5 ms·

I mean if you engage in agreements with unions that are fundamentally impossible for the company to meet, I wouldn't exactly call that union busting. In fact fr

I mean if you engage in agreements with unions that are fundamentally impossible for the company to meet, I wouldn't exactly call that union busting. In fact from what I remember about this bankruptcy specifically, in order to continue operations they absolutely had to negotiate a new contract with all the unions. Every union but the bakers agreed. Because the bakers walked, they had to file bankruptcy. I feel like this is an example of the failure of unions. It also seems selfish that given that if you know bankruptcy is coming, one union would bankrupt the company when all the others were for it. If you hated the job that much, you can leave. In the end, it didn't save jobs, it didn't protect their livelihood, and I think it's quite possible that it delayed what is obvious now: automation was inevitable and layoffs were necessary. Their workforce of 8000+ is now ~1200 and only now are the becoming profitable again.

ebbv 10y ago
You can choose to believe that narrative, but I think that's what the Hostess executives fed to the media. I believe they deliberately negotiated in bad faith with the goal of declaring bankruptcy and restructuring. Some layoffs may have been necessary, but given how much profit they are making now I'm not sure I believe that all 6800 were. Plus, we aren't given details about how were these layoffs distributed? Were they all at the labor level or was anyone from corporate laid off? Did any executives take pay cuts? Are they all getting bonuses now? How much do they stand to profit from the upcoming public offering? My point being; the media was fed a narrative about the union being unreasonable and the bankruptcy and layoffs being "unavoidable" and they eat it up uncritically, and then the public does too. I don't think it's that simple. Unions are human institutions and like any human institution they can have issues, but they have served an important purpose in this country in creating the middle class. It is no coincidence that over the last 40 years unions have been systematically undermined, busted and halted everywhere and at the same time middle class wages have stagnated, with benefits that could have been expected at a middle class job in the 60s now being basically unheard of at a middle class job today.
- seibelj 10y ago
  What is your calculation for the proper amount of workers at the Twinkie factory? Modern technology allowed 1200 to do the work of 8000. How many workers would you mandate work at the Twinkie factory in your ideal vision of the world?
  - function_seven 10y ago
    I agree with your larger point, but in the specific case of Hostess, I'd say the proper number of workers would be the most the business could bear until the existing labor contract expired. In other words, do your good faith best to uphold your end of that contract (by employing as many workers as possible) until the contract ran out. Then you go to automation and severe reductions in workforce. EDIT: And everything I said is taking the argument that Hostess negotiated in bad faith at face value. I'm not even sure of that, and am willing to accept that the current state of affairs arose in an untainted way.
  - ebbv 10y ago
    Wow the libertarians are really pushing the straw men tonight. This is going to be my last response on this thread because I'm tired of explaining reality to you. Obviously my number would be the number that makes the most sense. You obviously take the view they did that already, but my point (which I've made all along) is that companies rarely cut into executive staffing, pay or benefits the way they cut into labor. Labor tends to pay the price of keeping the executive staff, pay and benefits as is even when times get tough. Ok enough of this tedious discussion. Have a good night folks.
    - Pyxl101 10y ago
