The bakers’ union rejected a deal by the court to reduce salaries by 8% in the first year of a five year agreement. Ultimately when not enough of them would cross the picket line Hostess decided it could no longer weather the strike and has decided to liquidate the company. This will cost 18,500 people their jobs. For those in the bakers’ union that can’t do math, that’s a 100% reduction in salaries for everyone.

Here’s the low down:

CNN MONEY – Hostess Brands — the maker of such iconic baked goods as Twinkies, Devil Dogs and Wonder Bread — announced Friday that it is asking a federal bankruptcy court for permission to close its operations, blaming a strike by bakers protesting a new contract imposed on them.

The closing will result in Hostess’ nearly 18,500 workers losing their jobs as the company shuts 33 bakeries and 565 distribution centers nationwide, as well as 570 outlet stores. The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union represents around 5,000.

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” said CEO Gregory Rayburn in a statement. …

Asked if the shutdown decision could be reversed if the Bakers’ union agreed to immediately return to work, he responded, “Too late.”

***

In September, one of its major unions, the International Brotherhood of Teamsters, voted narrowly to accept a new contract with reduced wages and benefits. The bakers’ union rejected the deal, however, prompting Hostess management to secure permission from a bankruptcy court to force a new concession contract on workers.

The Teamsters union, which represents 7,500 Hostess workers, has been sharply critical of the smaller Bakers’ decision to strike, saying it was forcing the company to the cusp of liquidation. The Teamsters said Thursday that the Bakers’ union should hold a secret ballot vote on the company’s offer, rather than the voice votes that were held in union halls around the country that authorized the decision to strike.

“It is difficult for Teamster members to believe that is what the [Bakers union] Hostess members ultimately wanted to accomplish when they went out on strike,” said the Teamsters’ statement.

The Bakers’ union has made several statements earlier in the week saying management is to blame for the condition of the company, not the strike.

The new contract cut salaries across the company by 8% in the first year of the five-year agreement. Salaries were then scheduled to bump up 3% in the next three years and 1% in the final year.

Hostess also reduced its pension obligations and its contribution to the employees’ health care plan. In exchange, the company offered concessions, including a 25% equity stake for workers and the inclusion of two union representatives on an eight-member board of directors.




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156 comments
nikki b
nikki b

I must say it really is amazing that the conservatives have actually convinced you that unions are bad! Incredible. I never in my life thought I would hear such a thing from the middle class/working class of america. They have really brainwashed you. Stop believing corporations have your best interests at heart, because they don't.

xerocky
xerocky

It's much more complicated than all that.

chatterbox365
chatterbox365

There was a time when unions were needed and were instrumental in changing the workplace for the better. As I stated in another post, the days of Norma Rea are gone. Government regulations and state laws provide protection for workers.

Unions only make up 1-2% of today's work environment and most companies get along fine without them.

Business has changed and what worked 100 years ago, 50 years ago, 25 years ago, does not work today. In case you didn't know...we are a global economy

And how much mismanagement and wasteful spending goes on in a union organization? While the leadership has their people strike with no pay, they continue to collect their salaries.

If Hostess was looking for a way out, then the Bakers' Union handed it to them with a big red bow. Now Hostess can rid itself from the parasitic union and really turn the company around.

drphibes
drphibes

Twinky the Kid is a cowboy. His all american values won't allow him to be pushed around by greedy unions. He'd sooner get out of Dodge altogether. And that's just what he did, pardner.

Ruth Pinkston Kirkland
Ruth Pinkston Kirkland

When the employee's give their voice to the union they lose control of their choice. That is too bad that workers and unions alike couldn't understand the economics of the decisions all over the world are now finding themselves in. The conflict of how do we as a company keep the doors open verses the stubornness of unions and people. I'm affair we will be seeing more of this in the unfortunate new year. There are consequences for the decisions many made 1 1/2 weeks ago and they are happening in full force. Sad to see our country fall from the inside out.

chatterbox365
chatterbox365

I'm going to miss my Twinkies, but let's hope some other company or equity firm sees the value in the branding and buys Hostess. How about Romney?! Even though he lost the presidency, he can redeem himself by saving our Twinkies.

