Stolen

Here's another article about the Hostess bankruptcy that explains pretty well what's going on.

In 2005 it was another contract year and this time there was no way out of concessions. The Union negotiated a deal that would save the company $150 million a year in labor. It was a tough internal battle to get people to vote for it. We turned it down twice. Finally the Union told us it was in our best interest and something had to give. So many of us, including myself, changed our votes and took the offer. Remember that next time you see CEO Rayburn on tv stating that we haven't sacrificed for this company. The company then emerged from bankruptcy. In 2005 before concessions I made $48,000, last year I made $34,000. My pay changed dramatically but at least I was still contributing to my self-funded pension.

In July of 2011 we received a letter from the company. It said that the $3+ per hour that we as a Union contribute to the pension was going to be 'borrowed' by the company until they could be profitable again. Then they would pay it all back. The Union was notified of this the same time and method as the individual members. No contact from the company to the Union on a national level.

This money will never be paid back. The company filed for bankruptcy and the judge ruled that the $3+ per hour was a debt the company couldn't repay. The Union continued to work despite this theft of our self-funded pension contributions for over a year. I consider this money stolen. No other word in the English language describes what they have done to this money.

Because it involves Twinkies and Wonder Bread, this story gets a lot of attention.  But, in reality, it's been happening just about anywhere you care to look for decades.

Adding: Examples abound:  Ownership invests in executive bonuses instead of product:  OMG newspapers are dying! Fire everybody! Cut benefits! But of course it's the union's fault, or the internet's.

For much the same reasons, your public schools are being turned into profit centers with teachers becoming the scapegoat.

Some version of this is going on literally everywhere you look.

America's junk food goes Galt

Chick-Fil-A does not care for the gays.  Denny's, Applebees, and Papa John's, not too surprisingly, aren't fond of health care.  And now Twinkies are bankrupt.  All of our terrible foodstuffs are apparently going Galt. It's a sad time for the doughy Jeff Crouere who, parroting the Wall Street Journal, laments the loss of these good old fashioned American bites of chemically enhanced sugar-fat.

So, this ends a company that has been in business since 1930 providing delicious treats to generations of customers. While it is a sad day for most Americans, one person who will be celebrating is First Lady Michelle Obama, who is the self-appointed healthy eating czar in our country. She famously told her husband that he could not eat a fried Twinkie at the Iowa State Fair. Not long ago, Mrs. Obama bashed Gabby Douglas, Olympic gymnast and Gold Medalist, for craving the taste of an Egg McMuffin after the games.

Will this nonsense end with Americans only being able to eat food approved by Mrs. Obama? In just the past few months, New York Mayor Michael Bloomberg killed the Big Gulp and now the labor unions and the Obama economy have killed Twinkie. 

Yeah, it could be Michelle Obama and a bunch of arugula and granola eating "union thugs" got together and formed a Death Panel for America's deadliest delicious food approximations.  Looks like they've got their work cut out for them yet so I wouldn't get too worked up.


Bacon Fried Hot Dogs at Magazine Street Blues Festival November 2012

Still, we know how much even our supposedly mainstream conservative pundits enjoy a good conspiracy. Unfortunately the nation's kooks are mostly preoccupied with philandering generals at the moment so Twinkiegate may pass most of us by.

But becasue Crouere brought it up, it's worth pointing out that Michele Obama did not, in fact, kill the Twinkie. Despite the first lady's best efforts, Americans are more diabetic and obese than they've ever been.

The number of people living with diabetes is soaring in the U.S., as 18 states had at least a doubling in those with the illness since 1995, a government survey found. 

Diabetics made up 6 percent or more of the population in all 50 states in 2010, an increase from just three states, the District of Columbia and Puerto Rico in 1995, according to the report from the U.S. Centers for Disease Control and Prevention. Rates are increasing in tandem with obesity, which has reached epidemic proportions as physical activity levels plunge and daily calorie counts soar, according to the CDC.

More to the point, despite the efforts of conservative blabbers like Crouere to convince us otherwise, the unionized Hostess employees are also not the problem.

Hostess is in bankruptcy for the second time in recent years. Workers took concessions just a few years ago and this year the company has stopped making its contractually obligated contributions to their pensions. Meanwhile, according to the union, the company's CEO got a 300 percent raise, from $750,000 to $2,250,000, while other top executives got raises of hundreds of thousands of dollars apiece. Hostess may have problems, but, like the possible plant closings, they don't come from what the rank and file workers have done.

If you're wondering how it is a supposedly failing company can afford to raise its executive compensation by 300 percent you haven't been paying much attention to how vulture capitalism works. 

In 2004, the company entered bankruptcy with approximately $450 million in debt. It emerged after investment from Ripplewood Holdings. Today, it now stands at just shy of $1 billion in debt, despite additional investment by two more firms, Silver Point and Monarch. How did this happen?
These firms borrowed money to invest, which then they transferred that debt to the firm, simple. In effect, there never was any investment, only more debt added.

To emerge from bankruptcy, the companies unions agreed to large concessions which these vulture capitalists demanded, cutting thousands of jobs, transferring benefits or cutting benefits entirely. The companies also agreed to modernize the factories, which were running at a loss due to the age of the equipment, some of which dated to the 1930s. The investments from Silver Point and Monarch were to go towards this modernization. Instead the company found itself saddled with even more debt. To add to the company’s woes, the holding companies stopped supporting the retirement fund, raiding it for easy cash to extract from the firm. The current estimates put the liabilities of this fund at over $2 billion currently.

In order to “save” the firm, the operators of the company turned to the unions, which had already surrendered huge concessions just a few years back to turn the company around, and demanded an across the board slash, an additional 31%, along with eliminating the retirement and benefits entirely. It was a bridge too far. The union went on strike, and now the company has declared it will be liquidated.

In essence, they were bleeding the operation dry the whole time. All the while making obscene amounts of money specifically by putting the livelihoods and retirement benefits of their workers at risk.

Incidentally this is precisely the sort of thing that made Mitt Romney as spectacularly wealthy as he is today.  No wonder he was so fond of Zingers.