A Union Killed Hostess— but Not the One You Think
Holman Jenkins thinks the Teamsters are to blame for the Twinkie-maker's exit
By Kevin Spak, Newser User
Posted Nov 21, 2012 1:25 PM CST
A Hostess Wonder Bread truck is parked in front of the Utah Hostess plant in Ogden, Utah, Thursday, Nov. 15, 2012.   (AP Photo/Rick Bowmer)

(Newser) – What killed Hostess? Don't believe the people blaming private equity or America's changing tastes. Labor was the real culprit, writes Holman Jenkins at the Wall Street Journal, but don't blame the striking bakery union, which is, at worst, "guilty of perfectly justifiable attempted homicide." No, the real problem was the Teamsters. The bakers wouldn't budge because, as they "rightly saw it, they were being asked once more to prop up Teamster jobs." Hostess' bakery operations were actually pretty efficient. But its distribution was a mess.

Drivers weren't allowed to help load or unload shipments. Wonder Bread and Twinkies had to travel in separate trucks. The company was, it said in court, "unable to profit from many of their existing delivery stops," or to enter juicy markets like vending machines or movie theaters. Bakery jobs, meanwhile, "have become crummy-paying thanks to previous givebacks," and Hostess already planned bakery closures. So bakers decided to let the company liquidate and try their luck with new owners—even if it meant "throwing their Teamster brethren under a bus." Read the full column here.

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Nov 23, 2012 11:03 PM CST
The following is an example of a non-union company in a right to work state: "As a result of our collective success, Hyundai’s U.S. manufacturing operations have never laid off a single production or maintenance team member, and provide highly competitive wages and benefits — at an average of $49 per hour. With overtime and incentives, our production team members earned an average annual salary and benefits of $99,000 in 2011 – more than double the median household income for Alabama according to Census data. We pay our team members 1.5 times their regular rate of pay for Saturdays and 2 times their regular rate of pay for Sundays and holidays. With overtime and incentives, our maintenance team members earned an average annual salary of $119,000 in 2011 – more than triple the median household income for Alabama according to Census data. Hyundai Motor Manufacturing Alabama provides our team members with health insurance – and pays 93 percent of their premiums – in addition to dental, vision and life insurance, paid break periods, generous vacation and holidays, attendance incentive payments, and a career opportunity program, among other benefits." This is why the unions are not being successful in getting into these factories. They have nothing of benefit to offer these employees, and they know it.
Nov 22, 2012 9:47 PM CST
Executive Rayburn let out the dirty secret,,,"these old plants." meaning instead of investing in thecompany, they spent the profits on corporate jets, big bonuses, high salaries, top loaded management,,,,the competition with its new equipment is lowering costs driving the Ferrari while Hostess by not modernizing is driving the Model T. Whose operaing costs will be lower? of course they blame the union, neglecting the fact that pay concession, vacation give backs, and crewsize concessions were made in return of a promise of modernization, which never came about,,,,it happened in the steel industry too,,,,,the Americn way---blame the worker,,,,,,
Nov 22, 2012 4:18 PM CST
I'm not shocked that there is so much anti-union bias in the comment on this article, but I am saddened that there are so few comments about how things might improve if we examine cases like Hostess and learn from it. How much benefit would the shareholder gain if the cost of healthcare and pensions were removed as burdens on the corporations? When we had full employment these two benefits were used as incentives to lure employees to the company. Until we again reach full employment, and a labor 'market' is re-established these employee benefits are a horrible obligation on the company. These obligations could be passed to the unions, in the form of voluntary contributions, provided the unions pension and healthcare management was under close scrutiny. (Don't get your feathers all fluffed up about that being dangerous. There are significant numbers of companies who abused the management of set-aside funds, in the past). If you drive the cost of labor down to ensure competition with countries like China it will be the fastest way to drive labor into crisis mode. Isn't this how communism started? As a former CEO I believe in markets. My employees didn't need a union because they were happy to stay with a company that treated them fairly. I had my accounts payable department pay all vendors within three days of receiving the bill. I had no marketing budget because I never lost clients. So how were the shareholders rewarded by this? This successful company was sold to a multi-national and the shareholders haven't worked a day since. Don't fight the Unions. Incorporate them into a successful model. The unions are weak now so its a good time to get them to listen. Let's stop reliving the past and take the country forward to a new reality. What results do you expect if you squeeze the life out of employees, slow-pay vendors and create products/services that are not fit for their intended purpose? It's time for all of us to open our eyes and see the new reality of society and its future needs.