Enjoy Twinkies while you still can. Hostess Brands just went bankrupt. This morning the company announced that it will suspend operations and lay off more than 18,000 employees. The Bakery International Union put them out of business.
Hostess has struggled financially for years. The company tried to stay competitive by cutting costs, but these cuts enraged its unions. The Teamsters ultimately accepted concessions; the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union would not.
Despite warnings from management—and the Teamsters—the Bakery union went on strike and refused to return to work. Hostess lacked the funds to carry on, and the company will now liquidate.
This has become the story of the labor movement. Companies like Hostess need to be nimble, but unions make it difficult to respond to a changing marketplace. This makes unionized firms less competitive. So unionized firms invest less, create fewer jobs, and earn less than comparable non-union firms.
While unions try to avoid bankrupting their firms, the companies grow more slowly—and shrink more rapidly—than their non-union competitors. Over time, they eventually go under. What happened to Hostess has happened across the entire economy. (continues below chart)
This is one reason why union membership keeps falling: Unions cannot recruit enough new members to replace the ones they keep losing. In 2012, union membership hit another record low, falling 0.5 points to 11.2 percent. In the private sector, just 6.6 percent of workers belong to a union.
Unions now want to boost their membership by making it difficult for workers to tell them “no.” President Obama’s National Labor Relations Board (NLRB) is obliging. The NLRB just changed its rules to enable unions to cherry-pick who votes in union elections. At one New York department store, unions recently formed a unit representing only women’s shoe associates on the second and fifth floors. None of the 300 other employees in the store got to vote.
However, a strike or union-induced bankruptcy hurts all the workers at a company. Just ask everyone at Hostess who lost their jobs in the Bakers union strike. The NLRB’s new rules effectively disenfranchise employees who do not want to risk unionizing. Now their choice does not count.
If employees feel that they need a union for protection, they have a right to organize. Management gets the union it deserves. But if a company treats its workers well, the NLRB should not foist unions on them anyway. Losing Twinkies is bad enough.
Guess every union is a vested interest of government. It has to stop. People have to wizen up and back their employer to keep their jobs to provide for their families! Livable wage jobs are the ones Obama wants to collapse into social government control! Unions are suppose to compromise within the afford ability of the business but to call employees to strike to lose their jobs altogether without compromise within reason leaves unions a serious problem in America. And then to have obama come in to save the day to fulfill the unions demands above the businesses ability while helping himself to more power handing out more tax payers dollars decreasing the livelihoods he obligates the cost (which is every tax payer who takes no discretionary exemptions,) is unscrupulous, devious, unconstitutional and every bit counterintuitive to America's well being.
I love hostess but I hope they turn down obama's offer based on basic core principle. It's not his money and all within union control that caused it.
Obama's undermining conduct has to stop!! Get rid of unions and government control and what do you have? Economic prosperity, freedom and accountability! Wherever government (unions) is corruption is greater. Who do you know better? The business contract of your employer whom you've applied and hired to work for? or those unseen handling, instructing, directing your employers business affairs costing you and the employer more? Government and unions.
The business or company and their employees benefits themselves and economy when the business runs independently by self governing. Selfishness and/or obsession to take control turns America no where but ugly as four years of union gripes and government thievery shows the country bankrupt. Unions use employees to benefit unions. How sad employees would let unions have this control over their livelihoods, but sadder unions pretend to be employees best friend causing all this trouble trickling throughout the country when the one that hires was held to trust with access to the justice system if need be.
Unions do a terrific job collapsing this country. One of Obama's right hand entities.
This is not entirely true. The "brands" will live on. Part of the liquidation will be selling recipes and trademarks. The company and the jobs are gone forever.
Can anyone verify, for me, the involvement of Ripplewood holdings, that allegedly was charging high interest to Hostess on a 130 million dollar investment? This question must be answered before the union takes the brunt of the blame. We know that the blame game works both ways, and it's time we looked at all aspects of a situation before pointing the finger in one direction only.
It's the overall principle…
Obama and Michelle are the ones that have push the unions and so they are to blame for us losing our Twinkies
This was not the unions fault. Do a little research and you will find that the majority of the blame lies in bad management. I am a Republican and have been a member of the BCTGM union for20 years. you can only expect the workers to give so much
Thank you! Why is no one reporting how the CEO's gave themselves 60-300% pay increases as they looted the pension fund and lowered pay rates if employees.
The sad part is that the union workers are blind to what's happening. They cry out that they are HAPPY!! Why? Because the union has told them that "someone" will buy these bakeries and they'll all *probably* get their jobs back. So collect unemployment and sit back and WAIT. I think unions like this should be called to account … Racketeering or something!!!!
People who don't want the unions don't get it. The unions keep the owners and management from reducing pay and slow reducing of benefits. As unions get smaller so do WORKING class paychecks on average. The rich want people to believe unions are evil because they want to take Money/Food from WORKING CLASS people and their tables. When is enough
No, unions are not to blame. Tripling the CEO's pay and giving 80% raises to other top management is to blame. The workers have had enough.
Can some of the non-union employees at Hostess who lost their jobs file suit against the NLRB?
This is democracy! People form unions! Blame the people that voted to form the union. Kill the formation of union and you say communism. Which one are you? A hypocrite?
I totally agree. However, I just read in the newspaper (AP/IndyStar report) that Hostess gave up to 80% raises to a dozen of its' executives this year after pleading poverty to the workers and the court. This puts a little different light on it for me. They were within their rights to give the raises but then they have to accept the consequences that it makes them look less than honest.
When are the boards of directors for companies going to stop being puppets for upper management and start doing their jobs. Giving raises when the company is failing is incomprehensible! They should be fired not given raises.
They went on strike because upper management gave themselves huge pay increases and then wanted to cut workers wages.
Before you blame unions so generically, you should get the facts.
I'm pro union but when demands exceed a companies ability to meet,the workers need to compromise. Lifetime benefits like pensions and health insurance have place a strain on many companies, not to mention what consumers must pay for those products. On the other hand,the bonus system and other perks for corporate management should be taken into consideration.
…and it's too bad Hostess didn't have the same team players they had when she sustained success. Probably non-union? With support of the President, unions are taking down America one honorable business at a time.
Just another fact of life with Obama as president. It has only been 11 days…are we having fun yet? Coming from Illinois which has the worst pension crisis in the entire United States thanks to the unions, I feel for all of those workers who were not part of a union but still lost their jobs. Unions were once a good idea, but no longer. Things need to change and fast, and we need politicians who are willing to make the tough choices. Without that we are all going to suffer.
Speaks for itself!
I won't miss the Twinkies, but will sure miss the Donettes!
I cannot believe that Hostess is going away. I've loved and enjoyed Hostess Twinkies and fruit pies all my life. It's sad to see this, and what is happening to this country.
Wow what a union hater!! Unions represent rights and fair treatment to our labor force. Without them management can change rules at any time of fire employees without reason. I guess Chinese workers are better off without unions too. I guess you don't have a clue about what unions are here for. Please write an article worth reading and stop wasting our time!
David, As a former union member and now a Merit Shop Owner, you must have forgotten the hunders if not thousands of labor laws we have in this countyr that make it impossible to just fire some one or "change the rules" with out notice or reason. The reason that private sector unions are failing are because the members are wising up and realizing that the union that takes at least a quarter of their pay does little to nothing to represent them, but is just large political machine with no concern for the little guy. At one time, back in the early nineteen hundereds the unions were a good idea but as I said above we now have labor laws that do the job of protectin employees at no cost to the employee (i.e. union dues ).
businesses dont fire employable assets who promote business success, silly ding dong!!
Sad really
This is a sad day for Gordon, no more Twinkies. The union bosses are number one on my scorn list.
You are a complete moron!
The unions are allowed to commit legalized SLAVERY and EXTORTION!! Conservatives speak the TRUTH!!
you do not need a union they are corrupt and greedy and dont give a rats ass about you or me they employ them selfs with high wages useless jobs we do all the work union wages are outrageous we need to balance the economy make living affordable i work for a non union shop and im happy screw paying dues to make politics fat and rich make living affordable shop walmart
" The company tried to stay competitive by cutting costs, but these cuts enraged its unions."
You mean cuts such as increasing executive pay by over 80 percent, increasing the CEO's pay from $750,000 to over $2.5 million, and raiding the employees pay and benefits?
No it couldn't be that! It is all the fault of the unions!
When are you people going to start valuing the truth instead of ignoring anything that contradicts your narrative and ideology.
You are attempting to bring us into another gilded age. Some would say you have been successful since inequality is unprecedented. CEO and executive pay skyrockets while your average Americans pay has remained stagnant for the past thirty years. We are seeing Ayn Rand's dream fulfilled and you are championing the immorality of it all.
Isn't it just amazing that in todays envioronment some compromise couldn't be made to continue the business. But, I guess, in todays climate of the the 99% versus the so called 1%, Obama's strategy of making more dependant on the government is working just fine. What is just crazy is how many people are being fooled into thinking that the government or the union can actually provide for them for their entire lives. But, I guess, if you just live to exist and have a mediocre life at best you take what you get. It's just hard to believe we have gotten so lazy, stupid and dependant.
I see this as another them vs us argument. What we need is a "we" moement. Employers who respect and support teir employees and Unions who do not tke advantage of the employers. Only then will the employes be employed and protected. SHame on the Unions whose actions cause a company to go bankrupt. Shame on the employers who shaft employees by giving them 32 hr work weeks so they are not full tiome and do not get benefits. And most of all, shame on the extremists thta are more worried about keeping their power base than in supporting the company and it's employees.
What a shame to lose an icon in the bakery isle at the store. I love the cup cakes and will miss them in the future. Some other bakeries have tried to imitate the Hostess cup cakes, but they are not the same a the original. I certainly feel compassion for the 18,000 who lost their jobs. Maybe it isn't too late for someone to come to the rescue.
Now Obama killed hostess with the help of his union thug supporters.
It's not rocket science ladies and gentlemen. Unions kill jobs. Unions have never ever created jobs but they kill them regularly. Most of your union members or officials have only completed high school if that and yet they make decisions, almost always based on emotion that affect many others who just want to work. Is this part of the liberal Democrat goal to dumb down American society so we can be equal to the thrid world countries?
Unions just don't understand that they are killing the goose that lays the golden egg.
What is the matter with the board of directors and upper management. It is insane to give upper management raises when the company is not financially sound or taking care of its workers. Where is their responsibility for the success of the company. Upper management is killing the goose that laid their golden egg…but then they do not care. Shame on the board and shame on management. The company needs to go away…unhealthy product, unhealthy management policies.
Hey, no sweat people, we'll just start importing Hostess cupcakes from Mexico. Thank you unions. And the blue collar workers wonder why their jobs go overseas….Dah…
Unions are a sign of a management that is less than desirable. Today more and more management styles are realizing that the company will be the most successful if the workers are treated properly. If workers are treated properly they have little need to unionize. Unfortunately there are some managements that are not interested in their company's future and believes they can personally make more money by sucking the company down and then letting it go bankrupt.
The funny thing about this whole national debate is that all that gets coverd is wages. Nobody mentions work rules. Look into the nutty work rules and you can see how a Union can drag down a good company. Once the CEO's and the upper ups see the writing on the wall, and once Private Equity has been called in, it's because they realize that the long term isn't going to work out. They do these things, not just to drain money out of the company, but to let the company go so they can begin again without bloated Union contracts and their bizzare rules.
Looking at the product line, perhaps fewer people will die from eating manufactured food and the world is now a better place.