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Friday, November 16, 2012

Union Power and the Death of Twinkies (bumped)


A couple stories that are naturally connected. First, as you have likely heard, a small number of union workers for Hostess have decided that they would rather make $0 per hour than take a pay cut. Of course, their decision also means that thousands of others will lose their jobs as well. From Fox News:
The company, whose roster of brands date as far back as 1888, filed a motion to liquidate Friday with U.S. Bankruptcy Court after striking workers across the country crippled its ability to maintain production.

Hostess CEO Greg Rayburn said in an interview that there was no buyer waiting in the wings to rescue the company. But without giving details, he said that there has been interest in some of its 30 brands, which include Dolly Madison and Nature's Pride snacks. Experts agreed that it was likely the biggest brands would survive.

Hostess, based in Irving, Texas, filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than three years. Unlike many of its competitors, Hostess had been saddled with high pension, wage and medical costs related to its unionized workforce. The company also faced intensifying competition from larger companies . . . .

The shuttering of Hostess means the loss of about 18,500 jobs. Hostess said employees at its 33 factories were sent home and operations suspended Friday. Its roughly 500 bakery outlet stores will stay open for several days to sell remaining products.

The move to liquidate comes after a long battle with its unions. Thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike last week after rejecting a contract offer that slashed wages and benefits. The bakers union represents about 30 percent of the company's workforce.
I guess the 70% of the workforce that were not in the unions are just SOL. But the union leadership is probably too busy spending their Christmas in Cancun to care. The unions are also turning their sights on Walmart.
The union-backed groups OUR Walmart and Making Change at Wal-Mart, and a watchdog group Corporate Action Network, are calling on the nation's largest employer to end what they call retaliation against employees who speak out for better pay, fair schedules and affordable health care.
On Black Friday, the organizations expect 1,000 protests, both at stores and online.

A Wal-Mart spokeswoman said the number of workers who are raising concerns is very small and don't represent the views of the vast majority of its workforce of 1.3 million.

But labor experts say that even a small number of workers could make an impact.

"Even if there aren't that many people, it could have an effect, because their campaign in front of stores could discourage shoppers," said Ken Margolies, senior associate at the Worker Institute a Cornell University.

The strike could have an even greater impact if workers from its supply centers participate, according to Margolies. He said it could impede distribution of merchandise on what is usually the busiest day of the year.

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