Unreal!

http://money.cnn.com/2012/11/16/news/companies/hostess-closing/index.html?hpt=hp_t1

So much for the unions protecting their jobs...

Unreal!

http://money.cnn.com/2012/11/16/news/companies/hostess-closing/index.html?hpt=hp_t1

So much for the unions protecting their jobs...

The company were "imposing" a new contract (maybe a 123 style contract) and the company made the decision to get out.  Very easy to blame workers  when management run something into the ground.

"The company is now controlled by a group of investment firms, including hedge funds Silver Point Capital and Monarch Alternative Capital."

Oh, sure ... it was the unions.

Unions serve a purpose, in some cases. In others, like this one, they are destructive. Pay cuts are a reality these days, for all workers, union or not. This union should have been more realistic about what they could accomplish for their members. If the money isn't there, it's not there.

"BCTGM members voted to strike Hostess after the company imposed cuts that included ending payments to the employees� pension plan while executives awarded themselves massive bonuses. Among the raises was a 300 percent raise (from approximately $750,000 to $2,550,000) for the then-CEO of Hostess. At least nine other top executives of the company also received massive pay raises, including one who received a pay increase from $500,000 to $900,000 and another received one that brought his salary from $375,000 to $656,256."
http://www.goiam.org/index.php/imail/latest/10787-hostess-ceo-falsely-blames-bakery-closures-on-strike

And from the wall street journal.
http://online.wsj.com/article/SB10001424052702304072004577323993512506050.html

"The company is now controlled by a group of investment firms, including hedge funds Silver Point Capital and Monarch Alternative Capital."

Oh, sure ... it was the unions.

Thank you 

What a shame. The bigger union agreed to the contract which was a salary cut of 8% which would have gradually been increased again over the next four years.
If that is true, I really don�t understand why the smaller union insisted on strikes with the intention of killing everyones jobs.

Unions are useful, but so much depends on the people at the top. Some are just as greedy and lazy as the investors they claim to fight. Some also want to rie up in the trade union ranks because it gives them added job protection and they are more difficult to fire.

In this kind of economic climate an 8% cut is just a drop in the ocean. I know many people who have had 35% cuts and are still desperatly hanging on to their jobs, working free overtime, hoping their company makes it. (I have family in Greece)

Some people just have no loyalty to their peers.

Ignorant unions are as bad as self serving employers. Good business owners will look well after their staff and good unions will consider business feasibility when negotiating on behalf of their employees.  Without synergy, both are doomed.

You do not kill the goose that lies the golden eggs and the goose must share its wealth or get digested. 

I did. I really don�t see why killing everyones job is a good "balance" to protest extremly high raises for the executives.

There are many other ways to protest, including suing the managers directly. A smart lawyer would have surely come up with something.

If the bigger union agreed to the cuts, then clearly there were 6700 people who wanted to keep their jobs.

Too bad the other union leaders put whatever personal interest they had before the larger unions group who preferred to work.

This way everyone is out of a job.

It takes competent people on both sides and union members have the exact same greed as managers. They are all human, after all.

At least this is the way the data presented looks to me.

I wasn�t there, I don�t have the details, obviously.

But I really don�t believe any party in business is angelic and loving. This includes the stock artists, the agencies and the buyers.

Or anyone else in daily life who is happy to shop for the cheapest washing machine made with slave labour abroad, but then complains that manufacturing jobs are being outsourced to other countries.

Managers of large cooperations have huge legal liabilities and responsibility. They absolutly deserve extremly high wages if they run a place well. If it was so easy to be a manager - why are there not more successful businesses?

It is a very small group of people that is ready to take on  a multi million dollar liability risk. I certainly wouldn�t. And the best people will be incredibly expensive. After all, they usually already have millions and could just lie around on an island somewhere. But if everybody who can afford it stops running cooperations - what will happen to the jobs?

Do you really want a manager of a company with 40 000 employees to earn 50 000 dollars a year? Or 200 000? You will never get any good people for that money. If they end up in court they get huge fines, maybe several hundred million. And they might not actually be at fault, just very bad business luck, it can happen.

A "normal job" is usually very low legal risk. I.e., you get a salary proportional to your input.

After all you can decide to take the risk and keep qualifying yourself and move up the career ladder. You could go all out and start your own business.

USA is not a country like China or Russia or the rural parts of India where there is no legal protection and forced labour. It is a free country full of amazing opportunity.

