Thread: Economics Strikes dont always work.
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Old 11-16-2012, 05:56 PM   #136
alnorth alnorth is offline
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This episode is a good illustration that there is a difference between a smart union that knows when they need to give in, and a stupid union.

Since its a privately-held company, the unions couldn't access the books, but rather than go all angry fire and brimstone, the teamsters wisely hired independent consultants to take a good, long, hard look at the company. Those consultants came back and said "look, based on what we do know from court documents the company is not in great shape and is heavily in debt. Here's the bad news: that debt is now owned by hedge funds. Those hedge funds are now management, and those guys are not businessmen, they are cold-blooded reptiles. If they don't see an easy, clean path to getting their money back through a new contract and concessions, those bastards will pull the plug, fire everyone, and sell off the company, so you'd better agree to their final offer"

The baker's union was run by a bunch of morons. They had no sophisticated outside experts giving them good unbiased advice, they were all angry, emotional, and led by fire-breathing hellraisers convinced that the company was lying. They ignored the Teamsters who pleaded with them to accept the contract, and put up enough of a roadblock to make their new owners give up on finding a new deal.

edit: apparently Hostess did open their books recently, and thats what prompted the Teamsters to conclude that it was not a bluff. From another article:

Quote:
Ken Hall, the Teamsters secretary-treasurer, said his union didn't doubt Hostess' claims after seeing its books.

"I think it's obvious there was no bluff," said Hall. "Our financial advisers had looked at their books, they had total access. We pushed them in negotiations to where we thought it was the absolute limit, that we would get the most for our members and [still] have a pathway back to prosperity for the company. The bakers' union disagreed with that."
From a teamster angry at the bakers:

Quote:
"They're losing [5,000] jobs," Ortuso said of the bakers' union, "but they're costing 18,900 people their jobs."
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Last edited by alnorth; 11-16-2012 at 06:05 PM..
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