When the Hostess company, which made Twinkies – that terrible confection and butt of jokes no one ate until they became a political hot button issue – went bankrupt in November of last year, the blame fell along predictable lines. The union blamed the incompetence of management while management blamed union costs.
You’ve heard this all before. We used to have steel in America and unions insisted virtually any contract would work out fine. As we saw with the baseball strike in 1994, every Democratic president and 40 years of Congressional control meant a ‘settle with the union or else’ policy was in place. When US Steel finally had enough and diversified to get out of steel, unions blamed mismanagement. And Pittsburgh, which once had 4 million people in its metropolitan area, now has a small fraction of that even after claiming a much larger metropolitan area.(1) Unions did the same thing with Hostess; they could not afford to give away a few percentage points, so they took a chance on giving away 100%. ‘Let it be sold to someone who knows what they are doing’, they said.
And so it has been. Private equity firms Metropolous & Co. and Apollo Global Management are restarting plants and hiring 1,500 workers. The old employees of Hostess are welcome back – but they have to apply for the jobs and they won’t be in a union.
The unions discovered that they could insult the people who write the checks as much as it made them feel good to do so, but it does not actually require union labor to make a Twinkie. The Teamsters and the other unions who promised higher wages to people if they would just pay dues and stick together against the companies employing them are suddenly disappointed no one will return their calls. Who would?
“We’re sure not going to invite the unions in. We don’t have to do it,” Michael Cramer, executive vice president of Hostess Brands LLC, told NBC.
Indeed they don’t. These were not coal miners and, thanks for the weekend, unions, you remind us of it every time you go on strike to have $50 an hour janitors, but unions would be a lot better off without the people running unions.
Welcome back, Twinkies. I bet the public will never notice a difference in taste.
(1) They are US Steel again and Marathon Oil is Marathon again. US Steel was smart enough to buy plants in eastern Europe, where the giant “millhunks” – hunkies – that were the backbone of Pennsylvania’s heavy industry came from. And they are doing just fine without unions there also.