Hostess closes its doors for good.

[You Mad]

This is not the work of the union. Those only willing to read a headline and draw their own conclusion would be wise to find out why the union refused to sign a new deal. If taking 30% pay cuts all to keep the business running while increasing upper management's pay seems perfectly reasonable than I'd be happy to employee you.

[OneTruth]

Poor Management

Finally, as noted by Think Progress, Hostess mysteriously tripled the pay of their CEO just months before asking union members to take a pay cut to “save the company.” One could understand how union members found it hard to believe the company was strapped for cash after raising the CEO’s salary from approximately $750,000 to $2,555,000. Nine other executives at the company also received massive pay raises earlier this year, which now appear to be part of a “golden parachute” package. Other CEO's, like the head of American Airlines, freezed or reduced their pay over the past four years when they asked unions to make similar sacrifices.

It is also worth remembering that Hostess executive agreed to pay the labor unions their high wages and generous pensions in an earlier contract. Much like NHL owners, the Hostess executives were trying to take back an earlier contractual promise made to the union.

[VinBucFan]

Poor Management

Finally, as noted by Think Progress, Hostess mysteriously tripled the pay of their CEO just months before asking union members to take a pay cut to “save the company.” One could understand how union members found it hard to believe the company was strapped for cash after raising the CEO’s salary from approximately $750,000 to $2,555,000. Nine other executives at the company also received massive pay raises earlier this year, which now appear to be part of a “golden parachute” package. Other CEO's, like the head of American Airlines, freezed or reduced their pay over the past four years when they asked unions to make similar sacrifices.

It is also worth remembering that Hostess executive agreed to pay the labor unions their high wages and generous pensions in an earlier contract. Much like NHL owners, the Hostess executives were trying to take back an earlier contractual promise made to the union.

There's another thread on here that includes the actual story. Suffice it to say you are just repeating stupidity.  Spend a little time on Google. You'll see.

[mrjack535]

Another good article on why poor management killed hostess.

http://articles.latimes.com/2012/nov/25/business/la-fi-hiltzik-20121125

[JavaRay]

No American companies can afford to pay employees those type of pensions and benefits anymore.   

[OneTruth]

certainly not ~ then our CEO's might not be the highest paid in the world by a large margin. Why have CEO salaries increased 20% in the last 20 years while hourly employee wages have decreased or stayed the same???

[OneTruth]

[Chief Joseph]

Hourly wages have decreased or stayed the same for twenty years? Well I'll be go to hell.

[OneTruth]

im pretty sure youre right about that but newaze... 20 years ago I cooked for a living in Tampa. The highest a cook could achieve was @ $14hr. My close friend is still a cook. Guess what the ceiling is.....still. The same as was 20 years ago. AND when you put all your time in to get to that wage...management does you a favor by cutting your hours to save labor cost which ultimately goes in as a bonus to the managers and corporate pigs.

[dbucfan]

im pretty sure youre right about that but newaze... 20 years ago I cooked for a living in Tampa. The highest a cook could achieve was @ $14hr. My close friend is still a cook. Guess what the ceiling is.....still. The same as was 20 years ago. AND when you put all your time in to get to that wage...management does you a favor by cutting your hours to save labor cost which ultimately goes in as a bonus to the managers and corporate pigs.

Well, if you and CBW are of the same mind it you guys must be right!!!

[VinBucFan]

Shocking, some of Hostess' biggest brands being purchased by a largely southern, largely non-union bakery and the new bakery is NOT picking up the labor contracts:

"Flowers is unlikely to rehire Hostess employees as union workers, analysts said. It has been clear with investors that it isn't interested in assuming labor contracts, said BMO Capital Markets analyst Amit Sharma and other analysts. More than 90% of Flowers's workforce is nonunion, analysts estimate."


Yeah, unions played no role in the demise of Hostess . . . . . .(sarcasm)

http://money.cnn.com/2013/01/12/news/companies/flowers-foods-wonder-hostess/index.html?source=cnn_bin

[dalbuc]

"One could understand how union members found it hard to believe the company was strapped for cash after raising the CEO’s salary from approximately $750,000 to $2,555,000. " You are talking about a $2.5 BILLION company. Do you realize what chump change that sort of raise is compared with the massive costs of thousands of workers plus thousands of more retired workers?

[Durango 95]

That's one side of the argument....here's another.

This is the typical mode of operation for many corporations . Once their employees feel their labor output is greater than their income, they demand more, which at that point, the corporation picks up and moves again. For the company It's just a simple rinse and repeat.

It moves into a starved market w/ the promise of enrichment for all, then when the employees reach a point that they feel they've been taken advantage of,  the company moves again. As long as the corporation has a fiduciary responsibility to the stockholder first this the inevitable result. Then when the corporation exhausts all the domestic markets they begin to "outsource" or move overseas. While continuing to sell their product domestically.

Are you beginning to see a discomforting pattern yet?

[Chief Joseph]

So, profitable companies remain here, and those that operate on the margin are eventually outsourced?

[Durango 95]

It's not uncommon for a corporation to move facilities when it feels it can take advantage of a market to reduce labor costs. It can involve a domestic or even an across border relocation.

Because of the nature of the corporation it's in constant search to increase profitability. It's obligation to its stockholders demands that. If that means it will have to do that multiple times then that's what it will do.