Let's Not Be Ding Dongs About This

I wasn't planning on writing about unions this week. It really isn't one of my most passionate topics. But with the recent news of the Hostess liquidation – it is difficult to ignore what is in the front of my mind.

On Friday, the hedge funds supporting Hostess announced that they will start liquidating the company and that nearly 19,000 people will be losing their jobs. The decision came after a one-week strike by the Bakery Workers Union. More than 90 percent of the workers voted to strike even after the threat of a permanent closing. It is possible they knew the closure was inevitable and went on strike anyway to help save the contracts affecting employees at other bakeries.

There are a lot of fingers pointing at the union. However, it should be noted that this company was trapped in a crème-filled mudslide for a decade. Hostess has faced two bankruptcies under six CEOs in 10 years. They were already planning to close nine plants regardless of the strike; they have had escalating debt and consistently diminishing sales; and most interestingly, earlier this year, executives pocketed outstanding raises. The CEO was given a 300 percent raise from $750,000 to $2,550,000.

Other executives had raises as high as 80 percent. This is DURING bankruptcy preparations! That is like maxing out all the credit cards right before a divorce. Pretty shady. It has been a cellophane-wrapped recipe for disaster with or without a strike.

To be fair, the company’s top four execs did agree to work for $1 until the end of the bankruptcy, but with millions in the bank, who wouldn’t? These funds, barely keeping the doors open, are often referred to as vulture funds. They often swoop in and buy a failing company at an uber discount and when the façade of wanting to succeed is over, they sell it off. This is much like what happened when Bain Capital took over KB Toys in 2000.    

While I believe in the benefit of unions, I sure wish we didn’t need them. I mean, there are successful businesses that are respectful and believe their workforce is their greatest asset, pay them a living wage, provide benefits, keep jobs in America and manage to gain hefty profits. Clearly, it CAN be done.

Wouldn’t it be nice if all corporations followed these philosophies? Unfortunately, we have seen far too much evidence of corporate leaders refusing to abide by that kind of honor system. We have witnessed the disregard for our environment and our people, not to mention the blatant abuses which are allowed or overlooked by American companies in other countries. We shouldn’t need things like unions and regulations and laws to keep corporations from exploiting the workforce and destroying our land. But, sadly, any progress we may have made as a human race – we have not been able to eradicate greed and its subsequent consequences.

Greed is awfully powerful. And it creates much evil in its wake. Seemingly good people can be corrupted by money and the fear of losing it. People begin to change their priorities. The more they get, the more they want. And pretty soon it resembles a junkie who will steal from anyone to get his next fix.

We have three branches of the government, committees, caucuses and departments. We do not put all of the power into one set of hands. Yes, the President is head honcho, but it takes a lot to get there and he still doesn’t have absolute control. So why should we put all the control into the hands of Lady Labor or Captain Corporation? Citizens United gave them a huge nudge in the direction of unilateral legislation. We cannot allow one or two groups to have the ultimate say in how we will live our lives, work and vote.

It is my belief that unions help everyone. They not only make working conditions and compensation better for union workers – they make these aspects better for ALL workers. They help set the status quo for employers everywhere. If corporations really had their choice on a five-day work week, an eight-hour work day or child labor – you can bet your bootie everyone would be working a lot harder and longer for a lot less. It wasn’t just union workers who benefited from those battles. It was everyone.

Do unions have too much power? Too much political influence? Is there corruption? Do we need transparency and accountability? You bet. To all of it. I am just asking that we do not throw out the baby with the bathwater.

Union leaders need to come to the table with reasonable expectations. They need to be open to transparency. They need to be held accountable for corrupt actions and lax policies. They need to demand professionalism and an impressive work ethic of the employees benefiting from their protection. Unions are not perfect and can definitely use some prioritization and introspection.

I believe this can work. I believe the two sides can, indeed, exist complimentary to one another. And I believe that the American workforce is counting on it. Because if unions dissolve completely – I also believe we are headed in a dreadful direction.

Brian Dey November 19, 2012 at 12:51 PM
There are a few comments here that need to be corrected in order to get a clearer picture. For one, as of January 1, 2012, 83% of the 19,000 employees were union. In July, there was 90% approval to strike by the rank and file. It is clear that the rank and file were okay back then to strike. As recently as October, an offer of 25% ownership in the company, 2 seats on the board and a $100 million secured note was offered in exchange for a two year freeze in pension benefits, an 8% salary reduction and 17% health benefits reduction. Relying on the previous strike vote in July, the union leaders voted to strike on November 9. Without voting on the Oct. deal, the union leaders, not the rank and file bear the load for the strike decision.
Brian Dey November 19, 2012 at 01:07 PM
Another misconception, is that executives were given huge raises. The reference in the article would lead you to believe that these were salaries, but in reality, these were privately held stock options. In other words, if the company liquidates, these executives receive nothing. So these options were incentive to keep the doors open, not close them as the writer indicates. I was also taken back by the writer's reference to vulture capitalists. It shows a clear lack of understanding who the owners are. A private investor, Ripplewood Holdings, invested $40 million, and two others, Silver Point Capital and Monarch Alternative, invested a total of $20 million and $15 million was secured through various debtors. None of these investors stands to gain anything out of liquidation and in fact, a successful turn around would have led to the investors getting only modest gains and they would have given 25% ownership to the employee unions. Where is all this corporate greed? And I really get a kick out of the writer's perception of the Citizen United decision. All this talk about fairness lately, and that is what the CU decision did. It gave corporations the exact same ability to free speech as the unions enjoyed for decades. Again, how is that unfair? To be sure, this was a union decsion to close the doors, and the remaining 18,500 workers are left out on the street, while Trumpka remains a 1 percenter.
Tansandy November 19, 2012 at 01:21 PM
Thank you for some accurate information with statistics to back up your view instead of the typical liberal pro union talking points with no facts or figures!!!
Heather Asiyanbi November 19, 2012 at 02:28 PM
@Brian - do you really think the Citizens United decision was the right one? I would argue against it because corporations - and unions - are NOT people. They are a group of people and should not enjoy the same rights as individuals as listed in the Bill of Rights.
Brian Dey November 19, 2012 at 06:18 PM
I didn't say it was right. I did say it was fair. What CU did was give the same rights to corporations as it had long given unions. So by definition, it made it fair because while both should be working together, they lobby for very different outcomes. Because unions usually put 90 or more percent of their campaign donations on attack ads for Democrats, left unchecked, that provided an unfair advantage for Dems. However, and I have posted this time and again, I believe that any organization, or PAC should be banned from any ads referencing in any way, shape, or form any candidate for office. I think all messages for a campaign need to come from the campaign, and that all moneys donated are spent through the candidate. I also would take that further and say that only individual donations at a specific capped level can be used for campaigns. Believe me, I didn't like the decision and was hoping for an outcome closer to my views. But if you are going to allow one, you have to allow the other. Until that day comes, it is the only fair way to proceed.


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