Lars Larson: Unions driving businesses out of business

 Lars Larson: Unions driving businesses out of business

by Lars Larson

We’ve learned another important lesson from the unions, like we really needed it after all.

Well, we’ve seen it happen right in front of us again. 18,000 people out of work – not all of them union members. But Hostess, a company that actually managed to survive the Depression, but could not survive the oppression of unions, has now gone out of business.

The whole thing is going to be simply liquidated because a bunch of union bakers decided they were unwilling to take an 8% pay cut. So instead, they’re getting the kind of 100% pay cut that we call a “pink slip.”

They’re all out on the bricks, and the company is going to have to sell all of what it’s got, probably at a loss.

Now is that the way America should be run? The unions have gone out of control. They’re driving businesses out of business all over this country and we’ve got to do something to stop it.

For more Lars Larson, visit Lars’ web site

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Posted by at 05:00 | Posted in Economy | Tagged | 22 Comments |Email This Post Email This Post |Print This Post Print This Post
  • crabman34

    There it is, that special GOP knee-jerk protection of corporations over people. Lars you are one special guy. In just a few words you convey all the ignorance and dishonesty of an entire party. Congratulations.

    Gee, maybe the union didn’t want to take a pay cut because the company’s sub-par (incompetent) management has been running the company into the ground for years, meanwhile sticking it to the employees the whole time while not sharing in the pain?

    Or maybe a country that is moving towards healthier food choices has changed the landscape somewhat, to the point that the company isn’t as strong as it once was?

    There was once a time in this country when workers were celebrated for wanting to work hard and make a good product. This would seem in line with the modern GOP’s obsession with “personal responsibility.” Sadly, your party now wants to blame workers for everything that goes wrong in this country. Instead of celebrating the blue-collar cogs of this system, you denounce them for wanting good wages and benefits. How dare they want to send their kids to college (after feeding them and taking them to soccer for 18 years)!

    Lars, you never cease to amaze. You know, if it was as simple as the workers refusal to take an 8% pay cut sinking the ship, then why isn’t Hostess simply moving abroad? They are liquidating for a reason, and it isn’t because the workers refuse to take (yet another) pay cut.

    Or not. Let’s just blame it on those damn employees for wanting to make a living.

    • Marian Oath

      Sacrebleu! Crabman34, a twinkie, perhaps, in his mother’s thigh – borrowed from the ILWU to provide ‘lisp’ service for the OEA, SEIU, AFSCME?

    • Rupert in Springfield

      > You know, if it was as simple as the workers refusal to take an 8% pay
      cut sinking the ship, then why isn’t Hostess simply moving abroad?

      Because when you are in bankruptcy that means you owe creditors money. In order to pay those bills assets are sold. Generally in a company the size of Hostess there is an attempt to first reorganize under chapter 11, if that fails then assets are sold. That’s the stage they are at now. Moving abroad doesn’t pay off creditors.

      Second there is the little problem that Hostess makes a low price low mark up product with a substantial amount of air in it. This makes it a shipping nightmare. So moving overseas might not even be practical.

      This is why certain things, notably toilet paper, have to be made close to the point of sale.

      Hope that clears things up for you a little.

      • 3H

        An even bigger problem.. workers already gave concessions on pay and benefits; while management gave themselves pay increases and bonuses. The problem isn’t the union, but greed and incompetent management who is now trying to blame anyone but themselves.

        • Rupert in Springfield

          So you are claiming that all of the CEO’s they went through, and all of
          the management, all of whom I bet are stockholders, all of them were
          incompetent. The teamsters were also incompetent, because they went
          along with the deal. The administrators under chapter 11 were also
          incompetent because the company could never emerge from chapter 11. And
          the bakers are blameless?

          Doesn’t make a lot of sense to think
          that many people were hell bent on plowing the company under and
          sacrificing their fortunes rather than to suspect the union bosses
          simply were unable to face reality . Basically more of your “Napoleon
          is always right” mentality.

          • 3H

            Then why did they go bankrupt? In 2005, the union gave wage, benefit, and pension concessions totaling 110 million per year. Now, Hostess wants more. Yet, they gave raises and bonuses to their executives. Precisely, how is it the union’s fault? How willing would you be to save a company that doesn’t respect or value your labor?

