Comments about ‘Letter: State of dis-union; Unions should think before striking’

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Published: Friday, Nov. 23 2012 12:00 a.m. MST

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John Charity Spring
Back Home in Davis County, UT

Eric Green here is correct. If unions are not checked, they will continue to drive one business after another into the ground.

The left-wing teaches that unions can do no wrong, and thus, creates legislation that gives them more and more power. The inevitable result is that businesses are forced to pay artificially high wages for less and less work. This is a model that only a fool would think could be sustained for long.

As demonstrated by the Hostess situation, unions would rather destroy a business than give into sound economic theory. The union bosses want to earn their money from dues, rather than having to work for it. They deliberately ignore the central principle that wages must be earned, not given out as some sort of entitlement. As long as this view is the predominant one, business will continue to suffer.

Blue
Salt Lake City, UT

No Mr. Green, you're wrong on so many levels.

Chicago teachers went on strike because they'd reached their threshold of pain about the number of kids in their classes, lack of supplies and equipment, and the increasingly horrible conditions of their school buildings. Private buildings in similar states of disrepair would have been condemned as threats to the health and safety of occupants. "More money for fewer hours" was never part of their complaint.

Hostess employees went on strike because company executives were cutting wages and benefits while awarding themselves millions in bonuses even as the company struggled because of lower demand for their products.

Whether it was teachers or people who make Twinkies, the common issues involved deteriorating work conditions and inept, insensitive management.

When that happens, a strike becomes the workers' last practical recourse.

one old man
Ogden, UT

Unions did not destroy this company. It was destroyed by poor management and a flock of vulture capitalists and outfits similar to Bain Capital.

The workers are the losers. The vultures will walk away with million dollar plus Golden Parachutes. One example being the CEO who just recently was handed a 300% pay raise. Greg Rayburn was being paid $100,000 PER MONTH for his "services."

At least nine other top executives of the company also received massive pay raises, including one who received a pay increase from $500,000 to $900,000 and another received one that brought his salary from $375,000 to $656,256.

How can anyone justify this kind of thing?

(Anyone may verify this information by Googling "hostess ceo salary")

ECR
Burke, VA

One of the benefits of having a union is that it is so easy to find a scapegoat for the mismanagement of a company. The management at Hostess and the unions lived happily together for most of the company's history until new management took over in 2002. In 2004 the union made major concessions saving the company over $100 million but that money was not reinvested in the company. Hostess went through a bankruptcy and then demanded more concessions from the union but the union, remembering they had been fooled once, refused to go along. Since 2002 Hostess has had 6 different CEOs but none could fix the company's problems. But let's just blame the union...it's easier.

Scott C
Ephraim, UT

Why are unions needed now days? We have OSHA and our wonderful government to protect us from any miss management.

Mountanman
Hayden, ID

Sorry to confront you with the facts Blue, but teacher's unions are the reason our schools are failing to teach while we spend more money per student than any nation on the earth except Switzerland. Case in point; in Michigan recently, the teacher's union threatened to strike because the school district suggested the retirement age for teachers me increased from 47 years of age to a bit older. This same teachers union "graded" its teachers as 100% "highly qualified" while the state gave their school an "F" for student achievement! Union are entitlement parasites.

Blue
Salt Lake City, UT

Mountanman, you're cherry-picking data, again.

US expenditures per pupil include the cost of health insurance for education sector employees. Most other nations, especially nations in Europe with universal health-care, don't.

Truthseeker
SLO, CA

Hostess' problems go way back. They've been in bankruptcy since 2004.

CNBC: After Bankruptcy Hostess' "Sales Declined And Attempts To Roll-Out New Products More In Line With Changing Consumer Tastes Flopped." CNBC reported that the first round of bankruptcy "wasn't enough to save" Hostess, adding: "The company's sales declined and attempts to roll-out new products more in line with changing consumer tastes flopped." [CNBC, 11/16/12]

Forbes: Hostess Has Had Six CEOs In A Decade. When CEO Greg Rayburn took over Hostess in March 2012, he became the sixth CEO of the company in a decade. [Forbes, 7/26/12]

Wash. Post: January Bankruptcy Filing Shows Hostess "Would Have Lost Money Without Any Pension Costs At All." The Washington Post reported in January that Hostess "lost $250 million in the less than three years since it emerged from its previous bankruptcy. That means it would have lost money without any pension costs at all." The Post noted that Hostess "lost money in 30 of the past 37 quarters." [The Washington Post, 1/11/12]

Turns out that Hostess has no treasury department. It apparently doesn't have anyone who can perform treasury functions at all.

LDS Liberal
Farmington, UT

This letter and the facts of reality are so disconnected it's frightening --

When your compnay executives give themselves $Million bonuses --

and expects YOU [the workers, who actual do the PRODUCING of something] to take an 8% pay CUT
AND a reduction in beneftis
is hardly demanding higher wages!

These folks were not making $60K a year -- more like $25K.

They were willing to not only NOT get a pay raise,
Not even just stay even,
But they were even willing to take a pay cut for the company --
Just not that much while the Company executives gold-lined their greey pockets at their expense.

This was rediculous beyond all reality.

Even IF Hostess brand returns by another own --
Me and my family will NEVER buy from them ever again.

BTW --

Remember when the NFL got ripped apart when the $Billion owners
hired NON-Union replacement Refererees over a few bread crumbs!

And Labor Unions torn down the Iron Curtain -- not the Military, not the Capitalists.

Mike Richards
South Jordan, Utah

The misstatements being made show exactly why the Hostess union was completely wrong.

