The HQ is 30 minutes from our house, so we've been hearing about this for awhile. Don't believe everything you've read on this in the last week.
Hostess filed for reorganization because demand was down (eating healthy anyone?) and they were tied into union contracts that provided for a high salary and benefits, but didn't allow for a profit. The bakers (the group striking, but a small number of the total employees) were warned that if they didn't agree to the pay cut (8% immediately, with a 2% raise for each of the next four years), the company had no choice but to close. One of the union reps was on camera here just last week stating that Hostess would never close, it was just a tactic to force them to accept the pay cut.
However, expenses at Hostess were so high, they couldn't find another company to take them over or even combine with them.
People fail to realize that businesses have to make plans for several months in advance. My husband's company tends to make the most money from May to August and in September. But they still have bills to pay every month.
And there is a trickle down effect - I've lived it. People don't get paid, so they can't pay their bills, which means other companies can't pay their bills and so on.
I don't like the bonuses to the executives, but my husband explained that it a move to prevent a mass exodus of the people who can actually run the company or know who might buy part of it. It is to the benefit of the creditors. Getting less on the dollar is still better than getting nothing on the dollar. It has to be enough money to tide the executives over until the situation is resolved and they can get a new job. It is very long hours and lots of travel - very stressful.
The judge ordered the union of company back to mediation, but has a court date for Wednesday. Unless the union backs down, I don't see Hostess in business for long.
I feel sad for the non-bakers, whose jobs will be lost due to the way their co-workers voted. And the bakers are going to have a bit of a hard time finding another job, let alone one that pays what they were paid (or even the 8% less). There are a limited number of jobs for bakers.
Skin kids - Jason, Kevin, Allison
Canine kids - Bennett & Bailey (always in our hearts), Riley, Banker, Rogue and Boz
Feline kids - Zoey, Talley and Abra