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Hostess Execs Forced To Mediate With Union, Outcry Against Anti-Union Sentiment And CEO Raises Builds

By Kim LaCapria
Published on: 10:38 PST, Nov 20, 2012

Commentary | Hostess and the end of Twinkies have been in the news this week, as America registered a strong and at first, decidedly anti-union reaction to the news that the company had decided to close its doors rather than negotiate with its unionized workforce of more than 18,000.

Hostess Brands vs. the unions was a story that initially, no one delved into too deeply. Initially, the narrative was taken at the word of management — Hostess had been forced to shutter due to the relentless demands of greedy unions, and the tale was accepted as yet another indictment against organized labor in the US.

Hostess posted an announcement on their site early Friday that it was shuttering plants, blaming union intransigence for the decision. The statement was widely reported as a factual sit rep in initial stories published about the closure of Hostess operations, but as Friday wore on, a different perspective emerged.

That day, we here at The Inquisitr covered the dueling narratives as well as similar anti-union wrangling that led to the “problems” the USPS is currently experiencing with their budget. In both, workers were expected to concede and concede to the bone, with little in the way of wiggle from management in exchange for the deteriorated situation employees faced.

But a funny thing happened. Throughout the weekend, slowly the narrative shifted, allowing some of the union’s side of the story in the Hostess debacle to emerge — and just as we suspected, it wasn’t a case of worker greed tearing down the beloved Twinkie — calling to mind the words of labor organizer and folk singer Utah Phillips, who once said:

“Kids don’t have a little brother working in the coal mine, they don’t have a little sister coughing her lungs out in the looms of the big mill towns of the Northeast. Why? Because we organized; we broke the back of the sweatshops in this country; we have child labor laws. Those were not benevolent gifts from enlightened management. They were fought for, they were bled for, they were died for by working people, by people like us.”

One Hostess worker blogged about the past few years working at the company for Daily Kos, describing in dollar amounts what execs — many lasting a year or less and with no industry experience — took from workers as they came and went from the company in rapid succession. And what we learned is that lo and behold, despite record-breaking profitability and strong sales, Hostess just couldn’t manage to stop cutting salaries and benefits. How does the math work on that?

Daily Kos contributor bluebarnstormer details the concessions demanded by Hostess before the company closed up shop Friday, and few of us could afford such a drastic salary cut akin to the one union workers were expected to accept without complaint. The diary, titled “Inside the Hostess Bankery,” details the bloodshed:

“What was this last/best/final offer? You’d never know by watching the main stream media tell the story. So here you go…
1) 8% hourly pay cut in year 1 with additional cuts totaling 27% over 5 years. Currently, I make $16.12 an hour at TOP rate of pay in the bakery. I would drop to $11.26 in 5 years.
2) They get to keep our $3+ an hour [promised but reneged upon by Hostess] forever.
3) Doubling of weekly insurance premium.
4) Lowering of overall quality of insurance plan.
5) TOTAL withdrawal from ALL pensions. If you don’t have it now then you never will.”

The worker adds:

“Remember how I said I made $48,000 in 2005 and $34,000 last year? I would make $25,000 in 5 years if I took their offer.”

Of the $3 per hour pay cut, the worker explains:

“In July of 2011 we received a letter from the company. It said that the $3+ per hour that we as a Union contribute to the pension was going to be ‘borrowed’ by the company until they could be profitable again. Then they would pay it all back. The Union was notified of this the same time and method as the individual members. No contact from the company to the Union on a national level.”

Finally, he or she concludes:

“That $3+ per hour they [stole] totaled $50 million last year that they never paid us. They sold $2.5 BILLION in product last year. If they can’t make this profitable without stealing my money then good riddance.”

If the Hostess story was unique, or its treatment in the media for starters, it would be different. But Rolling Stone journalist Matt Taibbi, who has been covering the blatant looting of the working class by corporate America on many fronts for years, says that the tale in and of itself is not unique.

Speaking to MSNBC’s Ed Schultz on Monday, Taibbi said that the workers have once again been scapegoated by a new business model — akin to the one he detailed in his piece “Greed and Debt: The True Story of Mitt Romney and Bain Capital” this summer.

Taibbi said yesterday:

“Everybody likes Twinkies, there’s nothing wrong with the product … The workers are doing a good job, they’re putting out a good product — it’s that management has been incompetent, and it’s unfortunate that the narrative has shifted all the blame to the workers.”

Much like Bain Capital, Taibbi explains, a company called Ridgewood loaded Hostess up with debt and expected workers to pay the piper while still paying out massive dividends. He adds:

“It’s part of this overall mythology that we have to blame the workers for wanting benefits and wanting a living wage.”

Sadly, the narrative has seemed all too effective when we spot the Hostess workers’ plight referenced in the media or on sites like Twitter.

And in the meantime, while Hostess’ greedy unions tried to fight pay cuts that nearly halved salaries, where did all the money go?

It’s likely a long answer, but the union at the heart of the Hostess debacle, BCTGM, says it may have an idea why worker salaries are suddenly so burdensome:

“As the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.”

For now, Hostess execs and the unions have been ordered back to the bargaining table, so tears for Twinkies may be a bit premature. How the whole mess will shake out is unclear, but hopefully the anti-union propaganda won’t be a remaining legacy of the Hostess strike and potential closure.

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