Category Archives: Illinois Region

Poor management, not union intransigence, killed Hostess

Hostess WorkersBy Michael Hiltzik, Los Angeles Times, November 25, 2012

Let’s get a few things clear. Hostess didn’t fail for any of the reasons you’ve been fed. It didn’t fail because Americans demanded more healthful food than its Twinkies and Ho-Hos snack cakes. It didn’t fail because its unions wanted it to die.

It failed because the people that ran it had no idea what they were doing. Every other excuse is just an attempt by the guilty to blame someone else.

Take the notion that Hostess was out of step with America’s healthful-food craze. You’d almost think that Hostess failed because it didn’t convert its product line into one based on green vegetables. Yet you only have to amble down the cookie aisle at your supermarket or stroll past the Cinnabon kiosk at the airport to know that there are still handsome profits to be made from the sale of highly refined sugary garbage.

It’s true that the company had done almost nothing in the last 10 years to modernize or expand its offerings. But as any of the millions of Americans who have succumbed to Twinkie cravings can attest, there has always been something about their greasy denseness and peculiar aftertaste that place them high among the ranks of foodstuffs that can be perfectly satisfying without actually being any good.

Hostess management’s efforts to blame union intransigence for the company’s collapse persisted right through to the Thanksgiving eve press release announcing Hostess’ liquidation, when it cited a nationwide strike by bakery workers that “crippled its operations.”

That overlooks the years of union givebacks and management bad faith. Example: Just before declaring bankruptcy for the second time in eight years Jan. 11, Hostess trebled the compensation of then-Chief Executive Brian Driscoll and raised other executives’ pay up to twofold.At the same time, the company was demanding lower wages from workers and stiffing employee pension funds of $8 million a month in payment obligations.

Hostess management hasn’t been able entirely to erase the paper trail pointing to its own derelictions. Consider a 163-page affidavit filed as part of the second bankruptcy petition.

There Driscoll outlined a “Turnaround Plan” to get the firm back on its feet. The steps included closing outmoded plants and improving the efficiency of those that remain; upgrading the company’s “aging vehicle fleet” and merging its distribution warehouses for efficiency; installing software at the warehouses to allow it to track inventory; and closing unprofitable retail stores. It also proposed to restore its advertising budget and establish an R&D program to develop new products to “maintain existing customers and attract new ones.” Continue reading

Unions, buoyed by election results, are taking a stand

Protesters at Walmart

Protesters demonstrated over pay and working conditions at the Pico Rivera store in October. (Mark Boster, LAT)

Thousands of workers across the U.S. are striking and walking out of jobs rather than accept pay and benefit changes. Victories of pro-labor candidates give them hope.

By Alana Semuels, Los Angeles Times, Nov 21, 2012

They’re fed up and they’re not going to take it anymore.

That’s the case for thousands of employees across the country who are striking and walking out of jobs rather than accept changes to their pay and benefits. It might be a shot in the arm for a labor movement that had been left for dead but saw big gains in the November election as voters elected pro-labor candidates.

The number of union-related work stoppages involving more than 1,000 workers, which reached an all-time low of just five in 2009, rose to 13 this year as of October. And unions aren’t done yet.

Nurses are striking this week at hospitals operated by Sutter Health in California; workers voted against concessions at Hostess Brands Inc., forcing the company’s hand; pilots at American Airlines are wreaking havoc on the airline’s schedule as it tries to cut pension and other benefits.

“There’s a lot of agitating going on,” said Julius Getman, a labor expert at the University of Texas. “People are unhappy. They feel that they’re not being well-treated. There is a swelling of annoyance at the rich.”

This week, labor faces a pivotal test of just how strong this movement is, with a group called Our Walmart asking associates to strike at stores across the country during the retailer’s busiest days of the year.

The group says it is protesting Wal-Mart Stores Inc.’s retaliation against workers who seek to unionize. It wants to get the corporation to sit down with the group and listen to workers’ complaints.

“There comes a time when you have to stand up and you have to fix what is broke, and Wal-Mart is broken,” said Evelyn Cruz, 41, who works at a Wal-Mart in Pico Rivera and walked off the job there Tuesday.

Cruz says that the company has cut staff so that her department has half the number of people it once did, and that Wal-Mart gives poor shifts or fewer hours to the people who complain. She was one of a handful of workers who participated in the first strike in the company’s history in October. Continue reading

Labor Union Unfairly Blamed for the Hostess Meltdown

by David Macaray, Counterpunch, Nov 20, 2012

“Ignored or left to languish, even the strongest brands can decline or die.”—Charles Sullivan, Hostess CEO, 2000 (Source:  Mid-American Journal of Business, Spring, 2000)

“If you over-lever a business, and you don’t invest back into the business for a period of years, you’re going to wind up in bankruptcy.”—Greg Rayburn, Hostess CEO, 2012 (Source:  CNBC Squawk Box, November 15, 2012)

Unless a last-minute investor comes to the rescue (and there are rumors that Dean Metropoulos & Co., owners of Pabst Blue Ribbon beer, is considering acquiring the company), Hostess Brands, Inc., founded in 1930, will permanently shut its doors, put 18,500 people out of work, and begin liquidating its assets.

