The Hostess With The Leastest

OH!  MY!  GODS!

Yeah, so suddenly everyone cares, right?  Very few of y’all cared about Hostess, Wonder Bread, Dolly Madison, Blue Ribbon, Butternut Breads, or any of the 27 brands that were part of the Hostess Brands, Inc.  The company was in bankruptcy twice in the last 8 years.  The first time in 2004 and the second time right now, but starting January 10, 2012.  It came out of the first bankruptcy in 2009.  That means, they managed to stay out of bankruptcy for less than three years before going right back in.  Is that a successful company?  No.  And, who does the right blame for this?  The unions, of course.

It’s never management’s fault.  It’s simply astounding how this works from their perspective.  There is always someone to blame, right?  It wasn’t management’s fault that they couldn’t stay current on their $700 million loan.  It wasn’t the fact that their board members gave themselves up to 80% raises.  It wasn’t that the previous management had failed to properly plan to live up to their commitments, and the contracts they had signed, thus leaving themselves with roughly $2 billion in unfunded pension liabilities.  It wasn’t the changing conditions of the Multi-Employer Pension Plans, and overall failure of supply side economics.  It wasn’t competition.  It wasn’t a changing market.  It wasn’t that their sales were down.  (11% from 2008 to 2011, and 28% since 2004)

Nope, it’s all because 92% of a 6600 member union said, “No” to the last offer which included more pay cuts (8% immediately), fewer benefits (27-32% wage and benefit reduction overall), and the hope of maybe something more in the future.

“They’ve already took away our pension and not brought that back; and they’re not negotiating with us on anything we’d like to see negotiated,” Rocha said.

Oh, and that 6600 member union, the Bakery, Confectionery, Tobacco Workers and Grain Millers’ International Union?  Yeah, on its most recent bankruptcy filing, Hostess listed that union’s pension fund, the Bakery & Confectionery Union & Industry International Pension Fund, as its largest unsecured creditor at $944.2 million.

Please read that again.  Out of more than a billion dollars in liabilities, almost $1 billion of that is owed to the union that the right would have you believe is being unreasonable by refusing to accept further cuts and promises of future compensation.  In other words, the group to which Hostess already owes nearly $1,000,000,000 said, “No, we will not extend you any more credit.”

Let me pause for a moment.  I would like you to consider this situation in full.  Consider all of these facts.  Take a moment or three to read through the links provided and any more that you may stumble upon or go looking for.  After you have done that, ask yourself these questions.

Why? Why would the union members have any faith in the management’s ability to lead the company out of a second bankruptcy and into a better position?  Why should they be willing to trust that giving up the now for a promise of the future would be a smart move, when the company isn’t even making good on the previous commitments they’ve made?

Do you continue to trust someone who has betrayed you over and over again?  Is that not why you enter into a contract?  Would you continue to trust someone who has lied and stolen from you?  Better question, would you enter into another contract with someone who has repeatedly broken contracts with you and is massively in debt to you already?

Strictly from a business perspective, what is going to happen here?  Hostess has asked the judge presiding over their bankruptcy for permission to liquidate their assets.  As a result, assuming the judge grants the request which is highly likely, the brand names will be sold off, and most of them will reappear on store shelves.  Likely they will be purchased, lock, stock and barrel, by Grupo Bimbo (the world’s largest bakery group, owner of Entenmann’s) or Yucaipa Companies (an investment firm out of LA), both of which have previously tried to buy Hostess in 2007.  They may wind up splitting the spoils, much like Bain Capital or any other vulture capitalists.

So, then what?  Well, then, all those employees who have been out of work will likely go back to work.  At least the vast majority of them.  And, thanks to the union, they will have had some help getting through the lean times.  Thanks to a strong union, because that is one thing that a union is able to do.
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Labor is the United States

A – “Labor is the United States. The men and women, who with their minds, their hearts and hands, create the wealth that is shared in this country — they are America.”

B – “Labor is the superior of capital, and deserves much the higher consideration.”

C – “Industrial harmony, expressing these mutual interests, can best be achieved in a climate of free collective bargaining, with minimal government intervention except by mediation and conciliation”

D – “We believe that, to the widest possible extent consistent with the public interest, management and labor should determine wage rates and conditions of employment through free collective bargaining.”

E – “We demand an end to the Project Labor Agreements; and we call for repeal of the Davis-Bacon Act, which costs the taxpayers billions of dollars annually in artificially high wages on government projects. We support the right of States to enact Right-to-Work laws and encourage them to do so to promote greater economic liberty. Ultimately, we support the enactment of a National Right-to-Work law to promote worker freedom and to promote greater economic liberty.”

F – “We reaffirm our commitment to the fundamental principle of fairness in labor relations, including the legal right of unions to organize workers and to represent them through collective bargaining consistent with state laws and free from unnecessary government involvement.”

That’s right, kiddies.  One of these things is not like the others.  Which is it?  Actually it’s a trick question.  There are two answers.  We’ll come back to that in a minute.

