I
don't want them, I don't need them, I don't like paying for
them."With all due respect, are you serious? Have you ever
worked in a restaurant, cause I have? Have you ever planned the building of one
in a new location and been involved in hiring and training employees? If you want to argue streamlining management, that's a good discussion to
have, but to suggest the only people you "NEED" for your hamburger are
the people you see is very short-sighted.
"If the union was demanding just a $1/hr raise for 1/4 of all Hostess
employees, that would result in a labor cost of $9.3 million/yr, before
factoring in additional payroll taxes that are employer paid"9.3
million huh? Well, yeah, they only had 2.5 billion in revenue. So what's
that? 0.0something %. Yeah, totally unreasonable.
"to suggest the only people you "NEED" for your hamburger are the
people you see is very short-sighted."Clark, the place I go to
get my hamburgers has the owner over the grill cooking them. And it's his
daughter that takes my order. The only people I need for my hamburger are the
ones I see. When I go get my deli sandwich, I say hi to the owner. When I go to
get my Philly, I chat with the owner, when I go get my lunch sandwich, I give my
money right directly to the owner. When i go to the bakery, yep, I chat with the
owner, when I go get a cup of coffee, you guessed it, I say hi to the owner.
Yep, the only people I need are the ones I see. And none of these people have to
send any of the money they have earned off to an out of state corporate head
quarters. Yep, you guessed it, I buy locally.