This is hearsay, of course, but from my experience with what can go on between management and unions, this sounds about right.
There is no limit to the power of management when they choose to not care about a company and only care about their own compensation. In these circumstances, unlike those they employ, they can walk away and be more than fine.
Resubmitted from Gawker.com:
From the WSJ comments section - long, but worth the read:
12:10 am November 13, 2012
St Louis wrote :
Unions are not what is wrong with Hostess. Management is what is wrong. My husband has worked for WonderBread for 13 years. Explain to me how 4 mgrs for 5 employees makes sense? Tell me how the company goes into bankruptcy but can pay someone $1 million to "fix" the company. Those that are not involved with the company can say anything. It’s always the Unions fault. If you only knew what was really going on within that company.This statement is exactly what has happened. St Louis has been rumored to close for at least 3 yrs now. I would like to see you go to work tomorrow and say OK to any paycut. At some point you have to stick up for yourself.
I am a Hostess employee. Hostess stopped our pension contributions a yr & a half ago. Then they gave the top execs pay raises of 30-80%. They offered new contracts: no pension payments (no retirement plan at all for union employees, but company management still gets contributions to their retirement plans) for another 2 & 1/2 yrs, and then a 75% reduction in pension when they do start paying into it again; we have to pay an ADDITIONAL $200/ mo for health insurance; They took away our last cost of living raise; they gave us an 8% wage cut on top of that; they are outsourcing all of the office work to Manilla; they are closing 12 plants. THIS WAS ALL PART OF THE CONTRACT THAT WENT INTO EFFECT LAST MONTH!!
The 3 bakery closures were not due to the labor strike, they were locations on the closure list. Hostess used the opportunity provided by the strike to close them w/o having to pay severance or give notice. Hostess will be closing more plants whether the strike is resolved or not. We were told that if both major unions did not accept the new contracts, Hostess would IMMEDIATELY liquidate and we would all lose our jobs. Teamsters accepted (barely), Bakers did not. Hostess didn’t liquidate. We were told that if there was any kind of a strike, Hostess would IMMEDIATELY liquidate & we would lose our jobs. Bakers went on strike, Hostess didn’t liquidate. The Seattle bakery was literally 100 years old. They have been talking about closing it for years. Of the 3 plants closed- the only one on official strike was Seattle. St. Louis & Cincinnati were not on strike.
It’s frustrating for Hostess employees working their butts off and taking all these cuts, to still see Management driving luxury rental cars, flying all over the county at $1,000/ ticket, having meetings in Vegas, spending $200/ night on hotels, $75 on ONE meal for ONE person, golf tournaments at $1,000/ea, throwing away MASSIVE amounts of product because they don’t do their jobs right, the list goes on.
We keep taking cuts and they keep wasting money. We took cuts a few yrs ago (during the LAST bankruptcy) and the money was supposed to be used to update equipment, facilities, 50 yr old route trucks; new product development, etc. None of that ever happened. They wasted the money and then came back to us for more. Where are their cuts and sacrifices? I wish people out there would realize what’s going on. 6 CEOs in the past few yrs?? Doesn’t anyone see what’s wrong w/ this picture? There’s no one there anymore who truly cares about this company. It’s nobody’s ‘baby’. Nobody w/ the power to make decisions loves it. They just care about the money. It’s heartbreaking. I don’t blame any of the employees for finally saying they’ve had enough.