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


Big Bird vs Twinkies

There was a huge media and online uproar about Romney’s plan to cut funding to Seasame Street – and Big Bird.

However – a week and a half into Obama’s second term (hoped I would never need to say that), Twinkies and Wonder Bread could be gone forever.

A little background about Sesame Street

Sesame Street is a long-running American children’s television series created by Joan Ganz Cooney and Lloyd Morrisett.The program is known for its educational content, and creativity communicated through the use of Jim Henson‘s Muppets, animation, short films, humor, and cultural references. The series premiered on stations on November 10, 1969 to positive reviews, some controversy, and high ratings.

The CEO’s Income – Peter Grier reports for the Christian Science Monitor, Oct. 9, 2012, that the president and CEO of Sesame Workshop, Gary Knell, makes $684,144 a year in reportable compensation.

Revenue in 2011 – Sesame Street is big business by the way. In 2011, it got $45 million in donations for its programming, $47 million from licensing Sesame Street products, and another $42 million in distribution fees and royalties. Sesame’s 2011 total revenue was $134 million. About $19 million of that comes from federal sources, only $1.5 million of which is PBS. Sesame Workshop’s total assets are valued at $289 million.

A little background about Hostess and Twinkies

Twinkies were invented in Schiller Park, Illinois in 1930 by James Alexander Dewar, a baker for the Continental Baking Company.[2] Realizing that several machines used to make cream-filled strawberry shortcake sat idle when strawberries were out of season, Dewar conceived a snack cake filled with banana cream, which he dubbed the Twinkie.[3] He said he came up with the name when he saw a billboard in St. Louis for “Twinkle Toe Shoes”.[4] During World War II, bananas were rationed and the company was forced to switch to vanilla cream. This change proved popular, and banana-cream Twinkies were not widely re-introduced. The original flavor was occasionally found in limited-time promotions, but the company used vanilla cream for most Twinkies.[5] In 1988, Fruit and Cream Twinkies were introduced with a strawberry filling swirled into the cream. However, the product was soon dropped.[6] Vanilla’s dominance over banana flavoring would be challenged in 2005, following a month-long promotion of the movie King Kong. Hostess saw its Twinkie sales rise 20 percent during the promotion, and in 2007 permanently restored the banana-cream Twinkie to its snack lineup.[7]

Hostess Brands, Inc., known as Interstate Bakeries during most of its existence since 1930, is a wholesale baker and distributor of bakery products in the United States.[2]

It is the owner of the Hostess, Wonder Bread, Nature’s Pride, Dolly Madison, Butternut Breads, and Drake’s brands.

For many years it was based at 12 East Armour Boulevard, Kansas City, Missouri. In 2009, after it emerged from a 2004 bankruptcy, the name was changed to Hostess Brands, Inc., and the headquarters moved to Irving, Texas.[3] Hostess Brands, Inc. sought bankruptcy protection under Chapter 11, Title 11, United States Code again in January, 2012.[4]

On November 16, 2012, the company filed a motion in United States Bankruptcy Court in New York City seeking permission to close its business and sell its assets. A hearing on the motion was set for Monday November 19, 2012.[5] Two days earlier it warned that Hostess would liquidate unless the bakers, who were striking in protest against a new contract imposed in bankruptcy court, returned to work.[6] Management intends to sell all assets and lay off 18,500 employees.

Here is the question — is anyone in Washington listening to the warnings that are coming each day from businesses??

Its TIME TO LISTEN – to have a real recovery in the US – we need jobs and businesses.

If you’re having Twinkie withdrawals – here is a recipe to make your own —

Pictures were shared from Facebook.