Despite the fact that it’s had two bankruptcies since 2004, that its management has proven woefully inadequate (it’s had six CEOs since 2002), and that its Wall Street masters ( a private equity firm and two hedge funds) burdened Hostess with $800 million of debt, the blame for this mess is being laid on the BCTGM (Bakery, Confectionery Tobacco and Grain Millars International Union), the union representing Hostess employees.

Let’s look at the facts.

The company was never seriously interested in solidifying and entrenching its position in the marketplace. Rather, caught up in the go-go exuberance of the “bigger is better” philosophy of the post-Reagan era, Hostess went on a wildly ambitious buying spree in the 1990s, one that more than doubled the company’s total number of production facilities and employees.

Then, in the early 2000s, despite warnings from market analysts, Hostess began buying back huge amounts of its own stock. Because the timing was bad, the move resulted in enormous debt and what was described as “balance sheet degradation.” One could make the case that Hostess was not only a poorly run company, but one that was crying out for a cohesive market strategy. You don’t go through six CEOs if you have a clear plan.

But they blame the union for their problems. Continue reading

Chicago Area Walmart Supply Workers End Strike, Win Back Pay

walmart suppliers on strikeby Matthew Blake, Progress Illinois, October 9, 2012

Employees at a giant Walmart supply warehouse in rural Will County returned to work Saturday after staging a 21-day strike in response to alleged employer retaliation by a Walmart subcontractor.

The settlement with RoadLink – a California-based subcontractor that helps staff Schneider Logistics, the Walmart warehouse in Elwood – comes amid a historic walkout by Walmart retail workers throughout the country. It also follows Walmart supply workers in the Los Angeles area ending their own strike.

According to Phillip Bailey, a striking RoadLink employee, the 38 workers on strike received letters in the mail from the company in which they rescinded their retaliation action. The subcontractor also welcomed workers back to the warehouse and provided back pay for their three weeks on the picket line.

Bailey says the settlement is “thrilling” and “absolutely empowering”, but it will take “years and hundreds more people” to improve the working conditions of Walmart supply warehouses. Continue reading

Detroit’s Wayne State U. Looks to Destroy Tenure

AAUP pickets Wayne Stateby Aaron Petkov, Labor Notes, August 15, 2012

Wayne State University in Detroit has proposed a new contract that would radically redefine the terms for eliminating faculty. The school would be the first research university to effectively abolish tenure, said the faculty union, which mounted a protest.

Wayne State University in Detroit has proposed a new contract that would radically redefine the terms for eliminating faculty.  Continue reading

Unions Crash Governor’s State Fair Event

Unions Demonstrate at State FairGovernor’s Day at the State Fair just not Quinn’s day

by Dave Mckinney, Sun-Times, August 16, 2012

Union members heckled him while he ate his State Fair favorite for lunch: pork on a stick. A plane flew overhead towing a banner blasting him as anti-worker. A labor leader was stumped on whether he was a better governor than the disgraced Rod Blagojevich.  Continue reading

Caterpillar: Corporate Greed, Plain and Simple

Catapillar worker, Irene Stiller

Irene Stiller, an assembler for Caterpillar for 39 years. (photo: B. Jackson)

July 27, 2012 Chicago Sun-Times

Champagne corks were likely popping last week at Caterpillar global headquarters in Peoria when the company announced second-quarter profits climbed 67 percent.

Business writers reported that Caterpillar’s had rising sales in “every region worldwide” and that “higher sales volume and prices provided a $2 billion boost” for the corporation.

But outside of its sprawling plant on Channahon Road in Joliet, some of the workers whose labor contributed to those gains were trying to figure out how they were going to get by on $150 a week strike benefits.  Continue reading

As Strikes Wane, Caterpillar Workers Hold The Line

caterpillar strikeby David Schaper, NPR

Whenever a car or truck turns off busy Channahon Road onto the long drive to the Caterpillar plant in Joliet, Ill., a handful of union workers on a picket line scream, “Scab! Scab!!”

As strikers try shaming the few workers and managers who cross the line, even a clearly marked sandwich delivery car gets shouted down.

Approximately 800 workers at this plant, which makes hydraulic systems for Caterpillar’s heavy construction and mining equipment, are about to enter their third month on strike. Continue reading

Wisconsin Academics Get Expansive Bargaining Bill

by Barbara McKenna, American Federation of Teachers, June 30, 2009 –Read original post

After 40 long years of advocacy and a roller coaster ride of hopes raised, then dashed, academic employees in the University of Wisconsin system finally have the right to decide whether they will be represented by a union. On June 29, Wisconsin Gov. Jim Doyle signed the 2009-2011 biennial budget, which includes a provision extending collective bargaining rights to more than 20,000 UW faculty, academic staff and research assistants. Continue reading