Hostess: Union Rules were Harder to Digest than Twinkies

Hostess: Union Rules were Harder to Digest than Twinkies

reprint from : 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.