Twinkie Tale
Published: November 26th, 2012
By: Tom Morgan

Twinkie Tale

By the time this appears, the Hostess Twinkies strike may be settled. Or… it will not be settled. And the company may be kaput.

In case you have missed it, the Twinkies story is simple. The company cannot afford to pay its workers all the pay and benefits the unions have negotiated. They cannot afford to pay the money and benefits the unions demand.

The company has been through Chapter 11. Twice in ten years. It said it cannot pay the medical and pension costs as demanded by unions. Those costs have been climbing. Sounds a bit like the auto companies, eh?

Over 18,000 workers will be out of their jobs. Thirty-three factories will close. Also losing out will be delivery drivers, companies that provide services to the factories, etc.

The head of the AFL-CIO blamed management, of course. He blamed crony capitalism. Although there was zero evidence of such. He suggested the owners would profit by the collapse. Right.

You may love unions. You may hate them. Wherever you stand, a few items ought to be obvious. One is that the company could not afford the union’s demands.

Call the contract unfair. Call it slavery. Call it too generous. You know, it really does not matter. The reality – the reality – is that the company could not afford the union’s demands. Basically, it said to workers: If you want to work here, here is what we can afford. If you demand more, we close.

They demanded more. Twinkies closed. It was a matter of the union standing strong, standing stubborn. The union called the company’s bluff. The company had no bluff. It said it had two pair. When the union called the bluff, the company showed its two pair.

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