HOSTESS BANKRUPTCY – GREED STRIKES AGAIN!
I have spent several days reading articles related to the loss of 18,000 jobs because of labor demands. The liberal mainstream media has decided that the cause was due to poor management and greedy investors. Without doubt the Democrats in government will be the first to agree.
Anyone with a scintilla of common sense will discover that regardless of the union propaganda, the reason Hostess and the upcoming deluge of business failures will be caused by our “share the wealth”, union driven government regulators.
When any economy severely turns down, wages have to decrease. We have watched employment become a constant and growing concern. When taxes rise to support a ballooning unemployment and welfare need, less money is available in general circulation to support businesses. Combine this with drastic increases in energy costs and in Hostess case increased cost of raw materials, you have a dangerous situation of costs exceeding income. Another factor is the inability to increase prices to cover labor demands.
Corn alone is used in the manufacture of things you might not know. Government regulations that require gasoline to contain 10% ethanol have forced the price of corn out of sight. This year weather conditions in the Midwest and increased demand has nearly tripled the price of corn alone. Shipping cost of everything has drastically increased on everything in America. Can anyone believe that Hostess management or investors created these conditions?
Economic issues worldwide have resulted in hardship and insurrection in some countries this year. Some poorer nations are experiencing starvation. Did the people cause the economic failures?
When the cost of wheat, sugar, corn and fuels are increasing the costs of doing business and there is no way to increase prices due to competition, there is no money available to pay the workers what they demand. At Hostess the Teamsters union attempted to talk the strikers into halting the strike before they forced the company to close. The Teamsters, after seeing the books, agreed that no hope existed for getting what they wanted.
In my opinion union workers got what they deserved for forcing Hostess into bankruptcy.
Review the facts.
Following the union’s leadership the workers have now completed their mission. 18,500 jobs have disappeared.
Hostess posted a $341 million loss in 2011 on revenues of about $2.5 billion. The media reports do not include the following factors for people with common sense to know;
a) $52 million in Workers’ Comp Claims;
b) Dealing with 372 Distinct Collective-Bargaining Contracts;
c) Administration of 80 Separate Health and Benefits Plans;
d) Funding and Tending to 40 Discrete Pension Plans;
e) $31 million in year-over-year increases in wages and health care benefits for 2012 v. 2011
In addition were some of the outrageous union-imposed rules that made for a too-high-to-bear cost of sales:
f) No truck could carry both bread and snacks even when going to the same location;
g) Drivers were not permitted to load their own trucks;
h) Workers who loaded bread were not allowed to also load snacks and,
i) Bringing products from back rooms to shelves required another set of union employees.
Other expenses hidden from view by the media included Multi-Employer pension obligations made Hostess liable for other, previously bankrupted, retirement plan contributions from employees that never worked for Hostess.
Why has our government created these conditions? Americans wake up and stop these insane demands and their union forcing businesses into bankruptcy.
Our government stole the investor’s equity in General Motors and Chrysler. They gave it to the unions and we the people got to pay for the unfunded pension plans. The automotive unions must have priority over the Food Service Unions and the Teamsters or the government would have given Hostess to them.
We are a Republic of Laws, our Congress and President just follow the ones that they desire. Apparently over half of American voters really don’t care.
C Brewer
A Conservative View 