Tom the Dancing Bug, IN WHICH a Hostess Twinkies ad goes horribly awry, and Captain Industry gets more than he bargained for from the evil Union-Man BE THE FIRST ON YOUR BLOCK to see Tom the Dancing Bug every week! Members of the elite and prestigious INNER HIVE get the comic in their inboxes at least a day before publication -- and much, much MORE!

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  1. The CEO with the massive paycheck (in 2011) wasn’t the same one as was negotiating with the unions (2012), and he was notably trying to save the pension plans that were the main point of contention, and the Teamsters had already agreed. I’m generally very pro-union, but this was cutting off one’s nose to spite its face.

    “In March 2012, Brian Driscoll resigned from his position as CEO.[21] Gregory F. Rayburn, who had been hired and named Chief Restructuring Officer only nine days earlier, assumed the leadership position… In an effort to restore relations, Rayburn cut the salaries of the four top Hostess executives to $1, to be restored by January 1 (or earlier) of the following year.[22]”

    1. Then who is it that’s getting the $1.8 mil in bonuses?
      Hint: nobody who actually does $1.8 mil worth of work

      1. How are we supposed to incentivize the kind of brilliant management decisions which drove that company into bankruptcy if we don’t give the people at the top massive bonuses for doing so?

    2. Rayburn announced that the pay of the four top executives would go down to $1 for the year, but that their full salaries would be reinstated no later than Jan. 1. Hostess pays Rayburn $125,000 a month, according to court filings. At the same time Rayburn became CEO, Gephardt’s son Matthew, 41, the COO of the Gephardt Group, was put on the Hostess board as a $100,000-a-year independent director.

      This of course says nothing of the role of hedge fund managers in all this.

    3. “As for acting CEO Rayburn, the reason given for not cutting his pay too – he earns $1.5m a year – is that he’s not on the Hostess payroll.”

      Rayburn – 

      Is a member of the board of directors, aside from being CEO, and has wrangled from the bankruptcy judge a fairly free hand for awarding retention bonuses to management during wind-down operations. 

      He gave up about 1.5mil in “bonuses”, but that is meaningless paper sacrifice given he has the ability to make it up as CEO and member of the board after people look away. 

      Is the one who imposed the 8% across the board cut to all salaries but his own.

      Anyone who thinks the high management or the board took a hit or even agreed to take a hit collectively or individually in order to try and save the company, jobs, pensions or otherwise is somehow blowing smoke up their own butt.

    4. Or maybe your business model is awful and you’re cutting in the one place that doesn’t affect your profligate lifestyle. Years of mismanagement isn’t solved by one year of upper management thrift.

  2. I didn’t look into this one deeply…  I stopped doing so when I read that the bakers union required bread to be shipped separately from other baked goods (i.e. can’t put bread and Twinkies on the same truck) forcing the company to run multiple parallel distribution networks.  Lots in the press about hedge funds and executive excess, but it doesn’t seem that simple.  I get that each union’s job is to protect the interests of its members, but a big share of zero is zero.

    1. I read this too, among other things like:

      * Bakers were not allowed to move finished product to storage, required a Teamster to do that.

      * The drivers were not allowed to unload the product at the stores, another Teamster had to do it.

      * Said Teamster was not allowed to ride in the same vehicle has a product, so had to use his own vehicle and follow the delivery truck.

      While that seems throughly indefensible, I haven’t actually found a reliable source to back up these claims. Is there documentation in this, like a list of actual AFL-CIO stipulations?

      1. That is not true in Texas. The drivers unload and stock the stores. They work very hard and have long hours.

      2.  I’ve worked at a union shop before (gold mine), and often claims like this aren’t something the union required, it’s something the company requires. Eg., the contract at that mine said that you had to be paid at the rate for the work you were doing or your own rate, whichever was higher. If you were a laborer and were changing tires on equipment, something that’d normally be done by a mechanic, you had to be paid as a mechanic for that time. Result: company policy saying that if you weren’t a mechanic you weren’t allowed to change tires on a piece of equipment even if it wasn’t any big deal, you had to wait for a mechanic to show up. The union had no problem with laborers doing mechanic’s work as long as they got paid for it, but the company didn’t want to pay laborers mechanic’s wages. In other cases it was safety-related, if you weren’t a welder and had the safety and training certificates you weren’t allowed to do welding because the company didn’t want the liability if you did something stupid and got someone hurt or killed.

        I’d bet the real situation there is that the company doesn’t want to pay driver’s wages for loading/unloading time (so the driver isn’t allowed to do the loading/unloading), and they don’t want to pay the loaders driver’s wages (for safety you aren’t allowed where you could drive the truck unless you’re qualified and being paid as a driver, and the company doesn’t want to be liable if an untrained person does something stupid while they’re in the cab, so to be in the truck cab you have to be qualified to drive and paid as a driver).

        1. This mirrors my own (albeit brief) experiences working in a union environment while I was in college. Unions just want their people to get paid, was the company for which I worked that made all the weird stipulations to get out of having to pay fairly.

        2. Companies also tend to fire specialists once they realise generalists can do the job. Often, they can until something goes wrong. Or the quality suffers because the generalists are wearing too many hats or aren’t trained sufficiently.