Gillette went through the same thing and they came back from the dead.

And yes, I blame the idiotic union thugs. The days of Norma Rea are gone and unions have done nothing but cripple and destroy companies.

1217Chic
1217Chic

Enjoyed their goodies as a kid, what a shame, another American tradition gone.

Greg
Greg

blame it on the unions as always. Why would anyone want a living wage in this country. Kudos to the union for standing up to these corporate pigs. Salary Increases at Hostess while filing for bankrupcy earlier this year. Average bakers salary is around $35,000

Brian Driscoll, CEO, around $750,000 to $2,550,000.

Gary Wandschneider, EVP, $500,000 to $900,000.

John Stewart, EVP, $400,000 to $700,000.

David Loeser, EVP, $375,000 to $656,256.

Kent Magill, EVP, $375,000 to $656,256.

Richard Seban, EVP, $375,000 to $656,256.

John Akeson, SVP, $300,000 to $480,000.

Steven Birgfeld, SVP, $240,000 to $360,000.

Martha Ross, SVP, $240,000 to $360,000.

Rob Kissick, SVP, $182,000 to $273,008.

chatterbox365
chatterbox365

Go fly a kite Greg. Since when are executive positions comparable to a baker? Does the baker have all the responsibility and accountable of the CEO? This type of comparison is stupid because a baker does not have the same skill set required for an executive management position. If the baker wants more money, they should try to get promoted or look for another line of work.

BTW, how much does the Union representatives make while their people are on strike?

Thanks for posting these salaries. It just inspires me to work harder so that some day, I may end up in one of these positions making six figures.

morecowbell21
morecowbell21

$35,000 is better than $0!! so roughly 7 million dollars in corporate salaries for a company with $2.5 billion in sales per year. sounds like money well earned. the problem with the company was legacy costs/benefits due to all of the unions. Every meaningful stage of production and distribution of Hostess products was controlled by a union, with crazy rules which made distributing their product much more costly and inefficient. They had to deal with dozens of unions to get their products out to market. Union inefficiency, pay and benefits made them unprofitable, especially in the current economic climate. This is how capitalism works. Unions, like Obama voters, are economically illiterate and think they have won. Sadly, there are no winners. My guess is most of the honest, hard working union workers would have agreed to the concessions if given the cold hard truth by their corrupt union leaders. I feel bad for those workers.

releggneh
releggneh

Now they get 100% of no wages or benefits. I guess no one explained, a job with cuts are better than no job.

jrt1031
jrt1031

When you spit in the face of Capitolism... sometimes it spits you out of a job

General Lee
General Lee

The only thing good about this is that the ignorant union workers cut their own throat. I hope they can't find a job at McDonald's. This is precisely what they did to Detroit. They simply don't learn; you can't squeeze blood out of a turnip.

I have absolutely zero sympathy for union workers who milk a company until it's insolvent then move on to the next one. Unions are nothing more than legalized extortion; plain and simple.

Lime Lite
Lime Lite

Hey James, no problem. Now no one has jobs. You keep on with that hate though - it's sure to get you far in life.

James Gilliam
James Gilliam

People like you are blinded by the myths and bs people like fox news put out, I bet you didnt know that when hostess brand filed the first time and the unions took a 8% cut in pay they increased the salary of there ceo's from 750,000$ to 2.5 million, yet you want to blame people that are barely above the poverty threshold for the mis-management of a company.

General Lee
General Lee

Hey sport, it's free enterprise; those who take the risks reap the benefits. You union types are parasites who want to dictate rather than earn. Go to the bank, withdrawal your life savings and invest it in a start-up business then, just when you think you have a winner and you're living the life, let me unionize your business and slowly choke the life out of it. Then, come back here and we'll talk. Your wages aren't based on how well the CEO is doing. If that were the case, every Microsoft employee would be entitled to a salary of $500k a year. Get an education and a real job and you wouldn't need the unions to extort wages and benefits for you; you could actually earn them.

