Union starts strike on company in bankruptcy

[Alkaloid]

I see no reason at all why the bakers union should accept a cut to try and save their jobs, because I don't see any evidence the company won't just ask them to take another or just flat out fold in a year or two. It's been bleeding money for years, been bankrupt four times and it shows no signs of getting better. They owe the company nothing, and I can easily see the union thinking the best option for the employees is to get out while the getting is good, be legally owed as much as possible (so don't negotiate away pensions) to keep the odds of getting some sort of payout as high as possible and try to get some sort of work that might have a chance of lasting. Otherwise they would ride a dying enterprise off a cliff for reduced wages, be made redundant anyway and have negotiated away any chance of getting what they were owed. Hostess has through malice or incompetence been unable to meet, it's contractual obligations to it's employees, and should die as a result. Free market ftw.

[Questor]

There's two very large problems with that:

1: The bakers union involved is a chapter (or multiple chapters) of the BCTGM Union. Riding hostess over a cliff without appearing to negotiate will naturally color other negotiations that international takes part in.

2: The union has at least some responsibility to the labor movement itself, and the American labor organizations continuing decisions to "take mine, screw the rest of you" is causing huge problems. Splits between unions that have maintained or lost pensions are perhaps the most public ones.

[Sea Skimmer]

I see no reason at all why the bakers union should accept a cut to try and save their jobs, because I don't see any evidence the company won't just ask them to take another or just flat out fold in a year or two.

That's pretty retarded thinking. Better no job then a risk that you might not like your job? And screw the people who outnumber you? I see no reason at all why one union should be allowed to fuck over all the workers of another one with more people. Its sure not fair or democratic or a shining example of union power, which is now actually diminished in the US market.

It's been bleeding money for years, been bankrupt four times and it shows no signs of getting better. They owe the company nothing, and I can easily see the union thinking the best option for the employees is to get out while the getting is good, be legally owed as much as possible (so don't negotiate away pensions)

Are you a complete idiot? The company is already bankrupt. When they liquidate pensions are one of the last things that will see a dime, and may see nothing. This is in fact the worst possible outcome as far as pensions go, the Union will never even see the backlog of debt paid off.

Your free marking nonsense is just that; if this was the free market at work then Hostess could have just fired every single striker and hired more teamsters to replace them.

[Alkaloid]

That's pretty retarded thinking. Better no job then a risk that you might not like your job? And screw the people who outnumber you? I see no reason at all why one union should be allowed to fuck over all the workers of another one with more people. Its sure not fair or democratic or a shining example of union power, which is now actually diminished in the US market.

So you think it's better to agree to loose your pensions and lower your wages, keep working for a year or so, slowly eating into whatever savings you have, and hope that when you do loose your job because costs just can't be cut any more that the job market is somehow better, than it is to be fired (which as I understand may allow you to try and claim unemployment benefits in the US) while you are still at least in theory entitled to a pension and have some sort of savings to live off while you try and find a new job? Either choice is a risk, I can see an argument wither way.

Are you a complete idiot? The company is already bankrupt. When they liquidate pensions are one of the last things that will see a dime, and may see nothing. This is in fact the worst possible outcome as far as pensions go, the Union will never even see the backlog of debt paid off.

Your free marking nonsense is just that; if this was the free market at work then Hostess could have just fired every single striker and hired more teamsters to replace them.

Yeah, when I say free market in this thread assume I am rolling my eyes and making a jerking off motion, because there is no free market involved at all and the sort of people that hate unions are the sort that shout how the free market will solve all. Then they castigate workers for not taking cuts to contracts that their employers voluntarily agreed to, applaud companies avoiding their contractual responsibilities because they either could not meet them or never intended to, and just assumed that when told to suck it up their employees would.

If this were a free marked the shareholders would be the last people to see money, as they put up the capital and were too stupid to pull it out when they saw the collapse coming, so they would actually assume the risk they claim makes the money they make justified. People that failed to meet contractual responsibilities like pensions would actually be held to account for them, not hide behind bankruptcy, and businesses that voluntarily took on debts to employees and ex employees they couldn't pay would be derided as incompetent, not patted on the back as they are consoled about how the unions screwed them.

And they could totally fire all their bakers I suppose, but they would still owe them whatever pensions they agreed to pay. Contract law still exists in the free market system as far as I am aware?

There's two very large problems with that:

1: The bakers union involved is a chapter (or multiple chapters) of the BCTGM Union. Riding hostess over a cliff without appearing to negotiate will naturally color other negotiations that international takes part in.

2: The union has at least some responsibility to the labor movement itself, and the American labor organizations continuing decisions to "take mine, screw the rest of you" is causing huge problems. Splits between unions that have maintained or lost pensions are perhaps the most public ones.

I agree, but I struggle to think telling the bakers they have to bend over to badly run companies for the good of everyone is going to solve the problem. What would is unions co operating to try and move all workers (not just members) out of positions in exploitative companies and into well run ones to limit the damage when they do go under, and to make it harder for those sort of entities get to the size where their collaps puts tens of thousands out of work. This is hampered of course by the same sort of people that get promoted to run unions being the same sort of people promoted to be CEOs, just on opposing sides.

