Let Them Eat Cake

"Qu'ils mangent de la brioche"
 Hostess Brands has filed a petition in bankruptcy to liquidate its assets after the union representing production facility workers rejected a reduced pay contract offer from the company. 18,500 jobs will be lost.  Interestingly, the Teamsters, representing Hostess transport and delivery drivers had advised the striking bakery workers that this was the best deal they could get.

The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union represents around 5,000 Hostess employees, but the Bakery Union has decided to end the jobs for its members as well as for 13,500 other Hostess workers in an economy headed into another recession. In August the Teamsters Union representing some 7,500 Hostess workers voted by secret ballot to accept terms similar to the company's proposal to the bakery workers. Four other smaller unions have ratified the company's offer that was filtered through the U.S Bankruptcy Court, Southern District of New York. But the Bakery Union never had any intent to make the concessions necessary to keep Hostess afloat. All we have to read is this "elegant" public statement was made by the BCTGM union president after the Teamsters ratified their new contract in August.
“I would never sign this piece of crap,” says Frank Hurt, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers union (BCTGM), the second-largest labor organization at Hostess after the Teamsters.
Jennifer Rubin, in her Washington Post column, has hit the nail on the head:
It is instructive to see the fat-cat salaries that the union bosses receive. The March 2012 LM-2, the annual filing required by the Department of Labor for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union reveals that union bosses collectively received more than $3 million in compensation. The secretary treasurer takes down a whopping $196, 627 while the president rakes in $210,672. Hey, the Big Labor execs have their dough, so why should they sweat, a month before Christmas, about 18,500 employees going jobless? Perhaps they should adopt a new slogan for their union: "Let ‘em eat cake".
There is irony in the upcoming asset liquidation.  Hostess Brands predecessor, Interstate Bakeries was bailed out of bankruptcy by Ripplewood Holdings which is run by Tim Collins, a Democratic financier connected to "Little" Dick Gephardt's labor consulting firm. As can be seen below the embittered union folks are now sticking it to their Democrat ally in the Ripplewood private equity firm. Everybody loses except possibly the hedge funds.

  • Gadfly:
    There might be hope on the horizon.
    I posted about it today (20 Nov).

    Damn shame how politics plays too LARGE a role in business these days.

    Still, if ONLY they would reopen the DRAKES division and ship THEM to the MIDWEST...!
    (yeah, I can dream)


    Stay safe.

  • Gadlfy:
    Now, I have to retract my statement...for the time being.

    Another company WILL buy up Hostess and re-establish the brands...it's just going to take a bit longer.
    (thanks, Unions...helluva job you've doen here)