Not according to Fox News*-Romney-Style Economics Behind Decline of Hostess, But Workers Are Paying the Price
Hostess Brands is one of the most recognizable food companies in America, having manufactured Wonder Bread and Twinkies for decades. But now the company has announced they are liquidating, and company is unfairly blaming their workers, many of them members of BCTGM and the Teamsters.
The fact is that the responsibility lies with Hostess’ management and the vulture Wall Street private equity firm behind them, and yet the workers are the ones who will suffer the consequences of this shutdown.
Here are some facts about the Hostess situation:
Hostess is in bankruptcy for the second time since 2009.
For the past 8 years, Hostess has been owned by Wall Street investors: so-called “restructuring experts,” managers from other non-baking food companies, and now a “liquidation specialist.”
The Wall Street investors that own Hostess have no interest in the company succeeding – very similar to the situation of Bain Capital and KB Toys in 2000.
Hostess has had six CEO’s in 8 years, none of whom had any experience in the bread or cake baking industry. This, not any action by the unionized workers, led to their failure.
Hostess workers made numerous concessions, including this year when the company stopped making contributions to their pensions. They went on strike because management offered a contract cutting wages and benefits by 27-32 percent.
Despite their troubles, Hostess’ CEO got a 300 percent raise, from $750,000 to $2,250,000. Other top executives have also gotten raises worth hundreds of thousands of dollars.
Earlier this week when workers at 20 plants went on strike, Hostess management claimed they would close plants in response. In fact, they already had plans to close at least nine plants as part of a company-wide reorganization. They Mayor of St. Louis said of the closings “I was told months ago…”
Union's Stubborn Stand Kills Hostess, 18,500 jobs
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