Friday, November 16, 2012

Bargaining stalemate between Hostess and its Union

It appears that Hostess has a credible threat to shut down unless the Union makes concessions.
Hostess, based in Irving, Texas, has already reached a contract agreement with its largest union, the International Brotherhood of Teamsters. But thousands of members in its second-biggest union went on strike late last week after rejecting in September a contract offer that cut wages and benefits. Officials for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union say the company stopped contributing to workers’ pensions last year.
But listen to the video below, and hear the fears of the Bakers Union, that if they make a concession to Hostess, other companies would want similar concessions.

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  1. Any company that can't sell nostalgic junk food to Americans deserves Chapter 7.

  2. Lalitha BhojanapalliNovember 23, 2012 at 6:02 PM

    It looks like Union took the $0,$0 path. Did the Union loose just to make a point? Is this really a $0, $0 path ? Management might make some money by selling the company to a potential buyer. I am sure some one else will buy's Hostess and this time there might not be a union.

  3. (Haque Sheik):

    This is what happened on 30 Nov. Now the debate is about the bonuses Hostess executives are being paid to stay on. How do you incentivize an executive's job during the dismantling process? What is stopping these executives from quitting and looking for better opportunities else where? Handing over the company after bankruptcy is an important process.

    Moreover, with all the existing laws protecting workers' rights, unions are expected to act more responsibly if they are concerned about the existence of the company. Find appropriate ways to incentivize decision makers in the workers' union to consider the impact of their decisions on the company's future.

  4. (Anshul Goyal)

    Great Article Sheik. I will like to add something to your comments. I don't see the reasoning behind Hostess paying bonuses to its top brass to stay. Its absurd by any means. Were there no employment contracts in place for these executives? When the common workers are not even been paid their pensions, these executives are been paid bonuses to stay. Company should have asked the executives to leave and should not bother paying them to stick around.

  5. I can truly understand how the Union members feel at Hostess. I belong to a Clerical Bargaining Union for a school district. We haven’t had contract since 2010. For the past five years we have seen the teachers salaries go up, the administrative staff settle their contracts with a five figure retro check and the Superintendent receive a $10,000 bonus if the graduation rate went up. Isn’t this the primary function of a Superintendent?

    The Superintendent offered us 1%, 1%, 0, 0 and 1.5% with no retro check for the past five years. Do the math of a person making $20,000!

    Each side is obligated by law to negotiate in good faith, which generally means openness and fairness. If they reach an impasse, which we currently are, then the conflict can be referred to mediation. If the union does not get satisfaction, it can resort to a strike.

    In the Hostess situation, each side bargained hard, that each side earned nothing. Unlike the game of chicken, someone swerves, but not in this case. Both parties stuck to their issues and ended up losing their jobs and management went into bankruptcy.