      > Obviously my number would be the number that makes the most sense. Current business success would suggest that 1200 is the number that makes the most sense, since it's the number that allowed the company to climb out of bankruptcy into profitability. Employing 8000 workers would leave them with poor competitive positioning compared to other firms that were willing to take advantage of technological advances and automate and shrink their workforce in that area. Sometimes the advance of technology means that you need fewer people for the same job. Logging today for example is done primarily with machines. They have TV shows about it since what those machines do is pretty crazy. These machines now replace what previously teams of people working at sawmills did. > companies rarely cut into executive staffing, pay or benefits the way they cut into labor. Is this a bad thing? Why? Or why do you think it should be otherwise? Executive staffing is always needed, at least to some extent. You need competent executives to oversee and implement whatever automation strategy Hostess subsequently employed. You need people to negotiate effective contracts with vendors who can provide the robotics and automation and whatever else is necessary, at a good price and on good time, and oversee the project to ensure it succeeds. All sorts of obstacles might come up which require high judgment, out-of-the-box thinking, social connections, etc. to solve. Or you might need the expertise to hire people to do this job in-house. You need the ability to source them, hire them, pitch them on joining the company, and to design an organization and support system that allows them to succeed. You might need to hire a ton of people and managers to replace people previously laid off. This is what executives do. I'm not sure what you think was wrong with this situation. Hostess was held hostage by unions that inefficiently wanted to do with 8000 people what's now being done with 1200 people plus automation. Automation and technology are the way of the future; technology is the primary engine of economic growth. A company that's being held hostage by its unions against the maximally effective employment of technology is an ineffective, poorly performing company. That's what Hostess appears to have been under the unions. Sometimes new innovation means that fewer jobs in a certain sector are needed than were before. Sometimes layoffs are necessary when that is so. Of course the bakers union is not going to be happy about bakers being replaced with robots. I'm not sure on what basis you're implying that it's ethically wrong, though. It's regrettable that people lost their jobs and livelihood. It's regrettable that those same people held a company hostage and ran it into the ground. Why do you think executives at the new company should not be compensated? People who talk about executive pay at troubled companies rarely consider the perspective of an effective executive or company owner. If you're a leader with a good resume who has a track record of success, then you have opportunities at many companies in an industry. You don't need to work at a troubled company. The troubled company is likely to fail, and your reputation might be tarnished for being there, whether you had any responsibility for not. A company just emerging from bankruptcy needs to hire executives to perform the functions I mentioned above. Imagine that you're an executive, and you could either work at name-brand car company which is doing just fine, and growing nicely, or you could accept a job at Hostess and try to turn it around. The job at Hostess is high risk. You're bailing out a sinking ship. Actually, that's a bad analogy - the ship has already sunk and you're dredging it up. If you manage to pull it off, then perhaps you've accomplished something amazing, and perhaps you rightly deserve amazing compensation for turning things around when others could not. Consider Marissa Mayer at Yahoo. Another executive might have decided, "You know what? Yahoo's end has come. I don't think I can turn it around, so I won't try". Companies that are troubled cannot afford to stop paying executives well, because they are still competing for talent with other companies. Companies that are troubled and are in deep shit may need to pay executives more, to counterbalance the risk that the executives are taking from working there. And a company in these waters might pay its executives well in an attempt to retain them, since a company that's in deep water that also loses key executives is a company that's in danger of collapsing. It must be understood that executives have other job prospects too and will not remain working for a company with a poor ratio of compensation relative to risk. (I don't really know anything about Hostess specifically. I am writing based on general principles of economics and competition.)

