Labor Unions Profit vs Business Profit

It seems most people are talking about the situation with Hostess, Twinkies and the labor union.

A trip to the store this week – made it clear that people are stocking up on Hostess products. Two local stores – and there were no Hostess products on the shelves.

Monday we heard the labor union and Hostess would be in mediation today – and people started making jokes about the people who stocked up on Twinkies and the people who had them listed on Ebay. Surely the union and management could work this out — they had been thrown a life line from the court and Twinkies would survive.

Well…. maybe not.

BREAKING NEWS – Hostess Brands and one of its biggest unions failed to reach an agreement in private mediation Tuesday, the company tells FOX Business. The move could pave the way for an ultimate liquidation for the snack maker. 

Let me preface this next comment and say the conclusion is based on various information I’ve read online — it seems there are plenty of operational issues with the company. It also seems that conditions from labor contracts have made it necessary to impliment a number of very costly operational decisions.

So – let’s see if I have this right…..

The unions make demands on the business and the business has to make changes in order to meeet these demands.

So a struggling business that has filed for bankruptcy protection a number of times – is now shuttering its plants because they cannot reach an agreement with the unions.

Hmmm – and 18,000 people are out of work.

I see that as a loss for unions, workers, business and the consumer.

A quick question — do unions understand that when their demands cause a business to lose money, they can not stay in business. Which means they cannot employee people.

What do you think?

Hostess continues to liquidate –

Picture also from the link listed above.

A Hostess Brands hiring sign is shown at the Utah Hostess plant in Ogden, Utah, Nov. 15, 2012.

CREDIT: AP Photo/Rick Bowmer


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