Many "low wage" jobs are held by people only for a few years as an entry to the job market because they are young or it is a part time job while they go to school or raise their kids.

Many people combine "low wage" with an online job, like many of us in the stock world.

But it is not "inevitable" that you stay in a low wage job for life. People have choices. And now with the internet more choices than ever. A whole huge world market right at your fingertips. Free education and classes from online universities.

This doesn�t mean there shouldn�t be labour laws, minimum wage and law enforcement to protect the business that pay correctly against the black market.

And I absolutly believe in free high quality education and good healthcare like we have in Germany. (That is not free by the way, it is very expensive like everywhere)

But people who decide to do "low wage" jobs are really no victims. Not in my experience.

By the way, I have tried as an employer many times to work with people who had been unemployed longterm or came from complicated backgrounds. In the end my team pushed to take "normal people", because they were tired of picking up the slack.

I didn�t pay low wage either, but we did get a government add on for trying to bring people back to the job market.

My view of long term unemployed changed drastically with that experience. So did the view of everyone else in my team and they were mostly "simple workers", just one engineer.

So yes, it is true you absolutly cannot compare the jobs of a very low wage salary person with no education required and NO LEGAL RISK to a high risk, high stress, high liability job that needs years of experience.

Not comparable at all.

Managers of large cooperations have huge legal liabilities and responsibility. They absolutly deserve extremly high wages if they run a place well. If it was so easy to be a manager - why are there not more successful businesses?

It is a very small group of people that is ready to take on  a multi million dollar liability risk. I certainly wouldn�t. And the best people will be incredibly expensive. After all, they usually already have millions and could just lie around on an island somewhere. But if everybody who can afford it stops running cooperations - what will happen to the jobs?

Do you really want a manager of a company with 40 000 employees to earn 50 000 dollars a year? Or 200 000? You will never get any good people for that money. If they end up in court they get huge fines, maybe several hundred million. And they might not actually be at fault, just very bad business luck, it can happen.

A "normal job" is usually very low legal risk. I.e., you get a salary proportional to your input.

After all you can decide to take the risk and keep qualifying yourself and move up the career ladder. You could go all out and start your own business.

USA is not a country like China or Russia or the rural parts of India where there is no legal protection and forced labour. It is a free country full of amazing opportunity.

Many "low wage" jobs are held by people only for a few years as an entry to the job market because they are young or it is a part time job while they go to school or raise their kids.

Many people combine "low wage" with an online job, like many of us in the stock world.

But it is not "inevitable" that you stay in a low wage job for life. People have choices. And now with the internet more choices than ever. A whole huge world market right at your fingertips. Free education and classes from online universities.

This doesn�t mean there shouldn�t be labour laws, minimum wage and law enforcement to protect the business that pay correctly against the black market.

And I absolutly believe in free high quality education and good healthcare like we have in Germany. (That is not free by the way, it is very expensive like everywhere)

But people who decide to do "low wage" jobs are really no victims. Not in my experience.

By the way, I have tried as an employer many times to work with people who had been unemployed longterm or came from complicated backgrounds. In the end my team pushed to take "normal people", because they were tired of picking up the slack.

I didn�t pay low wage either, but we did get a government add on for trying to bring people back to the job market.

My view of long term unemployed changed drastically with that experience. So did the view of everyone else in my team and they were mostly "simple workers", just one engineer.

So yes, it is true you absolutly cannot compare the jobs of a very low wage salary person with no education required and NO LEGAL RISK to a high risk, high stress, high liability job that needs years of experience.

Not comparable at all.

You are completely misreading my post and responding to things NOBODY has said.  Who's talking about managers. Managers should be and are well compensated.  I never said otherwise. 

Maybe its different in Germany, or maybe you are just completely unaware of the worldwide corporate climate, but there is an epidemic of shafting workers in favor of multi million dollar salaries and bonuses for a very FEW people at the top of the corporate ladder.  I mean CEOs, CFOs, etc.  Not to mention vulture capital firms.  They skim all the value from companies, including employee pension funds, FYI, and either shut down the company or move overseas so they can have twelve year olds who work for .50/day doing jobs that used to pay a living wage to people with families. 

If you find that acceptable, then I don't know what else to say to you Jasmin. 

