Your usual talent to distort truth and leave out pertinent facts was on prominent display in your editorial of Nov. 24, “Consuming the Hostess.”
The failure of Hostess Brands was not due to the unreasonableness of striking workers. The facts that you left out are as follows:
Hostess was acquired by a Bain Capital-style private equity firm, Ripplewood Holdings, in 2004. Since that time, these “restructuring experts” loaded the company with debt and appointed a succession of no less than six CEOs, none of whom had any experience in the baking business. Promises to invest in the company’s future were never kept, despite the unions having previously accepted major cuts in wages and benefits to help the company survive. During this same time, of course, executives enjoyed steadily increasing raises.
When the company made the latest round of demands for even further cuts, the Teamsters Union voted to accept them by a narrow margin. But members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union had grown weary with management’s games. They refused to “give up their pensions only to see another management team fail, and see Wall Street investors walk away with untold millions”, according to its president, Frank Hurt. They realized that “the plans of the Wall Street investors all along were to sell the company in whole or in part, in order to maximize the profits of these vulture capitalists, regardless of the impact on the workforce,” again according to Hurt.
In other words, Hostess had planned to close plants even if the workers had accepted the latest rounds of cuts and stayed at work. In reality, this is just the latest example of a company being poorly managed, run into the ground and then bled dry for maximum profits by private-equity investors.
Maintaining the fantasy that unions, despite having accepted major previous cuts, are entirely responsible for what is in fact a colossal failure on the part of management, ensures that the ever-increasing profits of Wall Street elites are well-served. But it causes a real disservice to those millions of middle-class Americans who are being forced to work harder and harder for less and less.
North Augusta S.C.