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18,000 out of a job at Hostess: Shrugging and who can blame them

Posted by overmanwarrior 11 years, 4 months ago to Business
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It's a shame, but no company can function when the product mix changes that much, and the employees refuse to adjust to that market.
SOURCE URL: http://www.theblaze.com/stories/the-twinkie-is-dead-hostess-to-close-18k-layoffs-expected/


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  • Posted by Solver 11 years, 4 months ago
    This is ultimately the fault of those union administrators that claim they represent the view of all their members. A failure of a “collective mind.”
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  • Posted by ObjectiveAnalyst 11 years, 4 months ago
    When will the Unions and the Politicians learn that Economics trump their perceived power? The real power is held by the producers / business owners and the laws of economics/ market forces which the business owners must respect. Government unions are the leading problem because the government’s ability to tax and print more funding distort the market, lead/ drive the demands of non-governmental unions and inflate compensation beyond sustainability in down markets. Apparently a full blown collapse/ strike is required. I have always been a holdout to the strike, more like a Reardon than a Galt, but it is becoming apparent that the takers would rather see Iconic American companies fail before they accept economic reality. Now I am leaning in the direction of Galt since the takers have increasingly demonstrated their ignorance and disregard for basic economics. They need a lesson in reality. The repercussions are unfortunately going to be painful for all, not just the takers, with the possible exceptions being the politicians who isolate themselves with a printing press.
    O.A.
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  • Posted by StarveTheBeast 11 years, 4 months ago
    And where did I read yesterday that the Unions said that they were laying off the workers just so they could keep all the profits? Really? We get rich by CLOSING factories and SHUTTING DOWN operations? It wasn't so much the fact that he said it that shocked me, is that 50.5% of Americans aren't educated enough to know why it's absurd.
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    • Posted by 11 years, 4 months ago
      They do seem to believe that money is stored in some vault someplace and all the evil company owners will take it with them to their next company. They don't understand the idea that money is..................MADE though productivity. If productivity does not happen, then there is no reason to have a business.
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  • Posted by hapullens 11 years, 4 months ago
    I just read that Hostess had to ask permission from the gov't to shut down and sell its assets. Even in failure, the gov't is in control! There's something very wrong with that.
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    • Posted by WWJGD 11 years, 4 months ago
      Well, yeah, they've been in Chapter 11 for nearly a year now.

      Once you file, the Bankruptcy Court is in charge of these things. It's not wrong, it's the way bankruptcy works. Basically to protect the creditors' rights from "someone" running off with the assets.
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      • Posted by $ bigjim 11 years, 4 months ago
        Thanks for pointing that out, WWJGD. I thought the same thing when I heard they had to go to a federal judge to seek permission to close and liquidate their assets. I forgot that they had already filed bankruptcy and did not make the connection.
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  • Posted by grover 11 years, 4 months ago
    Although it is easy to blame the company or the union, the real culprit, of course, is the federal government that imposes Obamacare on us. Add in there the NLRB for their totally union biased operations. Screw the unions. Different companies have different reasons for going Galt. Here is a good example of one more doing it.
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    • Posted by WWJGD 11 years, 4 months ago
      Uh, no.

      Lots of businesses are cutting back because of Obamacare, but Hostess isn't one of them. Remember that Hostess was a union shop, which means that her employees had the "gold-plated Cadillac" health-care plans that are not affected by Obamacare's regulations.

      Come on folks, let's stay honest here. There is plenty of evil in Obamacare to go around; there is no need to blame it for things it didn't do.
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  • Posted by rjfoley2012 11 years, 4 months ago
    Based on the title and many of the posts everyone seems to classify this company closing as a shrug. There is an implicit choice in the term shrug as it is used in the book. Galt and his friends chose to shrug. With Hostess, there was no choice. The changing market and culture of fitness weekened hostess. The labor burdens and of course the strike may have been the nails in the coffin. To be fair minded should we assume it was labors absolute fault? Don't we need to know more about how the company was run before we say that it must have been labor? I don't like collectivized labor anymore than the next objectivist but I really don't think there was a philosophical choice being made in this case.
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  • Posted by bigron 11 years, 4 months ago
    I'm viewing Hostess more like Twentieth Century Motors... giving to employees more than they really could until it is too late. An absurdity I heard reported was striking employees continuing to "strike", hoping another company will swoop in and pick up where Hostess left off. I could understand an entrepreneur coming in & buying discounted equipment and/or plants, but I would not see them wanting to hire the striking employees... at least not in wholesale. If I were to be the entrepreneur, I'd let potential employees know what I was willing to pay and they could take it or leave.
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    • Posted by StarveTheBeast 11 years, 4 months ago
      The, patents, trademarks and recipes are the value that can be sold. The employees, and their suicidal union masters, are just a liability that will be left up to the rest of us to continue paying for (in their unemployment compensation, medicaid, etc). But, if it's anything like General Motors, the current regime will award the patents, trademarks and recipes to the Unions as "compensation" for their "lost investment". Right.
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      • Posted by WWJGD 11 years, 4 months ago
        True except for one thing: the rest of us will not be paying for their unemployment compensation.