            I don’t know if all of them are incompetent, but enough of them were. Unless you don’t believe that those who are in charge bear ultimate responsibility. Was the union responsible for the crippling debt that Hostess accrued? Did the union force Hostess to not innovate and to only continue to produce the brands they always have (despite warnings in 2004 that sales of their products were dropping?).

            Finally, do you hate to be disagreed with so much that you have to resort to insults? If you have no facts to argue, dopey insults are not your best option; nor are they a satisfactory replacement.

            I’m not sure what you mean by the teamsters, but the Bakery, Confectionery, Tobacco Workers and Grain Millers’ International Union is affiliated with the AFL/CIO, not with the Teamsters.

          • valley person

            They got vultured. This company has been bought with debt financing I think 3 times in the last 20 years. It has been torn to pieces. The workers finally said enough. Who can blame them?

            This is what we would have gotten from a Romney presidency.

          • 3H

            The workers finally said enough. Who can blame them?

            Rupert. Evidently he, and a lot of other conservatives, believe that workers should simply show up on time, keep quiet, do their job (if only they weren’t legally entitled to breaks), leave — a little late, never hurts anyone to work off the clock, and be grateful for what they are given. Their employers know whats best, and while it’s cute when they try and think for themselves, it’s not a habit employers want to encourage.

          • Joe

            And now, due to their brave stance, they are all out of work forever! Nicely played.

          • valley person

            No Joe, they aren’t out of work forever. They will retire or find new jobs or start businesses. Companies fail sometimes. Its part of the free market.

  • Rupert in Springfield

    Really what needs to happen is not a change with unions, not a change with corporations, but a change with our laws. Unions should be no different, and get no more privileges, than any other service type company.

    When you contract with a union, that should be it. You are bound to keep them on for the duration of the contract. The union is bound to supply you labor at the agreed upon rate for the duration as well.

    Once that contract is up, that should be it. If the company wants to keep on hiring the union for its labor needs, then fine. If the company decides they can find better, or equally competant labor elsewhere they should be allowed to do so.

    This idea that once you are involved with a union, you are under some special compunction to hire them in perpetuity after the contract is up is ridiculous.

    In no other area of contracts that I am aware of is somebody bound to keep dealing with a body after the contract is up.

    • Granola girl

      Agree with you Rupert. Unions once had an important place in the work force, but now employees are covered by state and federal laws. I feel unions have worn out their welcome, and vastly increase the cost of production (think mil lright who in not allowed to turn a switch on due to it being under the electrician’s work, he stands around and waits….) We see so much waste in what is left of the pulp and paper industry, the union mills are not doing nearly as well as the non-union mills, and the employes are much happier dealing with their employers directly.

      • valley person

        This isn’t about the unions. Its about modern capitalism buying companies, loading them with debt, forcing “concessions,” and then repeating the process until there is nothing left.

        Defending capitalism is one thing. Defending vulture capitalism is something else.

        • Granola girl

          Your opinion valley person. I don’t agree with vulture capitalism either, but who are we to judge exactly what the circumstances are. I’m simply pointing out what I KNOW in the real world regarding union vs non-union shops. Unions and their bosses are corrupt and money hungry, kissing up to the Dems running for office, and intimidating those that don’t agree with their thinking.

          • 3H

            … but who are we to judge exactly what the circumstances are.

            Well, when you demand concessions from your workers, and then give yourself, and other executives, raises and bonuses I think that is at the very least money hungry.

            I can just as easily point out what I KNOW with regards to corporations vs. labor. That corporations are corrupt, money hungry, kissing up to absolutely everyone (but mainly Republicans), and intimidating those that don’t agree with their thinking.

            Ask someone who gets hired at Target about the mandatory, anti-union, meeting they are required to attend.

            Your caricature of unions is just that.. a caricature. There have been corrupt and dishonest union bosses. There have also been corrupt and dishonest CEOs. Our financial system was damaged by people more interested in making a quick buck than the considering economic good of the country. Many of them broke the law, and are getting their wrists slapped.

            I’ve been in unions all my life, and my experience has been vastly different than yours. Perhaps you’ve just had the back luck to run into a bad egg. Just FYI, frequently the union bosses that are corrupt are stealing from their own members. Unions protect their members from arbitrary rules and often illegal workplace requirement of employers in non-union shops. Not all non-union shops, but enough to make a union a good idea.

          • valley person

            So we each have an opinion on the matter.

  • 3H

    It would be really nice if Lars would do a little more research instead for simply regurgitating conservative talking points.

