The War on Obesity advances because Hostess Brands Inc. has asked the courts to allow the company to dissolve. In January the company filed for bankruptcy. The company cited high commodity costs and problems with the Bakery, Confectionery, Tobacco Workers and Grain Millers Union. The union has begun a strike against the company which the company’s Chief Executive Gregory Rayburn said makes it impossible to continue producing its baked goods. Court documents verified the company suffered $7.5 million to $9.5 million in losses as a result of the strike. The International Brotherhood of Teamsters, the company’s largest union had negotiated an agreement but agreed that the strike would finish the company.
The bakery union claimed that a new contract proposal was “untenable.” The contract included wage, benefit and work rule concessions but also gave Hostess Brands’ 12 unions a 25 percent ownership stake in the company, representation on its Board of Directors and $100 million in reorganized Hostess Brands’ debt.
The new contract was designed to lower costs so that the Company could attract new financing and emerge from Chapter 11. For example, the company cannot sustain the 40 union pension plans; furthermore, they want to abolish and restructure the 5000 delivery routes which are not cost effective. By contract union drivers who deliver bread to their route stores cannot deliver icing-filled deserts to the same stores. A separate driver must take care of the desert deliveries which has driven cost up.
The stubbornness of the Bakery, Confectionery, Tobacco Workers and Grain Millers Union will now result in over 18,000 people losing their jobs. This is sheer stupidity. The only way the workers will get their jobs back is if another company buys out the Hostess Brands; however, a new company would probably demand new contracts without the onerous, inefficient demands of the unions or there may be a piece-meal sell off of specific brands. Either way, the union members have put themselves on the unemployment line.
As the Twinkies, Ding Dongs, Ho Ho’s, Sno Balls and Donettes disappear from the store shelves, the union members will wish they were not so foolish especially at Christmas. Unions are their own worst enemies. The winner is Michelle Obama’s War on Obesity.