The most interesting tidbit in the sad demise of Hostess is the fact that the Teamsters union ignored a strike by a fellow union and crossed the picket-line in a bid to save the company. The Teamsters, not exactly a shrinking violet, got a look at the company’s books and realized the dire financial situation Hostess was in. They even implored the Bakers’ Union, which called a strike, to accept wage concessions and get back to work. Alas, they didn’t, and now the company faces liquidation. The Bakers’ Union ultimately accomplished what mere physics couldn’t; they pushed the Twinkie past its sell-by date.
Hostess Brands Inc. had warned employees that it would file to unwind its business and sell off assets if plant operations didn’t return to normal levels by 5 p.m. Thursday. In announcing its decision, Hostess said its wind down would mean the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores in the United States.
The company also announced that it would immediately lay-off its 18,500 workers. The Bakers’ Union only represented around 30% of the company’s total workforce. All other workers had already accepted wage concessions and changes to the company’s work-rules. 70% of the workforce accepted pay cuts of around 4% over five years. Given the general state of the economy, that seems very modest and would have allowed the company to continue operating. But, the Bakers’ Union instead went on strike, without even offering counter-demands. As a result, they have forced 100% pay cuts on all employees.
The behavior of the Bakers’ Union goes a long way to explain why, increasingly, we can’t have nice stuff in this country. A significant portion of the public thinks it ought to be immune from the consequences of its decisions and choices. They want to keep having free stuff, paid for by mythical “other” people.
We’re not so much facing strong economic headwinds as we are a great reckoning, reaping the consequences of decades of poor policy choices. Virtually every economic challenge we face can be directly tied to a well-intentioned, but misguided, government policy decision. Yet, many still labor under the illusion that even more government action can fix these problems.
Like the Bakers’ Union, many of us hope to avoid reality. But, such hopes have an expiration date. We’ve reached ours.
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