It has been rather fascinating to watch the liquidation of Hostess, which is claimed by the company to be directly caused by their unions' refusal to negotiate lower salaries, higher employee contributions to health insurance, and reduced pension benefits.
Sure, it is most likely true that the failure of the company to get those concessions from their unions pushed them over the edge. But I'd say that ultimately it wasn't the union that was responsible for Hostess' demise. It was Hostess' management team.
All the same, I found it a bit puzzling that the union chose unemployment for their members over concessions that would have kept them employed.
There's a consistent theme in the business world today. Globalization means that non-union companies, especially those operating in the far east, can produce goods much more cheaply than their US-based unionized competitors. So eventually, unless the US company can innovate proprietary technologies or processes that lower their costs in a way that offsets their fixed labor expenses, they will eventually have to close their US-based operations. Bankruptcy or moving operations offshore become companies' only available options.
So Hostess could have closed their plants, including the local plant here in Columbus, and open new plants in China or Taiwan. Probably not Mexico, because US companies tried Mexico back in the 90's and mostly had to rethink the decision because of the excessive corruption in the Mexican government that makes it nearly impossible to do business there.
One argument that may hold some water is that the union workers at Hostess should be grateful that the company tried so hard to keep their operations running here in the US, they ended up being bankrupted by lower-cost competitors. So their union workers kept their jobs much longer than most of their counterparts in other US-based manufacturing businesses.
Strikers picketing outside the Columbus plant were interviewed for The Republic. They seemed to think the company's threats of business closure were somehow just negotiating tactics. Even after the liquidation of the company was announced, the picketers kept at it for a few more days. Were they hoping somehow the company would suddenly announce, "OK, we were just kidding. Come back and negotiate with us so you can get back to work."
Now jobless union folks are griping about the size of the incentive bonuses being paid to Hostess managers that are staying on to help facilitate the sale and liquidation of company assets. That's a common practice, and while understandable that the bonuses seem excessive to $10-an-hour production workers, there's really nothing untoward happening there.
For years, whenever I walked past the Hostess rack in convenience stores I would marvel at their high prices. Usually there's a Little Debbie rack in the same store, where near-equivalent bakery snacks are priced at about half the Hostess offering. Unless one is addicted to Twinkies or Ho-Ho's, I can't figure out why they wouldn't just pick up the much cheaper Cloud Cakes or Swiss Rolls. That alone was enough evidence for me that Hostess' days had to be numbered.
So the bottom line for Hostess is that their management team failed to define and execute a strategy that would have kept the company competitive. But since the most likely result of such a strategy would have been to close the union plants and open replacement plants in places they didn't have to deal with unions, I can't envision a scenario that would have kept those folks employed without having to sacrifice their cadillac health plans or generous defined benefit pensions.
My take on unionism is perhaps a bit different from the typical Conservative Republican. They seem to despise unions, and view them as communist organizations bent on driving their employers out of business. I've worked for companies where I've heard management folks actually say out loud that if a union ever took over in their company they would lock the doors the very next day. Some business owners truly believe that by operating their business they are serving their communities and the workers they employ, so they are shocked and insulted when their workers choose to unionize.
I've had the fortunate opportunity to work inside hundreds of companies. Lately none of them have been unionized, as unions are mostly gone from everywhere except government and the big automakers.
Union shops are mostly crazy. The most visible craziness is found in the ridiculous work rules. They're so restrictive that companies have to get very creative just to get the job done. I have an old story about getting a light bulb replaced that I think is one of the best illustrations of the insanity of some union work rules.
Non-Union shops can at times be unfair or almost abusive to their employees. But even though I observe maltreatment of nonunion employees on occasion, they're generally the exception and not the rule.
Dad's story about how the union saved him from a terribly unfair abuse in his very first teaching job is a nice anecdote in favor of unionism. He got his public passenger license so he could earn extra money driving a school bus. But the school superintendent declared that while he would be assigned a bus route, he would not receive any compensation for it, as it would be considered just a part of his teaching responsibilities. Well, the union stepped in and forced the superintendent to pay him normal school bus driver wages for the additional job.
I also worked in a small cabinet manufacturer that was a union shop, but it was called a "House Union". The union was formed and organized by the company's management, and the plant General Manager actually led all the union meetings and set the agenda. Apparently it was a very effective strategy that protected the company from outside union organizers but gave the company a very compliant union.
My direct experiences lead me to these conclusions:
Right-to-Work: Support
Wisconsin's restrictions on the right of government unions to negotiate wages: Support
Card Check: Oppose
The bottom line for me is that I support the concept of employees banding together for the purpose of negotiating favorable compensation and working conditions. Managers who carp and complain about the union driving them into bankruptcy are a bit disingenuous, because in the end they agreed to the terms of the contract. It's the company's responsibility to negotiate contracts that do not put their survival at risk.
I also find the mob infiltration into the major unions unacceptable, and can't believe that law enforcement hasn't been able to clean up that corruption. I also think too many unions are built and managed for the benefit of those mobsters, rather than the members who are supposed to control their own union. Finally, it's ridiculous that many unions funnel far too much of union dues money into Democrat politicians' campaigns. If they want to influence legislation, they should do so through a PAC, not providing the primary financing for every Democrat candidate's campaign.
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