Economics 101: Hostess arises from the ashes, and goes non-union

At THE FIRST STREET JOURNAL, we paid some attention to the demise of Hostess Brands. Now comes this, from Sister Toldjah:

New maker of Twinkies: Non-union workers will be used to restart plants

Posted by: ST on April 24, 2013 at 7:03 pm

Let the OUTRAGE!!!!!!! begin:

The company that bought the Twinkie, HoHo and Ding Dong brands out of bankruptcy is gearing up to reopen plants and hire workers, but it won’t be using union labor.

Hostess Brands LLC—Metropoulos & Co. and Apollo Global Management LLC’s APO -2.11% new incarnation of the baking company that liquidated in Chapter 11—is reopening four bakeries in the next eight to 10 weeks, aiming to get Twinkie-deprived consumers the classic snack cake by mid-July.

Chief Executive C. Dean Metropoulos said the company will pump $60 million in capital investments into the plants between now and September and aims to hire at least 1,500 workers. But they won’t be represented by unions, including the one whose nationwide strike sparked the 86-year-old company’s decision to shut down in November.

“We do not expect to be involved in the union going forward,” Mr. Metropoulos said in an interview Wednesday.

More at Sis’ original.

We have noted, many times, that:

A union in a private sector company has a responsibility to balance its demands with the economic realities required to keep the company in business. If the union somehow forces its demands to the point at which the company cannot remain profitable and competitive, the company goes out of business and the unionized employees lose their jobs. That is the ultimate discipline of the private sector, and the unions know this, even if they don’t always manage to get the balance correct.

Local 372-B of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union forgot that simple economic fact, and forced Hostess Brands Inc. into bankruptcy, and shut down the company. In striking for more, they wound up with nothing. A foolish choice, but it was their choice. Unfortunately, they took the jobs of the Teamsters Union local which had agreed to help Hostess stay in business along with their own.

Now, the new investors are planning to restart the business, but to do so with non-union labor. The former employees can always apply for the new jobs, but if the new investors are smart — and they didn’t get to be rich by being stupid — they will cross-check each application with the names of the previous employees, and every match will get tossed in the garbage can; why bring back the malcontents who shut down Hostess in the first place?

Of course, once Hostess is back up and running, current law absolutely allows the employees to either join an existing union or organize one of their own, and it’s very probable that Local 372-B of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union will try to get that done. But the new employees will also be very aware that it was Local 372-B’s actions which got the last unionized workforce unemployed, and might be just a little bit leery of going down that path.

By being stupid, one local hurt unionized employees everywhere. One wonders if any lessons were learned.

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