Monday, March 4, 2013 -Posted by Fadi Bejjani
Bakers Dozen Costs Millions to Uncle Dopey
By December 2011, it was reported that Hostess Brands was on the verge of filing for bankruptcy a second time due to financial problems. The company stopped paying future pension benefits after August, thereby breaking its union contracts. On January 10, 2012, Hostess Brands filed for Chapter 11 Bankruptcy for the second time. In a statement in its filing, the company said it "is not competitive, primarily due to legacy pension and medical benefit obligations and restrictive work rules." The company said it employs 19,000 people and carries more than $860 million in debt.
In November 2012, Hostess employees nationwide went on strike. The Bakery, Confectionery, Tobacco Workers and Grain Millers' International Union (BCTGM), which represents 6,600 Hostess employees, took the strike action after the latest contract proposal from Hostess Brands was rejected by 92% of its members. On November 16, 2012, Hostess announced that it has to cease plant operations and laying off most of its 18,500 employees.
The Department of Labor program, Trade Adjustment Assistance for Workers (expanded as part of the Trade Act of 1974), provides a variety of reemployment services and benefits to workers who have lost their jobs or suffered a reduction of hours and wages as a result of increased imports or shifts in production outside the United States. The TAA program aims to help program participants obtain new jobs, ensuring they retain employment and earn wages comparable to their prior employment.
The Secretary of Labor is authorized to implement Trade Readjustment Assistance (TRA) and relocation allowances through cooperating state agencies. TRA are income support payments that are paid in addition to an individual's regular unemployment compensation.
GUESS WHO WILL BE RECEIVING TRA PAYMENTS (THAT WE THE TAXPAYERS ARE SUBSIDIZING) ON TOP OF THEIR UNEMPLOYMENT BENEFITS?
You guessed it: The Hostess Bakers! It is not bad enough that, although they were paid TWICE the national average for bakers, they would not give an inch in union negotiations with the ailing company causing it to close its doors, now they are PROFITEERING from that very destructive move….and we the taxpayers are footing the tab!
These bakers will probably be making MORE MONEY NOW that they are NOT working than before. Bakers hours are early and brutal (Time to Make the Donuts!) but they chose to do it, not to live off the fat of the land.
What is to prevent many other union-backed companies to go down the same way?
It could be the beginning of the unraveling of American manufacturing …for good, hence the revised version of the time-honored GESTALT theory:
The Donut is only as Big as the Sum of its Holes!