Hostess closing up shop and laying off a dedicated, stable, Unionized labor force here in Denver:
The ripple effects of Hostess Brands Inc.'s decision to shut down will be felt in Colorado far beyond the 160 people employed at its Denver-area bread-making plant.
The company, which makes Twinkies, Dolly Madison cakes and pastries, Wonder Bread and other iconic products (like Ding Dongs!), also operates a chain of retail stores in the state.
Hostess Brands has stores in Arvada and Colorado Springs, and a combination store/depot in Loveland, Colorado Springs and Pueblo that each employ three people.
What the Denver Business Journal doesn't tell you FireDogLake does:
This is the second Hostess bankruptcy since 2004. The the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) union took multiple concessions in the first bankruptcy, and offered multiple concessions (I'd tell you exactly what they are but apparently they're having bandwidth issues at their site today) on wages and benefits this time around. But the contract the company tried to unilaterally impose was so bad, with a 27-32% wage cut and benefit slashes and the elimination of the eight-hour workday, that 92% of workers rejected it.
And after the strike initiated, Hostess moved right to shutting down the company rather than working with the union on a resolution.
In fact, Wall Street hedge funds and private equity firms own Hostess brands, and they took massive bonuses and payouts over the past eight years or so.
They dumped the company pensions, unilaterally stopped making pension payments that would have totaled $160 million, and plan to pay themselves with the sale of the liquidated assets of the company.
Their current CEO's main credential for the job is his "expertise in corporate liquidations," according to the union (he's also seen his pay triple).
The Bain Model: unilaterally punish workers, cripple the pension plan, extract all the wealth and transfer it to the CEO and other high level managers within the company. Then decalre Mission Accomplished! |