ebbv 10y ago

You can choose to believe that narrative, but I think that's what the Hostess executives fed to the media. I believe they deliberately negotiated in bad faith with the goal of declaring bankruptcy and restructuring. Some layoffs may have been necessary, but given how much profit they are making now I'm not sure I believe that all 6800 were. Plus, we aren't given details about how were these layoffs distributed? Were they all at the labor level or was anyone from corporate laid off? Did any executives take pay cuts? Are they all getting bonuses now? How much do they stand to profit from the upcoming public offering? My point being; the media was fed a narrative about the union being unreasonable and the bankruptcy and layoffs being "unavoidable" and they eat it up uncritically, and then the public does too. I don't think it's that simple. Unions are human institutions and like any human institution they can have issues, but they have served an important purpose in this country in creating the middle class. It is no coincidence that over the last 40 years unions have been systematically undermined, busted and halted everywhere and at the same time middle class wages have stagnated, with benefits that could have been expected at a middle class job in the 60s now being basically unheard of at a middle class job today.

seibelj 10y ago
What is your calculation for the proper amount of workers at the Twinkie factory? Modern technology allowed 1200 to do the work of 8000. How many workers would you mandate work at the Twinkie factory in your ideal vision of the world?
- function_seven 10y ago
  I agree with your larger point, but in the specific case of Hostess, I'd say the proper number of workers would be the most the business could bear until the existing labor contract expired. In other words, do your good faith best to uphold your end of that contract (by employing as many workers as possible) until the contract ran out. Then you go to automation and severe reductions in workforce. EDIT: And everything I said is taking the argument that Hostess negotiated in bad faith at face value. I'm not even sure of that, and am willing to accept that the current state of affairs arose in an untainted way.
- ebbv 10y ago
  Wow the libertarians are really pushing the straw men tonight. This is going to be my last response on this thread because I'm tired of explaining reality to you. Obviously my number would be the number that makes the most sense. You obviously take the view they did that already, but my point (which I've made all along) is that companies rarely cut into executive staffing, pay or benefits the way they cut into labor. Labor tends to pay the price of keeping the executive staff, pay and benefits as is even when times get tough. Ok enough of this tedious discussion. Have a good night folks.
  - Pyxl101 10y ago
    > Obviously my number would be the number that makes the most sense. Current business success would suggest that 1200 is the number that makes the most sense, since it's the number that allowed the company to climb out of bankruptcy into profitability. Employing 8000 workers would leave them with poor competitive positioning compared to other firms that were willing to take advantage of technological advances and automate and shrink their workforce in that area. Sometimes the advance of technology means that you need fewer people for the same job. Logging today for example is done primarily with machines. They have TV shows about it since what those machines do is pretty crazy. These machines now replace what previously teams of people working at sawmills did. > companies rarely cut into executive staffing, pay or benefits the way they cut into labor. Is this a bad thing? Why? Or why do you think it should be otherwise? Executive staffing is always needed, at least to some extent. You need competent executives to oversee and implement whatever automation strategy Hostess subsequently employed. You need people to negotiate effective contracts with vendors who can provide the robotics and automation and whatever else is necessary, at a good price and on good time, and oversee the project to ensure it succeeds. All sorts of obstacles might come up which require high judgment, out-of-the-box thinking, social connections, etc. to solve. Or you might need the expertise to hire people to do this job in-house. You need the ability to source them, hire them, pitch them on joining the company, and to design an organization and support system that allows them to succeed. You might need to hire a ton of people and managers to replace people previously laid off. This is what executives do. I'm not sure what you think was wrong with this situation. Hostess was held hostage by unions that inefficiently wanted to do with 8000 people what's now being done with 1200 people plus automation. Automation and technology are the way of the future; technology is the primary engine of economic growth. A company that's being held hostage by its unions against the maximally effective employment of technology is an ineffective, poorly performing company. That's what Hostess appears to have been under the unions. Sometimes new innovation means that fewer jobs in a certain sector are needed than were before. Sometimes layoffs are necessary when that is so. Of course the bakers union is not going to be happy about bakers being replaced with robots. I'm not sure on what basis you're implying that it's ethically wrong, though. It's regrettable that people lost their jobs and livelihood. It's regrettable that those same people held a company hostage and ran it into the ground. Why do you think executives at the new company should not be compensated? People who talk about executive pay at troubled companies rarely consider the perspective of an effective executive or company owner. If you're a leader with a good resume who has a track record of success, then you have opportunities at many companies in an industry. You don't need to work at a troubled company. The troubled company is likely to fail, and your reputation might be tarnished for being there, whether you had any responsibility for not. A company just emerging from bankruptcy needs to hire executives to perform the functions I mentioned above. Imagine that you're an executive, and you could either work at name-brand car company which is doing just fine, and growing nicely, or you could accept a job at Hostess and try to turn it around. The job at Hostess is high risk. You're bailing out a sinking ship. Actually, that's a bad analogy - the ship has already sunk and you're dredging it up. If you manage to pull it off, then perhaps you've accomplished something amazing, and perhaps you rightly deserve amazing compensation for turning things around when others could not. Consider Marissa Mayer at Yahoo. Another executive might have decided, "You know what? Yahoo's end has come. I don't think I can turn it around, so I won't try". Companies that are troubled cannot afford to stop paying executives well, because they are still competing for talent with other companies. Companies that are troubled and are in deep shit may need to pay executives more, to counterbalance the risk that the executives are taking from working there. And a company in these waters might pay its executives well in an attempt to retain them, since a company that's in deep water that also loses key executives is a company that's in danger of collapsing. It must be understood that executives have other job prospects too and will not remain working for a company with a poor ratio of compensation relative to risk. (I don't really know anything about Hostess specifically. I am writing based on general principles of economics and competition.)