    The Union has already made, since 2004, steep concessions to Hostess.

    Hostess has incurred a massive amount of debt, much of it to various venture capital companies, one of whom took over management, and mis-managed Hostess.

    Hostess has been seeing declining profits over the years, and has done little to change how they do business.

    Hostess, in fact, and despite contractual obligations, stopped paying into the worker’s pension funds.

    At the same time that the company was asking for wage and benefit concessions (which they got) they were raising the pay of their executives… and continuing to give them bonuses.

    Why would the union want to make further concessions under those conditions? Why would they want to take a further cut in pay while management, which is responsible for the hideous financial condition Hostess finds itself, gives itself raises? As one worker put it: “It will be hard to replace the job I had, but it will be easy to replace the job they were trying to give me.”

    Salon: Vulture Capitalism

    • Joe

      So, tell me again why unions are necessary with all the job protection laws in place to protect workers rights? Just curious. I know why, but would like to hear your reason.

  • Bob Clark

    Last I heard a turn-around-company with some experience working with unions may buy out part of Hostess, and keep us all rich in those twinkies. Twinkies are o.k. once in awhile but they’re not my favorite food staple; because they don’t have any chocolate in them.

    If a union doesn’t cause its host business employer to fail it often speeds the business’s rate of automation in labor saving devices.

    Labor unions are the dreaded date no sensible employer asks for. More like a date with Rosane Barr or Peppi la Pew (the skunk guy who chased after female cats in Disney cartoon show).

  • valley person

    Hostess was Bain capitaled to death. Blaming the workers is like blaming the mugging victim for not just politely handing over his wallet. Lars needs to get a clue.

  • mike

    I am glad about the Twinkie thing. These are bad for us to eat, so it is good they are out of business. In a sense, the union helped us all stay in better health by ruining this business with their greed and avarice.
    I say job well done!

  • MadeleineTector

    I have been getting email from Rand Paul and the right to work gang for weeks now, I dont’ know what they are talking about or whom, it isn’t our Union, we have been members of the lithographers Union for 30 years and it merged with the Teamsters about 10 or 12 years ago, we have never had any trouble , they were voted on by everyone , there was one who said no so we had to wait another year and he finally said yes and we have been fine ever since.
    I think people are forgetting why we have Unions in the fiirst place, first of all, safety, no sweatshops with women and children working all hours o fthe night, a fire in a sweatshop killed 340 women and children in just such a place at the turn of the century. Now we have an influx of Mexican illegals coming in and they need work, they will work for anything, cheap labor, they need Unions, a few years ago we had a lot of trouble with women being abused by thier employers and even locked in the house and not allowed ot go outside, just made to clean all day, there were no wages involved, 16 million workers are going ot cause worse conditions than that if they don’t have unions . I was a Republican but all of that changed when Rand Paul started in, here is a guy who never had ot work, all of his 59 brothers sisters nieces and nephews have been given jobs in the Government, no matter how small, they are still jobs. If everyone is going ot go after the Unions they should go after all of them.
    Rand Paul seems ot think people should be able to join a union shop and not have to join the union, no dues, nothing, but they will get the benefits of the raises , thedays off but not the benefits of the pension plans. paul says they should be free to engage in friendships with other than union employess, the same should go for the union members I would think, they know that won’t work so they just closed down 26 union factories and workplaces in 21 states and are happy about it, most jobs that move out and away from unions pay half of what the Unions make them pay, down south they work for 4 dollars an hour and do so because they are starving, and the companies and factories take full advantage of it. My problem is who pays our retirement pension, Rand Paul? we paid thousands into it and we should be able ot retire in peace wih out being threatened with losing not only social security but our union pension too.
    This country is heading back wards, there will be soup kitchen lines again and a lot of people out of work, there won’t be union jobs so there will be no decent wages or benefits. its a big loss for the worlkers but what really started this is the fact the Unions backed the democratic parties, that didnt’ set well with the GOP, the GOP sure picked up a pretty penny from the Big corporations though, maybe all of that should be stopped on both sides, there has to be an answer. Mark Mix who runs a right to work org has actually made this his career, I’m sure with the donations he gets he has a great life , maybe he should try getting a real job instead of bothering other workers who need their jobs. Rand Paul has become nothing b ut a rab ble rouser and thats not the Governments job, this is private businesses not Government jobs, I mnotice Government workers have a Union, why odesn’t rand go after them, ?

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