@Mantis, please tell me what you find to be a "ridiculous" pension for spending 30, 40 years or more working your a$$ off?  Be specific.  Don't just pull numbers out of thin air.  Personally, I don't know anyone who's living high on the hog off a pension, although I know a LOT of people who are living on modest ones.  I also don't know any working class people who can afford to retire at 50 (unless you are counting non-voluntary unemployment as "retirement"  ).  Lets be honest - the only people who can afford to retire 50 voluntarily are millionaires. 

As for healthcare, most of the world regards that as a human right. 

I live in a country with much stricter banking and company laws. What I read about the US is in my opinion a severe political problem that is endangering the whole economy, even ours. But as long as what these vulture capitalist do is legal, it won�t change. I sincerly hope you get MUCH STRICTER laws.

I am no fan of vulture capitalsm, it is not competitevly run business in my opinion. Same for all the poor people that got hooked on huge credits for their homes who obviously and very clearly would not be able to ever pay for that. For me this is fraud. And over here if a bank or organization sells you a credit by overpricing your home or by giving you wrong information they go to jail or are so heavily fined that it severly damages their business (and they stop doing it)

In Germany this kind of system does not exist (on your scale), so our housing market is very stable. But homes also just go up with inflation (not 20% a year) and you won�t get a credit to buy a home unless you have a significant downpayment.

So I sincerly hope your newly elected government takes up the fight with the money mafia.

But apart from that I strongly believe in believe in taking personal responsability. And also I have to accept the fact that many people in other countries work much harder than I do. They also want my quality of life and are very good in business. It means the quality of my life will go down unless I fight very, very hard to stay afloat. We already have this in the stock world were many talented artists live in countries with much lower daily life costs than what I have or they can hire a model for a fraction of what I would be paying. And they can afford assistants. Lots of them. But I still manage to compete. (until now...)

These jobs that are going overseas are also increasing the quality of life for many people there. India and China now have a rising Middle Class. We are beginning to benefit indirectly by selling them our cars and electronics (or stock images)

Even if you somehow removed all vulture capitalists and all corruption from the US economy you will probably still see a downspiraling economy, simply because other countries and people will be more competitive in the world market.

The world is very interconnected and very complicated. There are 9 billion people fighting for resources and income. It will not get easier in the future.

I understand that it would be great to retire peacefully after working hard for 40 years. But I doubt that my generation will see it happen. We will have a much harder old age than our parents. I expect to be working until I fall over, at least part time.

Healthcare is regarded as a human right, but it must be paid for. In Germany I pay taxes of nearly 40%, I also pay additional local taxes, I pay 700 euros a month for healthcare and I still have to pay for many procedures myself because they are not covered. I paid 4500 euros for laser eye surgery because my plan considered it "too experimental" and wouldn�t cover it, although I need good eyes as a photographer. But at least I was able to deduct the cost from my taxes as a work expense.

And even in Germany you can die because some super high quality treatment is not available on your health plan.

But I do get excellent roads, great education and loads of bureaucracy. If you like it, come here

The downside is higher unemployment than in the UK or US, where they pay a lot less benefits, unflexible job market because employers are scared to higher you.

Is it really better to live here? I don�t know. I think the US system is a lot more flexible. If I was younger and my family situation different, I would strongly consider moving there. Or Canada.

But yes, I do hope banking and finance laws change to remove the high risks in the US economy. Unfortunately with the national debt from all those wars and other things, I don�t envy the US administration or you as a voter and tax payer.


 

To starve becaue you parents couldn't provide to you an average or glamorous education and you have to work for pennies  maybe is not a "terrifying" legal risk, but certainly is another kind of risk.

I totally agree but if someone offers you a job where if things go wrong you have to pay 150 million dollars plus all the lawyers - what kind of salary would you ask for?

Obviously working low wage jobs is a risk. I would fight like hell to get out of a situation like that.

The union's intransigence was the final straw, but the company went bankrupt because of bad management and lack of innovation.  Their product line sucked and they did nothing to improve it or keep it current.  Wonder Bread originated in the 1920s and Twinkies in the 1930s.  When was the last time you had a Twinkie or gave one to your kids?  Yuck.  They were new and different 80 years ago but just don't cut it nowadays.  Management failed to keep the product line current and now wants to blame the unions for their own failures.  They could limp along when times were good, but the prolonged recession is weeding out those companies where the top managers are not deserving their high salaries.  They also had taken on way too much debt (sound familiar?).  For Hostess bankruptcy was inevitable, the only question was when.

Good post. The failures are indeed cross functional.