Fri Nov 16, 2012, 09:38 PM
Omaha Steve (48,702 posts)
Private equity-owned Hostess blames striking workers as it liquidates (Romney-style deal)
From labor mail.
Get your Twinkies and your Wonder Bread now, because what you see in stores is the last of them. (At least until the brands are sold at auction and revived.) Hostess Brands has announced that it will liquidate, blaming a strike by workers in one of its unions as they rejected a contract that called for them to make major concessions on wages and benefits. The workers had taken concessions to help the company survive a previous bankruptcy, and this time around when the call for cuts came, members of the Teamsters narrowly accepted them while members of the Bakery, Confectionery, Tobacco Workers, and Grain Millers union overwhelmingly said no and went on strike. According to the company, it's all the workers' fault:
"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," said CEO Gregory Rayburn in a statement.
Of course, Hostess management had already claimed that the strike would be responsible for the closings of specific plants—when it had already planned to close plants even if the workers accepted the cuts and stayed at work. BCTGM President Frank Hurt says the workers understood who they were dealing with:
Our members know that the plans all along of the Wall Street investors currently in control of this company did not include the operation of Hostess Brands any longer than it takes to sell the company in whole—or in part—in a way that will maximize the profits of these vulture capitalists regardless of the impact on the workforce.
Workers were being asked to accept cuts, but top executives had gotten massive raises as Hostess was about to enter bankruptcy. Investments in the company's future that had been promised as part of restructuring after the previous bankruptcy were never made. And as for the management, put in place by the private equity companies that now own Hostess, Hurt says:
Unfortunately however, for the past eight years management of the company has been in the hands of Wall Street investors, "restructuring experts", third-tier managers from other non-baking food companies and currently a "liquidation specialist". Six CEO’s in eight years, none of whom with any bread and cake baking industry experience, was the prescription for failure.
This is a Mitt Romney-style deal. Throughout the campaign, we read about Romney's past deals that went very much like what's happening to Hostess. Now we're watching it in real time—and seeing how when workers fight back, they're targeted for blame.
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