Union Kills JobsSubmitted by TommyPaine on Tue, 11/13/2012 - 15:37
Hostess is in bankruptcy. They are trying to reorganize to shed debt and expenses so that they can continue operations with a chance of being profitable.
So, they vendors and creditors are going to take a $2 billion loss. They will go along with it because the alternative is to lose everything, along with future business/loans.
But the baker's union, well they are so much smarter. Hostess management says they have to cut labor expenses. Rather than layoffs, they want an 8% pay cut, a temporary freeze on adding to pension funds, and some changes in work rules. To help compensate for this, they are offering the union employees a 25% equity stake in the company, a $100 million note that will be paid if and when the company returns to profitability, and 2 seats on the Board of Diretors (so employees can help make decisions and be on the inside of information flow).
But ... the union members voted 92% against.
The company said they will have to shut down any striking bakeries due to inability to pay overhead.
The union members of 3 plants went on strike.
And the company has shut them down.
So, the union has killed 627 jobs.
The Hostess bankruptcy plan:
The strike and shutdown response: