We Want Our Twinkies Back
This past week, a tragedy occurred. The entitlement and stubbornness of union leaders forced Hostess (makers of Twinkies, HoHos, Wonder Bread, etc.) to cease operations forever. The result: 18,500 jobs lost, $2.5 billion of revenue squandered, and millions of sweet-tooth consumers left with a craving.
Pretty much the same thing happened to this year’s NHL season. Greedy players who refused to accept the realities of team economics ended up losing a year of their careers while hockey fans were left out in the cold.
I’m sure collective bargaining laws were put into place back in 1935 for good reason. Workers in the industrial age were thought to be easily replaceable, so big, powerful companies could theoretically mistreat them. Concerns around workers’ geographic boundaries, ability to make their voices heard, restricted information, and limited choices led congress to pass laws that at the time were likely well-intentioned.
But a lot has changed in 77 years. Today, we live in an age of abundant information, boundless mobility, global competition, and limitless choices. A single worker’s concerns can be amplified worldwide through social media. And competition for talent is stiff, driving employers to do everything possible to delight their team members instead of mistreat them.
The architects of union legislation never imagined a world where spoiled athletes would use collective bargaining to extract an extra $1.3 million a year for throwing a fastball. Or unions that, when faced with the hard facts, would rather sink the ship of an iconic company than accept a wage package that allowed that company to remain competitive.
The problem with our laws is that they are permanent. Carefully drafted rules that consider all the nuances of the day cannot possibly remain relevant forever. It would make more sense for the laws to have terms – just like our elected officials. At the end of these terms, the details of the legislations would be revisited and adapted to the issues of the new day.
While we can’t easily change Congress, we can change our own efforts. What “rules” do you follow in your business or life that are mindlessly saluting the flag of the past? Isn’t it time to take inventory of your processes, policies, and procedures to carefully examine their relevance?
The most successful people – and companies – are those that constantly reinvent. They refuse to do things just because they’ve always been done a certain way. They are obsessed with constantly finding fresh approaches.
Let’s stop fitting yesterday’s square peg in today’s round hole. You’ll enjoy newfound success by challenging the rules of the past. Go ahead… give your old thinking a term-limit to break free from the shackles of tradition.
And while you’re enjoying the thrill of victory, I’ll (hopefully) go back to enjoying my Twinkies.
This whole mess has really got me fired up about the flaws with unions. What really blew my mind was the fact that out of the 18,500 workers that will be left unemployed, only 5,000 of them were actually union members. I understand not wanting to take a pay cut and wanting to fight for what you think you’re worth…but if the result of your stubbornness means that you and 18,499 of your co-workers will now get NO paycheck (and the rest of us get no Twinkies), it’s not worth it.
What a shame.
Josh – Kudos to you for not being afraid to take a position that is unpopular with many folks in this city. We need leaders, like you, to speak up. Thanks.
I don’t disagree with any of your comments on collective bargaining in general. While I’m not a fan of unions and they certainly played a major part in this, let’s not forget that Hostess has been mismanaged for a long time – they filed bankruptcy twice, were sold several times along the way. While several unions did agree to terms, the Bakery union workers were not willing to take salary and benefit cuts even in the face of the dismal sales/profitability results – something that did NOT deter management from taking increases. I would challenge all of the people who are SO upset about losing these brands to name the last time they ate a Twinkie. While I absolutely feel for the 18,500 workers who are out of a job, sometimes it’s okay for a brand or product to be left behind.
Fresh approach – that is exactly what you are! I love reading your blog.
I’m curious about the stories I’ve read about the CEO and other high ranking officers receiving 50% – 100% raises and bonuses prior to the declaration of bankruptcy. Where does this fit in with union negotiations? I’m a little surprised to see the word greed in this situation apply only to the union side.
If the success of a company is dependent on that company’s ability to reinvent itself, shouldn’t it also depend on the transparency of its books and the opportunities for the lowest paid employees to have a living wage and the ability to buy the products the company creates?
I agree that some unions put up roadblocks where they shouldn’t be, but with the scandals of our financial sector over the past 15 years, we need something to balance the greed among the stakeholders. The blame is most definitely shared in the tragedy of those 18,499 workers.
Growing up in Michigan the negative effects of unions became very evident in the 1980′s. Here is an idea, what if unions flipped thei model and guaranteed to field the highest skilled and efficient team possible. Would quality and profitability increase? Do you think people would have a higher opinion of unions?
I thought it was because people are becoming more health conscious and Twinkies weren’t selling. While I am glad to see those unhealthy snacks go and think unions have their place, I totally agree with you that collective bargaining is abused and needs an overhaul, like other outdated systems. Wish Hostess could transition to some healthier snacks, and get rid of those greedy union employees. I guess that makes too much sense in times that don’t make much sense.
Unions were once a good thing and virtually necessary in order to give the workers the power to improve horrible and unsafe working conditions. Today, the greed of the mob (and I mean that term in its original definition as massive group of people driven by the same ideals or sense of entitlement, has turned these unions into a cancer the very body of America herself. Public worker unions drive up wages, the cost of benefits and pensions of public workers to a point well beyond anything seen for comparable jobs in the private sector. This raises taxes on the private sector to a level that makes it difficult if not impossible for many companies in the private sector to complete globally (and locally if their local competive decides to outsource many of the jobs to other countries in order to survive). Many of these private sector companies already have union problems of their own which make it difficult to compete since the wages and demands of the union are often times in complete conflict with the best interests of the company as a whole. Private sector companies scale down or go out of business altogether. There is therefore less sources of tax revenue. The government raises taxes and grows government larger to fill in the gaps revenues to improve statistics such as employment rates (more government jobs). This is done in order to make things look heathier from an economic standpoint so that the private sector can begin growing again (owners of small business and decision makers of big business decide to hire again because of the perceived economic outlook) and then the whole cyle repeats itself when the unions get greedy again the moment things start to turnaround. It seems to me that the only way to get some type of control on the equation is to remove the cancer fromt he body. New legislation containing regulations on the powers of unions need to be enacted. The unions and collective bargaining needs to be limited to protecting workers safety and the quality of their working conditions. Collective bargaining for wages leads to promotion and pay raises based on seniority, and not the merit or hard work of the individual. It is bad for business and bad for United States of America. Of course, this will never happen so long as we have a two party system where one of the parties stays in control simply by creating a sense of entitlement within the unions and the poor and who have become dependent on a broken welfare system. This is done of course in order to get more votes (from the food stamp-receiving, welfare dependent, union card holding members of our society) more donations (mainly from unions and trial attorneys that thrive on these kinds of socioeconomic conditions – not to mention organizations and individuals who benefit from keeping entire groups of people down while having them believe they are getting handouts). Once people break this cycle, become independent and learn to be self-sufficient, they open their eyes to see how broken the entire system really is. They see how unions almost killed the U.S. Automotive industry, how unions have caused so many jobs to be shipped overseas, how the welfare system traps the poor in state of dependency on the government, and how the government can never raise taxes enough to fix the problem. This cycle will keep repeating and the national debt will continue to rise until something is done once and for all. Remember, if we gave 100% of our taxes to the government who then gave us a portion back for living expenses, then we would be a communist nation. The government would end up owning all of the businesses. The unions are the very thing that are going to get us there. It is also kind of prophetic and a bit of foreshadowing in how the collective bargaining of the unions which in turns creates the very sense of entitlement that union workers have and which leads to poor performance ["why should I work harder when I get paid the same regardless the quality of my work? I should be paid the same as the next guy as long as I am punched in for the same amount of time."], is in itself a microcosm of communism itself. There, I said it, the unions are the cancer, or better yet, the virus that leads to the cancer that kills this country as we become more and more of a European Socialist society and eventually a communist nation. That without the need for the “bloody revolution” that Karl Marx said is necessary. Let’s just hope that we can turn this around through proper legislation and shift the paradign of others in time before a “bloody revolution” is necesary to take America back on course – because that is something nobody wants to ever happen on this soil again.
First of all, I must apologize for the typos, poor grammar and mistaken punctuation of my earlier comment. I typed my comment in a hurried fashion as I ate my lunch at my desk. I also never went back to proofread it (how embarrassing). I apologize to those who read it, as it reads a little bit more like a rant than the conveyance of a cohesive comment regarding the original Hostess posting. Second, I must say that I do not care about the Twinkies themselves, as those things are not appealing to me. What I do care about are the 18,500 lost jobs, how that impacts those workers and their families, and how it resonates with the surrounding communities. In the end, there will be more than a hundred thousand people whose lives are directly impacted by the decisions that lead to the failure of Hostess to stay in business. Talk about the microcosm of going over the fiscal cliff. One side is unwilling to compromise and greed on both sides leads to the kind of stubborn pride that dooms all parties involved – not to mention the collatoral damage (surrounding communities of Hostess facilities as to the global economy relative to the U.S. budget game between congress and President Obama). I hope that this is not a precursor of things to come on a grander scale.
Josh,
When was the last time you bought twinkies?
The real issue here is that thankfully Americans dietary habits are changing and the market is smaller.
Blaming the unions is an easy scapegoat. Just as management chose the easy option back when by accepting stupid union requirements about only twinkles being delivered in Twinkie trucks. Management did not have the best interest of the company or shareholders by accepting this; where is their responsibility? Believe me I’m sure there is enough blame to go around here.
What about the pension fund that is underfunded by $2B ?? Where is the outcry over that?
Josh,
I appreciate your willingness to take a stand on an issue that a lot of people avoid. One thing I like about this post, though, is that you not only raised an issue but offered a solution. Detroit is fertile ground for opportunity. New ideas like law terms might be something City Council could try out in the future.
Unions were a good idea initially but as times have changed the focus has shifted off of the future well-being of the company. We see in this particular situation with Hostess that there are no jobs when there is no well-being of the company.
Whoa, Matt. That did come close to a rant, but thoughtful nonetheless. Wouldn’t it be crazy to take some of Josh’s principles and have the labor unions adopt them? Rid of the old adversarial models, and moving forward from both perspectives. Power, I tell you!