I find it very interesting how poorly informed people are.  I was having a discussion with a Republican friend of mine yesterday, and he brought up politics.  During the course of the conversation, I asked him why he was a Republican.  His response was, “Basic beliefs”.  I asked him what that meant, and pointed out that 50 years ago, the Republican party supported Unions.  He claimed that I was misinformed.  Very interesting, no?

Let’s see … hmmm … Who might be the most obvious example one could come up with?  Oh, that’s right!!!  Ronald Wilson Reagan

• Elected to the Board of Directors of the Screen Actors Guild in 1941
• Elected 3^rd Vice-President of the Screen Actors Guild in 1946
• Elected President of the Screen Actors Guild in 1947 – 1952 and again in 1959

Now, I am not endorsing Reagan.  We also know that he used this position to feed the FBI with people he believed to be Communists or sympathizers.  (For which, the FBI in return spied on his children.  What a guy!!)

Governor Scott Walker and the Wisconsin Republicans removed the right of the public union employees to collectively bargain.  Reagan never even attempted that.  His objection, even when he broke the PATCO strike, was against their right to strike.  Still a foul, but not even in the same league.  It took away their strongest tool, but it did not remove their rights!  These Republicans are a horse of a whole other color.  They are pushing to actually take rights away.

And, they are succeeding!!

There are ways in which even I will acknowledge that perhaps some unions have gained too much.  SOME.  However, if the conservatives are to be taken at their word, then there should be no one to blame for that.  (Yes, I realize the lunacy in that!)  Why is that?  Well, quite simply, it means that the system is working the way that they claim they want it to.  Two parties entered into a negotiation.  Each party had something to offer to the other.  At the end of the negotiation, a deal was struck.

So, in reality what we have here are spoiled grapes, no?  The children made the rules, and then when they lost the game, they want to whine about it, and retroactively change the rules.

As I have said before, and I will likely say again, to be anti-union is to, by definition, be against the people.

So, back to our game.

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From the ground up

It is not needed nor fitting here that a general argument should be made in favor of popular institutions, but there is one point, with its connections, not so hackneyed as most others, to which I ask a brief attention. It is the effort to place capital on an equal footing with, if not above, labor in the structure of government. It is assumed that labor is available only in connection with capital; that nobody labors unless somebody else, owning capital, somehow by the use of it induces him to labor. This assumed, it is next considered whether it is best that capital shall hire laborers, and thus induce them to work by their own consent, or buy them and drive them to it without their consent. Having proceeded so far, it is naturally concluded that all laborers are either hired laborers or what we call slaves. And further, it is assumed that whoever is once a hired laborer is fixed in that condition for life.

Now there is no such relation between capital and labor as assumed, nor is there any such thing as a free man being fixed for life in the condition of a hired laborer. Both these assumptions are false, and all inferences from them are groundless.

Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration. Capital has its rights, which are as worthy of protection as any other rights. Nor is it denied that there is, and probably always will be, a relation between labor and capital producing mutual benefits. The error is in assuming that the whole labor of community exists within that relation. A few men own capital, and that few avoid labor themselves, and with their capital hire or buy another few to labor for them. A large majority belong to neither class–neither work for others nor have others working for them.

from Abraham Lincoln’s State of the Union address to Congress December 3, 1861.

There is a concerted attack being conducted on the unions in America, and around the world.  Unions are being blamed by the right and even some on the so-called left for causing or at least contributing to the economic issues in America.  They are being accused of not paying their share of the burden for recovery.  Let us stop and think about these accusations for a couple of moments before we identify them for what they truly are.  No.  Let’s first call them what they are.  These attacks are simply more of the same horse pucky.  They are misdirection.  They are lies.  They are divide and conquer tactics.

To be clear, a trade or Labor Union is “is a continuous association of wage earners for the purpose of maintaining or improving the conditions of their employment” as well defined by the Australian Bureau of Statistics.  In other words, it is an association of people banding together in order to protect and further the cause of the people.  To be against a union is, by definition, to be against yourself and your fellow people.  This is not a difficult logical process.

Some object to the associations, true and alleged, between the unions and organized crime.  Organized crime exists everywhere, because of laws that have been passed not because of Unions.  Organized crime took up residence in some parts of Unions because there was a way to make and move money and goods.  Not because of the Unions themselves.  To blame the Unions, is like blaming milk for cows.

Some object to the benefits that Unions have gained for their members out of jealousy for one’s self.  However, as was pointed out by my ever wise father in a different context, in this capitalist system, the real “culprit”, if there is to be one, for any over-extension of union power is the business management for yielding to those demands.  Is that not how the system works?  Both sides sit at the negotiating table and come to an agreement, then both sides are expected to live up to the terms of that agreement.  Okay.  So, the Unions argued for their side, and then they lived up to their end of the agreement.  If the management failed, and they surely have with unfunded liabilities, and other issues, then who is to blame?  The Unions?  Certainly not!  But, that is what the right wing would have you believe.