Fox Blames Union For Hostess Bankruptcy - Ignores CEO Pay And Hedge Funds

It wouldn't be a Saturday on Fox's so-called "business block" without several rounds of union bashing and this week was no exception with the panel on Neil Cavuto's show continuing to attack the labor union, rather than management and the hedge fund managers, for the demise of Hostess -- Fox Ignores Hostess' Array Of Troubles To Scapegoat Union For Liquidation:

It wouldn't be a Saturday on Fox's so-called "business block" without several rounds of union bashing and this week was no exception with the panel on Neil Cavuto's show continuing to attack the labor union, rather than management and the hedge fund managers, for the demise of Hostess -- Fox Ignores Hostess' Array Of Troubles To Scapegoat Union For Liquidation:

Fox News placed the blame for the planned liquidation of Hostess Brands squarely on a labor dispute with one of the company's unions. In fact, Hostess' unions had previously made significant concessions when the company went through a failed bankruptcy, and Hostess had many problems beyond labor costs, including an inability to adjust to changes in consumer tastes, which contributed to its bankruptcy. Read on...

And here's more from Daily KOS Labor -- 'Hostess Brands is a microcosm of what’s wrong with America':

As Hostess Brands announces its liquidation, the company's management is blaming a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers union—those damn workers wouldn't accept having their pay and pensions cut and their health care contributions increased just a few years after they made similar concessions in Hostess' previous, mishandled bankruptcy. "The forces most responsible" for the liquidation, CNBC's John Carney writes, "were two hedge funds that control hundreds of millions of Hostess debt and which have finally decided they won't squeeze any more filling into the Twinkie."

Only Silver Point and Monarch could have kept Hostess out of liquidation and kept the Twinkie bakery ovens firing. But they were, ultimately, unable to reach a deal with the unions that represents the workers who make and deliver products like Twinkies, Wonderbread and Ding Dongs. Without large union concessions—what some would say, total union capitulation—the hedge funds decided Hostess would have to die.

Hostess has clearly been mismanaged in recent years after having grown through the previous decades in ways that make its structure, including its labor force, especially complicated. But the end game is that private equity firms came in to do what they do: squeeze profits for their own multimillionaire investors at whatever cost to workers and to the company itself. Who cares if tens of thousands of workers are left unemployed and without the means to retire? Not Silver Point or Monarch, as long as they get their money. Who cares if Hostess exists tomorrow? Not Silver Point or Monarch, as long as they get their money.

These union members had faced a slow bleed for years. The only question for them was whether to accept an accelerated bleed and hope it would stop in a few years—but hope that in the knowledge that that was not a priority or even necessarily a desirable outcome to Hostess' private equity owners—or to fight for what they earned. We're hearing, and can expect to keep hearing, a lot about how it's so unreasonable of union members to expect to get the pay and benefits they negotiated and worked for, the pensions they've planned their retirements around. Because this is coming after a generation-long war on pensions and unions and middle-class wages. As AFL-CIO President Richard Trumka said in a statement, "What’s happening with Hostess Brands is a microcosm of what’s wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor." Read on...

And from Think Progress -- Hostess Blames Union For Bankruptcy After Tripling CEO’s Pay:

Today, Hostess Brands inc. — the company famed for its sickly sweet desert snacks like Twinkies and Sno Balls — announced they’d be shuttering after more than eighty years of production.

But while headlines have been quick to blame unions for the downfall of the company there’s actually more to the story: While the company was filing for bankruptcy, for the second time, earlier this year, it actually tripled its CEO’s pay, and increased other executives’ compensation by as much as 80 percent. [...]

Certainly, the company agreed to an out-sized pension debt, but the decision to pay executives more while scorning employee contracts during a bankruptcy reflects a lack of good managerial judgement.

It also follows a trend of rising CEO pay in times of economic difficulty. At the manufacturing company Caterpillar, for example, they froze workers’ pay while boosting their CEO’s pay to $17 million. And at Citigroup, CEO Vikram Pandit received $6.7 million for crashing his company, walking off with $260 million after the business lost 88 percent of its value.

Don't expect to hear that reported on Fox though. In Fox-land, it's always the greedy overpaid union thugs that are the heart of all of our problems.

About Heather

Comments

We welcome relevant, respectful comments. Please refer to our Terms of Service for information on our posting policy.