It Leaves a Bitter Taste
Initially, this seems to be a non-Stratford issue. But once you bite into it, unlike the product, there is actually something meaningful inside that effects Stratford. 50 people in Bridgeport including Stratford residents will lose their jobs . For the past few days what appeared to be a man-bites-dog story (Twinkies) has turned into an anti-union propaganda campaign. According to the company’s CEO, Gregory F. Rayburn, Hostess is shutting down due to the unions’ unwillingness to negotiate lower wages, cuts in health insurance as well as the loss of their pensions. Somehow Mr. Rayburn continues to leave out the $100 million in concessions the unions accepted as recently as 10 months ago. He somehow also leaves out a few details about the company’s management issues.
As the national appetite for junk food waned, the company fell on hard times, struggling against rising labor and commodity costs. In 2004, it filed for bankruptcy for the first time…But the new private equity backers loaded the company with debt, making it difficult to invest in new equipment. Earlier this year, Hostess had more than $860 million of debt. The combination of debt and labor costs has hurt profits. The company posted revenue of $2.5 billion in the fiscal year 2011, the last available data. But it reported a net loss of $341 million. The Teamsters, which has 6,700 members at Hostess, said it played an instrumental role in ousting Hostess’s previous chief executive, Brian J. Driscoll, this year after the board tripled his compensation to $2.55 million. (Seriously? Losing $341 Million gets you a paycheck of $2.55 million?)
http://dealbook.nytimes.com/2012/11/16/hostess-brands-says-it-will-liquidate/
And what will happen to Rayburn after laying off 18,500 employees? “The CEO is going to get 1 percent of everything he liquidates,” charged Pierro, a union steward.http://www.ctpost.com/local/article/End-of-the-Twinkie-4043677.php
Note: 1% of, say $1 billion, is $10,000,000. Just sayin’….
Of course if you watch Fox News this is entirely a union issue. It is all about obstinate workers making unreasonable demands. Somehow the delivery truck driver or the line worker is being unreasonable and unwilling to give up anything to help management. But that version has all the substance of…well, a Twinkie.