A company is funded by private capital. That capital is managed by a board of directors. The board of directors authorizes the hiring and paying of all management. Management executes the orders given it by the board of directors who represent the owners of the company. In a publicly traded company, those owners may be you and me. The board protects you and me from unrealistic demands made by those who are hired to produce the product.

Wages are paid according to the value of the work being done, not according to the profits made by the company. The owners (stockholder) are entitled to receive the profits. The workers are not entitled to receive the profits. If they want a share of the profits (or losses), they have to buy stock, just like anyone else.

Those who tell us that the worker is being "used" should open a lemonade stand and see how quickly a business fails when the workers are paid more than they are worth.

The Real Maverick
Orem, UT

It's okay folks, I'm sure Mitt Romney will create more jobs than the losses Hostess will have. I mean, it's not like Mitt has anything better to do anyway. His political career is shot. Maybe he can get back to doing what he does best! No no no folks, not flip flopping and pandering to whoever is in his crowd. I'm talking about creating (domestic) jobs!

Remember now, he campaigned soooooo much on being able to create jobs here and not in China. Without having to be distracted by all the other stuff now Bro. Romney can focus on creating jobs here!

one old man
Ogden, UT

Mike, are you SURE Greg Rayburn was worth $100,000 per month?

And, by the way, Hostess was not currently run by a board of directors. It has been purchased and repurchased several times by several different private equity companies similar to Bain.

One source says this: "But the workers—who are passing through their second company bankruptcy in a decade—said enough was enough. A typical worker saw his pay cut from $48,000 to $34,000, or $16.12 an hour, after the company’s first trip through bankruptcy in 2004.

The latest contract demands would have cut pay to about $25,000, along with significantly higher out-of-pocket expenses for health insurance. These are poverty-level wages, less than what many workers would receive on unemployment."

Or: "the private equity firm Ripplewood Holdings, which loaded the company with debt, halted pension payments and imposed crippling wage and benefit concessions."

So the question remains, WHO is really causing this? I submit it is not the workers or unions.

ugottabkidn
Sandy, UT

I will not waste my time reading and commenting on the above comments. I will however respond to the uninformed comments of Mr Green. His letter demonstrates a complete and utter ignorance of the facts of both situations but particularly the Hostess situation. I state unequivocally that Hostess was a victim of mismanagement plain and simple. Company cash was squeezed from the coffers by executives until it could give no more. On 2 prior occasions the union gave deep concessions and watched executives fill their pockets while encumbering the company with insurmountabe debt. Like most company failures, it's called mismanagement.

Hemlock
Salt Lake City, UT

Unions blame corporate management, Bain Capital (an insane analogy) and everyone else but themselves. Things will never get better until unions face reality. There is no one so blind as someone who will not see. Invoking Mitt Romney is another tactic of avoidance. Mitt would have made the company viable and Obama would have given Hostess a government subsidy at tax payers expense. Unions have killed the goose that laid the golden Twinkie and now they're looking for a scape goat.

Grover
Salt Lake City, UT

The DNews would do better publishing a feature article about the Hostess debacle rather than printing partisan opinion pieces without a shed of evidence to back them up. The comments, as usual have come down on the doctrinaire ends of both spectrum. Some have tried to present facts here only to be told they don't "understand". How can anyone understand when the story is only covered by TV news and several paragraphs in print about nothing but the current state of the company and workers. Have facts become secondary to politics?

Mike Richards
South Jordan, Utah

One Old Man,

What is the "value" of a worker? It has nothing to do with the needs of that worker. It has everything to do with the money that worker brings into the company because of the duties he performs.

Do a breakeven analysis on Hostess. How many Twinkies at how much does the company have to sell to pay a worker $16 per hour. What is the market size for Twinkies? What is the competition? Most important, how long does it take to train a worker?

The "value"of of most production workers is very close to minimum wage. Ask McDonalds.

If a worker wants more money he has to be more valuable. He needs to increase his skills. He cannot expect a "living wage" to push a button and watch a mixer.

Ultra Bob
Cottonwood Heights, UT

It is sad that in our world, we make false heroes of military men who wear a uniform and claim to fights and freedoms in foreign lands and then demean and criticize our friends and neighbors who are fighting for their rights and freedoms in our own town.

metisophia
Ogden, UT

Mike Richard

What is the "value" of an executive? It has nothing to do with the needs of that executive. It has everything to do with the money that executive brings into the company because of the duties he performs.

Do a breakeven analysis on Hostess. How many Twinkies at how much does the company have to sell to pay an executive $100,000 per month? What is the market size for Twinkies? What is the competition? Most important, how long does it take to train an executive?

The "value"of of most executives is usually less than the stockholders and board actually pay them.

If an executive wants more money he has to be more valuable. He needs to increase his skills. He cannot expect a more than "living wage" to run a company into the ground.

one old man
Ogden, UT

Okay, Mike Richards. So then will you explain how paying Greg Rayburn $100,000 per month (which works out to about $625 per hour) benefits the company?

Will you explain how what he does is so much more important than the man or woman who mixes the dough or adds the cream to the Twinkies?

How many Twinkies per hour are required to pay Mr. Rayburn. Is the company paying him for what he is actually worth, or is he being paid because of what he was able to convince the directors to pay him? So are we meeting his worth or meeting his greed?

Mike Richards
South Jordan, Utah

I've looked at the salaries paid to union "executives" and wondered why those "executives" didn't tell union members to get training, to get skills, to be more valuable. They told under-prepared people ro demand more without giving more.

Failure comes when we believe in false principles.

Teach people that value comes from skills and abilities not from just being on the job.

It is obsene to expect salaries to exceed value.

Overpaid union leaders lie to union members.

Increase productivity by increasing VALUE.

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