        Remember that UI (at the State level) is an insurance policy, not a welfare program. You draw from it according to what you have put in.

        Only the Federal "Extended Benefits" aka EUC is welfare. And it goes away at midnight on Jan. 1. None of Hostess' former employees will be on EUC before then.
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  • Posted by terrycan 11 years, 4 months ago
    The bakers union lost the "sanction of the victim." The only way we can be used is with our permission. Rearden was one of the last to go Galt. Hostess might be more like Danagger Coal or Hammond Automobile. Who/what company is next?
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    • Posted by WWJGD 11 years, 4 months ago
      I really don't think it's instructive to view this through the lens of Atlas. I'm willing to be corrected of course, but I've seen no statements from Hostess management that have any hint of Shrugging.

      I think this one is purely a business decision. They were already in Chapter 11, teetering on the edge of oblivion, and someone gave them a push.

      I don't think they chose to die. I don't think they really had much of a choice.
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      • Posted by grover 11 years, 4 months ago
        It really doesn't make any difference why a company Shruggs. They do for reasons they know and the union became their reason. Business decisions are going Galt regardless of their statements. Which of those that went Galt left a reason? They just did it.
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        • Posted by LetsShrug 11 years, 4 months ago
          I wouldn't expect Hostess to say the word "Shrugged". they'd be made a mockery of and the MS media would have a hay day twisting that all over the place. Better to exit gracefully and get out without all the riff raff crap. For those who can recognize a (union) shrug when they see it, will.
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        • Posted by StarveTheBeast 11 years, 4 months ago
          Those who know don't speak. Those who speak don't know. I think this is why so many of the characters in Rand's "fiction" piece just disappeared. Simply ceasing to feed the beast IS the statement. Or, to put it succinctly: Actions speak louder than words.
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      • Posted by 11 years, 4 months ago
        I wouldn't want to waste my time fighting to keep a business open if it's just too much a pain in the ass, and the profit wasn't there. Yet the striking workers expected such a thing.
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  • Posted by fivedollargold 11 years, 2 months ago
    I guess whether management shrugged depended on whether they had the option to fire workers. If a labor contract was in force, then no. It is indeed comical that the union bosses thought the company could be sold and continue operations. What businessman in his right mind would buy an unprofitable company with ongoing labor strife? You don't see Democrat Warren Buffett riding in on a white horse to scoop up this company out of "fairness." Liberal or not, he knows how to read a balance sheet.
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  • Posted by Non_mooching_artist 11 years, 4 months ago
    The mediation talks have, as I suspected they would, failed between Hostess and the baker's union. Interestingly, the secretary/treasurer of the Teamsters Local 145 in Stratford, CT said, "The baker's union thought they were playing a game with them, [Hostess], and they guessed wrong,".."We were gainfully employed,".."We had benefits. Now we have nothing." The IBT had reached an agreement to slash wages, pension funding and health benefits, but the bakers union wouldn't budge. I wonder if they like having their cake and eating it, too?
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  • Posted by SierraRose 11 years, 4 months ago
    It's sad that a union which represents only about 30% of the employees can put all of the employees out of a job with their demands. Their demands included that the union (not the employees, the union) be given 25% ownership of the company. The government gave it to the UAW and now the precedent has been set.
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  • Posted by cp256 11 years, 4 months ago
    I shrugged several years ago, I now have zero employees. I have kept the business open just treading water, but I am now leaning toward dissolving it. The rotters and looters will have nothing to eat but dirt if things continue they way they are.
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  • Posted by ssnyh 11 years, 4 months ago
    It would be nice to be able to replace those people who lack in appreciation for the jobs they have with some of the millions who have been months trying to find one. How can this be done? It would save many people a whole lot of trouble.
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  • Posted by Scotso01 11 years, 4 months ago
    Wonder Bread is about as good for you as GMO's are...Join IRT,PAN, OCA to make a real lasting difference.I work in the hospitality trade - if all chefs knew about GMO's & trans-fats, it would be a day to celebrate..
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