Monday, November 19, 2012

Could Bain Have Saved Hostess?

Right about now I'm betting that the 18,500 Hostess workers would love to have an outfit LIKE a Bain Capital step in and "reorganize" that company, even if (perhaps ESPECIALLY if) it resulted in a "leaner, meaner" (as high as maybe a 10,000 to 12,000 member) workforce...which is what Bain did - "made companies profitable again by slashing the bloated workforces of the companies it bought." Like most such places, I'm sure any manager could tell you, "We could do the same amount of work and deliver the same amount of output with 9,000 workers.” I'd bet 10,000 to 12,000 workers would be more than adequate.

Ironically enough, the Teamsters Union recently put out this statement that clearly lays the blame for Hostess' demise and the loss of some 18,000 jobs at the feet of the BCTGM (Bakery, Confectionary, Tobacco and Grain Millers International Union);

“...In fact, when Hostess attempted to throw out its collective bargaining agreement with the Teamsters in court, the Teamsters fought back and won, ensuring that Hostess could not unilaterally make changes to working conditions during the several months’ long legal process that recently ended. Teamster Hostess members were allowed to decide their fate by voting on the final offer conducted by a secret mail ballot. More than two-thirds of Hostess Teamsters members voted with 53 percent voting to approve the final offer.

“The BCTGM chose a different path, as is their prerogative, to not substantively look for a solution or engage in the process. BCTGM members were told there were better solutions than the final offer, although Judge Drain stated in his decision in bankruptcy court that no such solutions exist. Without complete information, BCTGM members voted by voice votes in union halls. The BCTGM reported that over 90 percent rejected the final offer and three of its units ratified the final offer.
“On Friday, November 9th, the BCTGM began to strike at some Hostess production facilities without notice to the Teamsters despite assurances they would not proceed with job actions without contacting the Teamsters Union. This unannounced action put Teamster members in the difficult position of facing picket lines without knowing their right to honor such a line without being disciplined.

“As is our longstanding tradition, Teamster members by and large are honoring Bakery Worker picket lines when encountered and complying with their contractual obligations when not encountering picket lines. The BCTGM leaders are putting Teamster members in a horrible position – asking them to support a strike that will put them out of a job when they haven’t even asked all their members to go on strike.

“That strike is now on the verge of forcing the company to liquidate – it is difficult for Teamster members to believe that is what the BCTGM Hostess members ultimately wanted to accomplish when they went out on strike. We may never know unless the BCTGM members, based on the facts they know today, get to determine their fate in a secret ballot vote. Teamster members would understand that the will of the BCTGM Hostess membership was truly heard if that was the case.”

That’s an astounding statement from the Teamsters, as it’s so rare to see one Union throw another under the bus, but the Teamsters claim that the BCTGM threw the Teamsters under the bus first.

Bottom-line, workers aren’t investors or shareholders, UNLESS they actually purchase shares in the company they work for. Even then, their loyalty MUST BE split. As an investor/shareholder their PRIMARY focus MUST be on profitability and the Company earning returns for its shareholders. As workers, they are free agents selling a commodity (labor) in an open labor market. They willingly accept the market price offered for that job. A Police Officer in Broward County FL, doesn’t have to accept the $28,000/year salary, he can move to Chicago or New York to earn more as a Policeman. The same is true for these “bakers.”

Now, apparently, those baking jobs will be done in China or Surinam at a better return for shareholders. American consumers primarily care about price and availability, so it’s doubtful there’ll be much of an outcry by consumers “willing to pay a little more to save a few such jobs,” especially when quality isn’t compromised in the cost-cutting.


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