James Gilliam
James Gilliam

And what you said right there is why the US has become the arm pit of the world, since the 70's wage for workers decreased and barely came back up over what it was at, while CEO/owner pay went up over 120%, yes being the owner of the company should entitle you to making more then your workers no doubt, but here is the kicker, during this same time, increase in the cost of living has exceeded the pay of workers, so ceo/owner is fine he makes big bucks, worker is no longer fine, he has to ask for the government to help him out, government says we will help you out, now we have to find a way to pay for this, so government starts putting in taxes and restrictions on business's, people etc etc, well the business says ok ok, we will just pass that cost to the buyer (which is the worker), worker ends up with extra tax and cost passed down from business, so now worker is even further in the hole, business gripes because now he has to pay insurance etc, well how do you expect worker to pay for his own insurance etc when your sticking it to them everytime. Your concept of get a education etc etc is FAIL, if you dont have workers guess what you dont have a business, there will always be workers, and not everyone in the US can own a business otherwise the country would go no where. Union tries to make the playing field even, instead of allowing the capitalists like you choke off the workers that you think are slaves.

And as for me, dont insult my intelligence, i dont own a business i have no intention of owning a business as I dont need to, I left a job that paid 27$ an hour because it wasnt worth it, and i make more then what i use to. The difference between me and you, I care more about this country where as you obviously care about nothing more then how much you can accumulate. It will however be funny to watch if the dollar collapses as all these CEO/Owner have money that is worthless and they run to the workers to help them out because they dont even know how to grow there own food. I dont however think i will see that in my time.

obama_spoke_now_im_broke
obama_spoke_now_im_broke

an 8 percent cut in pay, so boo effin hoo, they were making what, 45 dollars down to 35 dollars? don't know the math of that but you get my drift, right? unions are nothing but trouble..look at all the bs the unions are causing for sparrows point in maryland old bethlem steel plant. Unions are as one other person said already on here, legalized extortion that's all it is.

Another reason why unions suck? they turned away men offering to help for hurricane sandy because they weren't union? I mean really?

James Gilliam
James Gilliam

you should try checking all your facts, these people wernt making anywhere near 35-45$ an hour,, more like 16$ and hour if you were lucky,, route drivers were making around 40k per year, 8% cut in pay, plus drop in pensions, let alone the company stopped paying pensions it was contractually obligated to. And just to smear it in the workers face, they upped the CEO's pay.

So lets see based on how you think, you believe that business owners and/or people running it, should be able to just cut employee's pay so that they can put it in there pocket instead as if they wernt over paid already? While in the mean time prices to survive go up? How do you expect people to pay there own insurance, cover there own pensions, get most of the entitlements cut from the government when you dont pay people enough to cover those costs?

My question to you, is this, what business do you own or run?

white531
white531

Good comment, but I am a little confused. Why would you, "like" the comment made by Lime Lite, and then respond with a comment in the opposite direction?

K-Bob
K-Bob

I know it's cool to bash unions now, but I urge folks to be specific in the discussion. I know some really great, pro-second amendment folks who are morally conservative, but have lived their entire lives, through several generations, under the umbrella of union organizations. They think of themselves as a brotherhood, similar to those in the military (don't take that as an insult, you military folks!). So they know the country is going to hell, but the union is strong, so they stick with the union as their hope for survival.

In other words, the members feel trapped, but also feel a form of solidarity we should not lightly dismiss.

They are not really the problem.

The problem is the pipeline between 1) Coerced union membership (in non-right-to-work states), leading to 2) Union dues collected by deduction from paychecks, being funneled 3) to one party, exclusively, and in perpetuity.

It is a form of organized corruption that should have been forseen by the founders and expressly forbidden. It is up to each state to criminalize and end this practice, separately. It will take twenty years, unless some big states step up and make it a severe penalty NOW.

It's not the brothers in trade unions (although in the teachers union, it IS the union members that are the problem). It's the corrupt system that allows a guy like Trumpka—the former head of the UMW, which is being KILLED by the Obama administration—to become a de-facto part of the government, unelected by and not representing the citizens. He is far worse than any corporatist entity in Obama's orbit.

Finally, the most fully corrupt practice of unions is when it's in the public sector. Because you add the fact that they take taxpayer money and give it to one party, exclusively. This should be a practice that is punished by the most severe penalties possible, including life without parole.