[Starglider]

So you think it's better to agree to loose your pensions and lower your wages, keep working for a year or so, slowly eating into whatever savings you have

Keep your job and start looking for a better one at a non-dying company immediately (hopefully one with a defined-contribution external pension supplier rather than 'assume the host company will be highly profitable for the rest of time' defined benefit). Candidates that are currently working generally stand a much better chance the unemployed ones.

while you are still at least in theory entitled to a pension and have some sort of savings to live off while you try and find a new job?

The 'don't look for a new job until absolutely forced to' mentality is really quite sad; I know quite a lot of people who have pointlessly limited their careers with this kind of aversion to change.

Then they castigate workers for not taking cuts to contracts that their employers voluntarily agreed to,

Contracts get renegotiated all the time in business. I see it constantly in software where the original parameters of the project cannot be met or change for external reasons. When the contract says one thing and commercial reality says another, reality has right of way.

If this were a free marked the shareholders would be the last people to see money

The shareholders are the last people to see any money. In a bankrupcy equity is almost always completely wiped out, because by definition bankrupcy occurs when the company is completely out of capital (asset illiquidity is very rarely a problem with modern financial tools). The first people to be paid are the senior creditors, which is almost always in reverse chronological order of the date the agreement was made with the company, because why would you lend fresh money if you weren't getting seniority over the existing loans? Union agreements generally do not have seniority.

as they put up the capital and were too stupid to pull it out when they saw the collapse coming

I don't know how you think equity works, but shareholders cannot 'pull out capital'. They buy the shares at first issue, that's it, company has the capital, they get the future dividends if any. All you can do as a shareholder is try to sell to a different shareholder (presumably one with a more optimistic view of the company than you), which is very hard for a non-listed company spiralling down into bankrupcy. As Sea Skimmer pointed out it is telling that none of the unions involved showed any interest in taking an equity stake or management role.

People that failed to meet contractual responsibilities like pensions would actually be held to account for them, not hide behind bankruptcy

'People' do not have a contractual responsibility, the company did, and the company is gone. Removing the concept of a limited liability corporation would be hugely regressive because it would make it impossible for small investors to hold shares (due to risk of suddenly being liable for a share of unlimited damages due to holding a share in a corporation that did something bad). The fault here is 100% unions for being stupid enough (or should I say, union bosses for being selfish enough to mislead their members) to create contractual obligations extending forward indefinitely, instead of simply mandating immediate fixed payments to a third party trustee.

I agree, but I struggle to think telling the bakers they have to bend over to badly run companies for the good of everyone is going to solve the problem.

If there are well run competitors they should all leave and go work for them instead. If there are no well run competitors then it is an opportunity for the employees and/or union to start one. The fact that they don't proves that they know their compensation and insane working practices were unsustainable and were knowingly milking the company to death.

This is hampered of course by the same sort of people that get promoted to run unions being the same sort of people promoted to be CEOs, just on opposing sides.

You vote for them.

[Broomstick]

That's pretty retarded thinking. Better no job then a risk that you might not like your job? And screw the people who outnumber you? I see no reason at all why one union should be allowed to fuck over all the workers of another one with more people. Its sure not fair or democratic or a shining example of union power, which is now actually diminished in the US market.

So you think it's better to agree to loose your pensions and lower your wages, keep working for a year or so, slowly eating into whatever savings you have, and hope that when you do loose your job because costs just can't be cut any more that the job market is somehow better, than it is to be fired (which as I understand may allow you to try and claim unemployment benefits in the US) while you are still at least in theory entitled to a pension and have some sort of savings to live off while you try and find a new job? Either choice is a risk, I can see an argument wither way.

For clarification: in the US the term “fired” usually means “fired for cause”, meaning you did something really wrong such as steal from the company. (I realize this is contrary to the term's use in shows such as Celebrity Apprentice, I am speaking of how it is used in the context of real-world people out of work). If you are fired for cause you are typically not eligible for unemployment insurance benefits. If you are let go for other reasons the terms used are “laid-off”, “separated”, and so forth. Such people are eligible for benefits. Workers who are jobless due to the company being liquidated in bankruptcy are, indeed, eligible for unemployment benefits.

Alkaloid is correct that there are arguments for either hanging on to the bitter end or having one's employment terminated completely. The pro for taking unemployment is that you can then devote 40 (or more) hours a week to job hunting, and you don't risk your final paychecks bouncing, or simply not showing up at all, which is a real risk for a company going down the drain. The con is that being currently employed is usually a plus when you approach an employer looking for a new job, and usually pays more than unemployment. (Some US employers won't even consider a prospect unless said prospect is currently employed – no job, they won't even consider you).

[His Divine Shadow]

Jon Stewart brought this up on his show on the 27th. Highly recommended viewing.