Hostess employees unhappy with wage cuts

The snack cake company returns with fewer factories, reduced employee pay, raided pensions and no unions.

By Jason Notte Jul 9, 2013 2:42PM
Credit: © Philip A. Dwyer/Bellingham Herald/MCT via Getty Images
Caption: Andy Wagar loads Twinkies, Ho-Hos and cupcakes into a van outside the Wonder Bakery Thrift Shop in Bellingham, Washington, on Friday, November 16, 2012
 Oh, were you terribly upset when Twinkies went away and then came back frozen for increased longevity? We're sure Hostess employees would pass you a crying towel if they weren't cut from the company benefits package.


While the Ho Ho-inhaling masses and new owners Apollo Global Management (APO) and C. Dean Metropoulos & Co. are terribly excited for the return of the snack cakes that disappeared from the American menu nearly eight months ago amid labor turmoil, The Wall Street Journal notes that the workers producing those treats have little reason to share in the glee.


The Journal shared the story of Craig Davis, a former forklift operator at a Hostess cake plant in Emporia, Kan., who was making more than $16 an hour before his plant closed in November, but was invited back at $11 an hour. Davis, who put in 22 years at his old job, considered the rebuilt baking company's offer "a slap in the face" and "didn't see the point" in returning.


Wages are only one of the big changes former Hostess workers have seen when returning to plants that are trying to produce enough Twinkies and Sno Balls for a July 15 return to shelves. For one, there are now only four plants dedicated to Hostess Brands where there were once 11. The company has also shuttered its 600 bakery-operated thrift stores in favor of broader convenience-store distribution.


Also, the 79% of Hostess workers that were part of the Bakery, Confectionery, Tobacco and Grain Millers International Union has now dwindled to 0%. C. Dean Metropoulos, chief executive and co-owner of the new Hostess, says his company has "put together an excellent and competitive wage and benefits program for our employees."


That definition of "excellent" has changed a bit since November, when Hostess' union workers went on strike in response to a new contract imposed on them by a bankruptcy court. The bakers weren't happy that the company was ending pension contributions and only grew more irate when Hostess later admitted it diverted pension money to fund company operations.


Hostess workers who belonged to other unions -- like delivery drivers who belonged to the International Brotherhood of Teamsters -- blamed the bakers' union for taking their jobs down as well. Under the restructured company, Hostess route drivers who once delivered directly to stores have been replaced by truckers who deliver to third-party distribution warehouses.


Still, with former employee pensions reduced from $1,800 a month to $500, you'll have to pardon both former and current Hostess workers for lacking the same sweet nostalgia for Hostess shared by the new owners and their customers.


More on moneyNOW

206Comments
Jul 9, 2013 3:01PM
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Before we get the "union killed the company" ignoramuses commenting, please note that the bakers' union took a $48K to $35K annual salary cut.  The company then wanted them to take another cut to $24K ($12/hr, probably LESS than they're making now) while the CEO's salary was raised from $750,000 to $2,250,000 and a dozen other top dogs had huge raised including on VP from $500,000 to $940,000.
Jul 9, 2013 3:36PM
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How is it that a company can use any retirement funds for operations? How is it that these funds aren't in a separate, untouchable account?
Jul 9, 2013 3:25PM
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i will never purchase another hostess product again.  if nobody else does either, these corporate money-grubbing bastards will die on the vine, and not be hired any place else, because they put the company in the toilet.  sure, the people who actually provide the labor are going to be hurt also. but realistically, how much further do they have to fall?  they are already living under the poverty level. but because they are the ones who actually produce something, they will eventually survive, hopefully working for a company with a social conscience.  one that will pay it's employees a living wage with benefits, so that we taxpayers are not forced to subsidize their corporate greed with food stamps and health benefits.  something has got to give.  the working class in america has been reduced to basically a low-income section of our society with no way to move out of it, because they can't afford to invest, they can't afford to save, they can't afford to educate themselves or their kids. and they certainly can't afford to get sick. capitalism is still the best form of money-making on this planet, but it must be tempered with an honest dose of corporate responsibility to it's workers and ultimately it's shareholders.  
Jul 9, 2013 4:10PM
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My father, God rest his soul, worked for Wonder Bread/Hostess for 36-years.  Years ago, even as a life-long member of the Teamsters Union, he was telling us kids about the non-sense the union was doing to the company.  He was a company man first, and a union member second.  Smart guy!  He gave us examples of how the loaders of the trucks could only load either the bread or the Hostess items, even though it was on the same dock, and that the union forced the company to hire many more employees to honor the union contracts.  He spoke of many such union demands that in time sucked the life out of the company.  I completely understand the union mentality and the good and bad that comes with it.  In the end, the company has to survive or there are no jobs.  Dad would be disturbed to hear how these demands took down the company but he probably would say, "Told you so!".
Jul 9, 2013 4:21PM
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Why weren't the execs' salaries cut instead?!  If a company needs to cut costs, theirs should be the first to get cut.   A worker making $50K a year, as an example, needs every penny of that far more than does an executive making $1M.
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So... why is it no one went to jail when they took the contractual pension money and used it to fund company operations?  The management and owners who were aware of this deed should be convicted and in prison.
So many of the owners and management are doing this to people in the United States, using pension funds and getting away with it, that it should be a high priority agenda item for state and federal Congressional action.
Why isn't it?
Jul 9, 2013 4:01PM
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Greed on both sides led to this stupid conclusion. While it is easy to blame the company----looking at the part the unions played in creating idiotic rules and costs cannot be ignored by those fairly evaluating the situation.
Jul 9, 2013 3:47PM
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I also will NEVER buy another Hostess product again....and I was addicted to Zingers! So tired of company's that think people can survive in this country, in this day and age, on $9-$10 an hour. The income inequality between most of us and the 1% is going to lead to a revolution someday....
Jul 9, 2013 4:33PM
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If I remember right former Hostess workers were told if they didn't agree to the offer on the table it would mean bankruptcy. That is what happened. Now they pay and pension is much worse. Not a big surprise is it?
Jul 9, 2013 4:33PM
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There will be a time when the "union haters" will be wishing for their return. It won't be long and most people will be lucky to make $9.00 an hour. The big wigs will be making millions and we'll have a return to the late 19th and early 20th century wages and no benefits. Middle class will have disappeared and low class and total poverty will be the norm. History repeats itself because we Americans have forgotten already. Many companies have laid off workers and given the rest pay cuts, but lined the pockets of management. This is the " New America' folks!
Jul 9, 2013 4:48PM
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Unions was a good thing when they first showed up. Over the years they lost what they were created for. Yes they are suppose to support the workers. But they are also suppose to work with the companies to find a mid point where both get what they need. True the Ceo taking such a big pay raise is a huge no no. But on the same token isnt it also bad that it takes 2 or more employees to do the job of only 1? Not going to call out which automotive company this was but this is a huge example of what i am talking about. I was an over the road truck driver and making a delivery to a automotive factory. The Forklift driver unloading my truck accidently caused a pallet to fall from a stack of pallets. He then informed me it would take around about 2 hours for him to call who he is suppose to by contract to have someone to come pick that pallet back up and put it back on the stack of other empty pallets. then informed me he needed to go to bathroom. which time i just simply put the pallet back on top of the other pallets. noone saw me put it there but it got me out of the dock door 2 hours faster because i didnt have to wait for union employee to do what i did in about 1 minute. true there is limits set for reasons but come on your unloading a truck and cant get off a forklift to restack a pallet. to me this is all the same job not different jobs. he still had to get off forklift to count what he took off the truck and sign the papers so i could leave. there is your problem with unions. jobs change over the years but their contracts dont allow for the jobs to become reclassified. if unions want to survive you must learn to change to the changing times. your contracts cant be so set in stone that it hurts everyone around them except the union workers. because i promise you there are 1000 times more non union than union employees. Change or become fossils.
Jul 9, 2013 3:43PM
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I have so many comments, but they would all be pointless.  This is just a very sad story. . .

Jul 9, 2013 4:42PM
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Wow, he turned down $11 an hour, when most of America is making $7 and change at minimum wage. Yes, it was lower, hey guys, it is a different company, Hostess sold the goodies, remember? I would love to make his wage instead of mine. Work is work and someone has to do it, so swallow your pride and feed your own family, just like I do.
Jul 9, 2013 5:48PM
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Have not bought any Hostess products in years and do not intend to start buying them now.  Wages went down but I would guess prices went up!!!
Jul 9, 2013 5:05PM
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They will fill the jobs with illegals, this is only the beginning
Jul 9, 2013 4:35PM
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Yet another story of how the unions screwed themselves, or at least their workers. As long as these companies aren't breaking any laws, its THEIR business to run as they want. if the workers don't like the wages benefit packages, they should seek work elsewhere. Who the hell are the unions to say how much the companies should pay?!        
Jul 9, 2013 6:32PM
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The management that ran the company into the ground walked away with millions in compensation. Its a crime that the very people responsible for running the company into bankruptcy get the most out of it and the workers get the shaft. If managers run a company into bankruptcy they should share the pain, and not profit from it.   
Jul 9, 2013 6:19PM
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I'd just as soon cut my wrist than ever buy a Hostess product again.....people on here saying" you should just be happy you have a job" are clueless. Millions of families have been torn apart by the economic downturn and millions more will follow. You can not support a family of 2 let alone 3 or 4 on 11 dollars an hour in this country. Republicans/Conservatives yap on the importance of Religion,Family and Citizenship at the same time supporting corporate America and their ultimate goal of controlling every dime and soon to be credit that you spend. Meanwhile Corporations were back making profits 2 years into the downturn ,and still 7 years later their are employees that have not seen a dime in the increase of their wages. This so called "land that I love" priorities have become a joke and the blue collar worker is the punch line.
Jul 9, 2013 5:57PM
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Everyone needs to stop whining about what Corporate executives make - If you want to make what they make, its simple - Come up with a product that no one else has, find someone who will loan you enough money (or use your own)  to build a factory, buy equipment , hire workers and hope that you are the one in a million that makes it and doesn't wind up bankrupt. It takes a different kind of person than what most of us are. Lets face it America has become a society that wants to sit on its **** and do as little as possible and get paid as much as possible for it. We live in a society where the government advertises food stamps while it looks to pass immigration bills that guarantee that more Americans will be put out of work and wages will get driven down even further. A government that punishes the producers and rewards the lazy. This country is doomed and there is no one out there willing to make the changes necessary to save it. Yes $11.00 and hour is not a lot but keep in mind the jobs are here and I'm sure Twinkies can be made in China for a lot less. Its not like they will go bad on the boat ride over !!!
Jul 9, 2013 4:54PM
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Union members you were duped. The irony is that Apollo Global Management is a big contributor of liberal candidates and causes. Look how fast they dumped the union when it benefit them. The next time you see Apollo as a campaign contributor vote the opposite way.

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