        3. Why do you need a mechanic to change a tire? Why couldn’t they pay a labourer a labourer’s rate to do it?

          1. Well, a, it’s an example. and b. There are ramifications for the tyre not being changed right, so one of the things that protects companies, and ultimately their shareholders, is using qualified staff. Let’s say the company decides that a labourer can change a tyre, lets say they don’t do it right (hey, it happens, i’ve seen it happen) and the wheel literally comes off, and as a result, a member of the public is killed or injured? so what’s the corporate liability? it’s pretty big, since all they had to do was insure that a qualified person did the job, and not skimp on using a labourer. Don’t know about the US, but in most places making sure your workers are actually qualified, and you can prove it, keeps both the insurance down, and you from being sued for mismanagement.

          2.  Forget the labels for a minute.

            They only want people they know have the skill of changing tires to change tires.  They do not want to pay skilled labor wages to unskilled labor.  Simple enough, right?

            Now back to the labels:  persons hired as laborers are labeled “unskilled”.  Persons known to have the skill of changing tires are labeled “mechanics”.

            This isn’t entirely unwarranted.  I worked in a tire shop for a couple years and I saw a remarkable number of cars damaged by people changing tires without tightening the lug nuts, causing the lugs to shear and the wheel to come off the car at speed.  Seriously!  Lots of people cannot change a tire safely.

            The problem is that the corporate masters have substituted a rules system for common sense and adequate management on the spot.  They are trying to hire the cheapest, least competent people possible, by moving the intelligence out of people’s heads into rule sets.  You see this behavior everywhere.

          3. I wouldn’t change a tire unless there were no other option. I try to keep my DIY efforts to things that won’t kill me if they go wrong.

      3. There is no one villain in this piece.  Fortune’s web site had a huge article detailing the long line of fail that led to Hostess’ demise.  If there was a REAL culprit, it was the constant mergers.  All those union agreements that seem ridiculous?  It’s because ten different companies were absorbed and previous union agreements had to be honored…and multiple health plans, pension plans and other benefits had to be maintained.  Those claims you list though, sound like someone assuming that it all unions are the same union and that all unions are only the Teamsters.

        “The Balkanized nature of its empire gave Hostess a piecemeal labor situation, including a matrix of 372 collective-bargaining agreements, a dozen separate unions, 5,500 delivery routes, and no fewer than 40 multi-employer pension plans that are despised by management.”

        1. They doo look like made up crap from someone who wouldn’t understand logistics involved in manufacture and distribution

          I’ll stop at the first one; Why on God’s green earth would a worker monitoring a largely automated baking process leave a station to move finished product anywhere?

          So that everyone could stop and watch them do it?

          Maybe pat them on the back and high-five them on driving the forklift/pallet jack/lifting a bin so well for a baker?

        2. The more militant sectors of the labor movement have long pushed for industrial unionism where one union bargains for each industry.  Competing trade/craft unions is a sign of weak organized labor and strong capital.

  3. I wasn’t aware that anyone was blaming falling sales for the company’s downturn.  Is that really a thing?

    1. I can’t remember the last time I actually saw anyone eat one of those abominations. As one marketing professional noted, the Twinkie is not something anyone would invent today. Those highly-paid executives were coasting on a product that hasn’t changed significantly for the better part of a century.

        1. Nope, they were shit are shit and shall remain shit. They just won’t be Hostess shit anymore. The golden parachutes for management and shareholders will be woven of liquidation and licensing.

  4. it’s a combination of unrealistic executive compensation, unrealistic union compensation and falling sales.  pretty much the same argument for the auto bailout…  plenty of blame to go around…

    1. Lessee, the average salary before taxes/all source deductions of a baker at Hostess with 20 years of service was 45k. Before the negotiated pay cuts. 

      That’s unrealistic because (select one)

      A. Profit!

      B. but she’s in a union!

      C. 9/11!

      D. The economy!

      E. The executives took pay cuts! (oh wait…)

      F. Every CEO’s favourite, All of the Above.

    2. plenty of blame to go around…

      So blame gets spread evenly, whereas bonuses go directly to the people who need (and deserve) them the least.

  5. I was waiting for the “villain” to be distracted and overcome after catching a Hostess Pie or Twinkie, like in the real Hostess comic book ads of the 70s-80s..

    1. And why do you communists insist on whining about us selling you chinese smokestack residue as pet food? Treehugging hippies and your natural fallacy! As they said at Dachau, without chemicals life itself would be impossible. Or maybe Bhopal, all that ancient history gets a little hazy.

      1. Well, it would be impossible, since literally everything made of matter is made of chemicals

        Of course, Mike is being a little willfully ignorant here, since “chemical-laden” obviously isn’t intended to mean “filled with chemicals of any conceivable sort”, but rather “filled with artificial preservatives and similar compounds that in ingredient lists are given complicated names because they’re too new to have traditional ones”.

        But even then, not all such chemicals are necessarily bad for you, and often they’re feared purely because they sound dangerous rather than because of any actual evidence.  And making comparisons between artificial preservatives and _Dachau and Bhopal_ is just stupid.  Especially since those both involved _literal pesticides_, chemicals _designed_ to kill.  (And the fatal components of Zyklon-B weren’t even anything that fancy; it was basically hydrogen cyanide, a poison you can literally extract from fruit if need be.)

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