This is where we must focus our energies. Not on yelling at workers for being in unions.

As I always tell folks, you do NOT want to be hanging iron 150 feet up in the air without a union hall at your back. And you should never go a quarter mile underground in man-made shafts without being in a union.

80s_kid_wants_rainbow_back
80s_kid_wants_rainbow_back

Good thoughts. I think sometimes unions are good, other times they are bad. My MIL who taught braille for thirty years suffered from job related carpal tunnel. Her union went to bat for her and rightfully so when her employer refused to pay her workers comp bills. On the other hand my BIL didn't like his job at UPS, he repreatedly skipped work without any notification to his employer. This went on for five months and UPS could not fire him because his union kept intervening for him. Never been a member myself and hope to keep it that way.

white531
white531

K-Bob, you are the rock of sensibility and levity in these nightly conversations. You are right, in that the motivations of the members are different than the motivations of the Union Leaders. I agree with you. It does feel good to belong to a brotherhood. We have something of a brotherhood here on Scoop, and it does feel good.

"As I always tell folks, you do NOT want to be hanging iron 150 feet up in the air without a union hall at your back. And you should never go a quarter mile underground in man-made shafts without being in a union."

You had me with hanging iron 150 feet up. Jobs like that require training and discipline. No argument from me on that one.

But it's unionizing things that don't require unionizing, that is the problem.

Ron's Produce here in Tucson, is a perfect example. All of their drivers and warehouse employees were happy to have a job. Been like that for a long time now.

The owner of Ron's Produce was not a tyrant. The few people I know who worked for him, had no complaints.

Regardless, they are unemployed, as I write this.

What business does a Union have, to come into an environment like that, and cause trouble and place these people's lives in jeopardy? For what, may I ask? To make the Union stronger? To make the Union fat cats fatter?

Those people have families. Wives and children. This is going to be a lean Christmas for those families.

And then there are the Teacher's Unions and the Unions that support our Government employees. Not even going to go there. Waste of my time, frankly.

K-Bob
K-Bob

Thanks, w!

white531
white531

No, K-Bob. The thanks are to you, for all you do here, to make this work.

TheLittleRedHen
TheLittleRedHen

Trumpka is such an idiot. He is spouting off claims of crony capitialism, etc. I think he is using Atlas Shrugged as his talking points. It's Crazy.

“These workers, who consistently make great products Americans love and have offered multiple concessions, want their company to succeed,” Trumka said in the statement. “

Okay Labor boss, here is something I learned as a child. The Story of "The Little Red Hen" - Who bought the ingredients to make those "great Products"? Who paid for the tools and utensils to make the product? Who's Money bought the land and built the factory where the workers labored? Whose money paid the utilities and bills and insurance on the factories? I could go on, but you just can't see past the invisible room filled with cash you think every successful businessman has.

RantMan
RantMan

Oh Noes! What will we fat people do?! ;)

iaintlyin
iaintlyin

Ya gotta love this story after reading about what that moron Trumpka had to say yesterday. I've said this time and time again, Anyone elected to a paid position (unions and politicians et el) should then be required to supply their tax returns to the constituents who elected them. If these idiot bakers ever saw what the Executive Officers of their union made, including writeoffs, expense accounts and other perks, there would never have been a strike in the first place. They would have kept the money they were paying in union dues and their jobs. The only ones unemployed would have been the seven member board that is ripping their members off.

Unions, jeez, wound up going from totally necessary to the biggest organized crime racket in the country. Whatever way you look at it, whoever hijacked the other I can't quite figure it out but, between the two of them, the democratic party and the unions have brought this Republic to its knees. They've bamboozled the of the general population into believing in socialism. But the best is, none of 'em realize it (except the teachers, those rat bas....s know what they're doing). What a scam.

Lives4Freedom
Lives4Freedom

The Twinkie, once humorously thought of as the indestructible pastry, right at home on the emergency bomb shelter shelves, is facing extinction today at the hands of a parasite, known as the Union.

My condolences to those who simply wanted to go to work and do their job, and now, no longer have one.

