Matt Crowder offers his opinions about how greed has ruined America’s favorite snack.
This morning as I was getting started with my Physical Therapy I received some troubling and sad news: Hostess is going out of business. The famous maker of snack cakes like the Twinkie and Ho-Hos is going to be shutting their doors. How could this be? Well after reading the article on ABCnews.com it all became clear.
As a little background on me, I’m not what you would call in shape, unless you are considering round a shape. I love my snack cakes from companies like Hostess and Little Debbie. I know I should eat better, but I’ll admit it: they taste good so I like them. Also, I am a Capitalist that understands what it means to be successful in business and the basis for making a profit. Revenue – Expenses = Profit. It’s a basic principle. Without profit a company can’t stay open. This is what happened at Hostess.
In recent years, Hostess has had to file bankruptcy twice in efforts to reorganize in order to stay afloat. Last month they made the tough decision to put forth a new contract that included a 7% pay cut and other cuts in benefits. When a business has increases—for instance in transportation costs and materials due to higher fuel prices—they have to make cuts somewhere. The easiest way to do so is by cutting labor costs. Keep in mind that Hostess didn’t just lay off people which would have been just as effective as cutting everyone’s pay. They chose to do what they could to keep all of their employees.
Unfortunately, Hostess’ efforts were thwarted because they were working with a union. I have nothing wrong with people who work in a union. But in this case, it’s the union leadership that screwed their members yet again. Hostess put out that if there were not enough employees that returned to work by 5 p.m. yesterday they would have no choice but to go out of business. Unfortunately, the union leadership and their members chose to call what they thought was a bluff on the part of Hostess. Only it wasn’t a bluff. Hostess announced this morning that it will be asking the Bankruptcy court to allow them to sell all of their assets including the rights to the beloved Twinkies and Ho-Hos. Now instead of over 18,000 people taking a 7% pay cut, they will be taking a 100% pay cut and they have only themselves and their leadership to blame.
During the last election there was a lot of discussion on outsourcing jobs to other countries. While it would be nice if we could keep these jobs in America, it’s not financially feasible to do so and stay in business in many cases, especially when the unions are involved. Take a look, for instance, at the price of our cars that are made domestically as compared to cars make in Asia. They have similar material costs and the cars are largely the same, but the labor costs are much lower in other countries because they do not have union labor costs to deal with.
I have a great appreciation for why unions were implemented in the early 20th century. They made great strides in ensuring worker safety and FAIR wages. This is where the unions of today have lost track. No longer are they concerned about fair wages, but instead they (the union leadership) are only interested in lining their own pockets at the expense of it’s members. Not all unions are bad, but there are many instances where instead of facilitating, they only hinder. Does anyone else remember hearing about what happened after Hurricane Sandy? Electrical workers from the south came up to help get the power back on ended up not being able to help due to confusion over a union contract that was presented to them. By the time they got it sorted out they were told they were no longer needed. How is this a good thing? They should have just been allowed to come and help. No contracts should have ever been sent in the first place. It’s a time of disaster when it should be all hands on deck, not sign here and then you can help.
In the end, I will miss my Twinkies even if that means that I have one less tasty treat to snack on. But each time I see one on an old movie or tv show and think back to the good old days when we had our treats it will remind me yet again why I will never, ever be a part of a union. I’d rather work for less than not have a job at all.