Not accepting an 8% pay cut, 17% health care cut and massive pension cuts makes them thieves? Why isn't that statement turned to the upper management, who somehow received an 80% pay raise while in Ch11 bankruptcy? Or the fact that 8 different management groups couldn't make the company profitable for over a decade?
I'm not exactly happy to see what's turned into an icon shut its doors, but it's irresponsible and frankly juvenile to blame the union that blocked a bad deal.
This is exactly why manufacturing in America has taken such a downturn -- it's not profitable anymore. Unions aren't the only reason why it's become unprofitable, but they are the primary reason. The average salary of these union bakers is somewhere between $16 and $20 per hour, which sound entirely reasonable, but only if you don't factor in their pensions, and the ridiculous union rules that are pushed onto employers.
From a NYTimes article on the liquidation:
The bakers union has rules requiring that Hostess use two trucks to make deliveries to a single location: one for cakes, and another one for bread. When Hostess filed for bankruptcy, the company insisted that its labor costs and union rules were unsustainable, and it moved to renegotiate the contracts. One work rule required that two separate trucks be used to ship bread and cake products to a single retailer. The company also indicated that it faced $52 million in workers’ compensation claims.
I wonder if the union workers have a defined benefit pension package, or a market-based 401K program? I'm betting it's a defined benefit package -- which means it doesn't matter what happens in the market, they get their money. You just don't see that in the private market anymore because it doesn't make any sense anymore. It's like using two trucks to deliver to the same location.
I live in the belly of the beast, New York, and every year we hear about how the MTA (Metro Transportation Authority) has to raise public transportation costs. Every year, without fail. No one even bothers anymore to point out that pensions and salaries account for something like 85% of the companies expenses. It's just part of the political physics of the region; union members screw everyone else over and then pose as working class heroes. And these guys are thieves (Demik is right about this) -- they milk the system. They had a huge expose on how an obscure union rule states that pension rates shall be calculated as a percentage of the salary averaged over the last three years of work. So what do they do in the last three years? They put in for massive (often fraudulent) overtime pay and end up being paid nearly as much (or more) than what they earned while working.
Don't believe me?
http://www.osc.state.ny.us/press/releases/nov11/110911.htmDiNapoli's auditors calculated that the shift manipulation for 28 of the 30 employees in the Unit cost Metro-North $991,208 in overtime and $216,128 in pay for rest shifts in 2010. For six of these employees, the additional payments inflated future projected pension benefits by $5.5 million. One worker was able to increase his projected total pension amount by $1.5 million above what would have been earned at his regular salary.
These are union rules designed explicitly to be exploited and abused. And since this is a crucial public system (railroads) no one can afford to see it fail. We can do without Twinkies, but not public transportation. I long to see the days of Reagan return, when he promised the air traffic controllers not to strike or lose their jobs, and then followed through. Sweet, sweet nectar.
TL;DR?
Unions are killing the country, slowly but surely.