Dukehoopsfan
Dukehoopsfan

Well, there go 18,000+ union jobs ... only a couple of million to go. labor unions had their place around 1870 - 1930. Today they are parasites and should be de-certified and banned.

Tim Jaggers
Tim Jaggers

Since the union workers said there was no need to accept the deal since they could make more money on unemployment, this should be classified as a voluntary job separation and therefore union workers should not be able to receive unemployment benefits. Usually, you can't collect unemployment when you chose to end your job.

DebbyX
DebbyX

I believe now there's just a waiting period.

Nothing stops the gravy train!

ZedBear
ZedBear

If an "honest" jobs report is ever published again (something I'm quite dubious to believe now that the "professor" has been re-elected), I predict we will see over 10% unemployment by spring.

physicsnut
physicsnut

They are so focussed on "you gotta fight" that they don't pay any attention to what they get if they win, and don't do their homework anyway. And they don't care.

DCGere
DCGere

Forward! Union members are useful idiots for the union brass that will just move on to another union, reaping their high-paying jobs to "protect" the little people.

david r
david r

There is a video out there by Abbott and Costello discussing the unions and bakers. It would of been ideal to put that video with this story and see the irony behind the great comedic skit by the greatest comedic dual on the play on words.

Here is a quote from that video and can be seen on youtube...." Costello-can I get a job there? Abbott-no! You have to belong to the union. Costello-you mean I have to belong to the union in order to loaf! Abbott-that's right! Costello-well how about that...I have to belong to a union of loafers!.

Check out the video and get back to me. You will see the irony behind one of their greatest skits as it relates to what just happened to a great company we once greatly patronized...Hostess. Sad to see it go!

James1754
James1754

Another great success for the American workers! A company on the edge of insolvency forced to lay off 18,500 workers by the small union that would not help the company get back on it's feet. I wonder how all those bakers who will now be looking for work feel about the union leadership that still have their jobs?

Alex
Alex

Oh well. They've been planning bankruptcy for a while. Twinkies are kind of gross anyways. Now Zingers are much better.

Laurel
Laurel

Go and get your twinkies and zingers now because they will be gone!

mikeinidaho
mikeinidaho

Hey all you union workers for Hostess, how ya' like your union thug leaders now?

Heh, heh, heh, you get what you vote for, idgets.

gilamonster8
gilamonster8

Hostess Ding Dongs, Ho Hos, Wonder Bras, and Benghazigate! Are we sure these story's are not linked?

kong1967
kong1967

Eh, they may have a 100% reduction in salaries and wages, but now they get to join Obama's long list of people in the unemployment line and draw a check for two or three years sitting on their twinkies. I'm sure they get some termination benefits coming their way, too.

This is what needs to happen to every company overtaken by unions. It's the only way employees will get away from the spoiled brat entitlement mindset. There needs to be a law preventing the federal government from bailing out businesses in order to save their pocket stuffing unions. Let them go under. "Too big to fail" is a crock of sh**! Any business that big will leave a vacuum that many other non-unionized business and investors will suck up and take over. Dems always convince people that the jobs will be gone forever and we won't have any cars. They are the biggest liars and scare mongers that ever lived.

Daniel Domenico
Daniel Domenico

Good point. Similar to mine when people say Obama 'saved' the auto industry. Nope, he just propped up the loser. If a carpentry, plumbing, construction company needed to buy a work truck, they would not have gone without, just because there was no GM. Maybe they would have bought a Ford truck instead. Ford should be screaming at the top of their lungs that the federal government is subsidizing their main competitor. He saved nothing, just prolonged the inevitable. I will miss my Zingers for sure, but some company will take the space on that shelf. I just hope its not chinese import dessert pastries that do it... I feel badly for the majority of the workers, who were NOT union, who have also been sent home. Terrible time to be out of work. Of course the union will be covering their expenses for awhile, right? Solidarity? ALL about the workers right?

kong1967
kong1967

Lol, I believe that's wishful thinking. Yeah, I feel bad for the non-union workers that got fired right along with the rest of them. As far as the union workers go, though, good riddance. If you don't go to work you deserve to be fired.