Maybe I am speaking a little more colloquially, but my point is that, if you accept the premise of a housing bubble, which nearly everyone does, you almost have to accept the premise of a wage bubble. Otherwise, where were people getting the income to pay the inflated mortgages on those houses? That was part of the problem....wages were not going up commensurate with mortgage payments, at least not future mortgage payments on ARM's. You only had to qualify on the teaser rate, sometimes you only had to qualify on the interest only payment. Think about it. If your premise were right, there would not have been a bubble in housing. Wages would have kept pace with higher payments associated with higher debt for higher home prices.
Unions or not, when the vultures start circling you're fucked... http://kavips.wordpress.com/2012/11/16/the-real-story-behind-hostess-twinkies-demise/
all these companies complain about pensions, but none of the reports show what they did with the money that was held back on every check for years to eventually pay that pension out,there seems to always be a public response that everyone was overpaid and it's the unions fault, companies are in business to profit ,unfortunately ,in any way possible,if unions and corporations and governments use the pension or social security funds set aside for future payments in the present for non related pension or social security reasons, they should be prosecuted,it's the same or worse than robbing a bank, that money doesnt belong to you , that;'s why taking it is a crime
Why would wages necessarily have kept up? If there are two bubbles, both don't necessarily grow at the same rate. Once the housing bubble burst, employers had leeway to lower wages and still retain employees.
----------------------------------------------------------------------------------- Hostess had sales of 2.5 billion in 2011 . Thats not bad for crappy pastery. LETS LOOK AT SOME FACTS Union work rules required that cake and bread products be delivered to a signal retail location by two seperate trucks and drivers. Drivers were not allowed to load their own vehicles. Bread loaders were not allowed to load cake. Cake loaders were not allowed to load bread. On most delivery routes another enployee had to stack the shelves. Hostess had 372 collective bargaining aggrements. The company had to maintain 80 different health and benefit plans,40 pension plans. and a mandated $31million increase in wages for 20012 Bakers were earning an average of $18 hour and were asked to take a 8% pay cut The result would have been $16.56 per hour Management negottiated consesions which the teamster agreed to but then never crossed the picket line and the strike went on. These were the conditions as quoted from (WSJ 12/17) Like the auto industry management is as much to blame as the unions .Their appeasing ways avoided strikes and kept the bonuses coming for them. Weak management lerdership and workers that were mislead by their unions also contributed to this perfect storm that gets repeated time and time again So there is adequate blame for both groups anyway where i live its TASTY CAKES Cheers john
not bad, nice reply, somebody right now is probably figuring out how to make Twinkies in China. The local grocery store where I live use to make all this crap under their own store brand name. You always knew without looking at price if you bought the store brand that was the cheapest. Then they got this idea of taking the exact same food, but putting it in a really fancy bottle or package, with black labels and gold letters. The workers may not survive, but I am not so sure we have heard the last from Twinkies. There is probabaly some law that even if most of it is made in China or Bangladesh, as long as you do one process in some country you can claim it was made there. TWINKIES, THE ORIGINAL DANISH TREAT
Congratulations to the Unions. You got what you wanted. Now, everyone go to the unemployment line. I'm sure there are quite a demand for bakers and clerks....with pensions, of course. People keep complaining about lack of manufacturing jobs in USA, but the truth is unionized workers is not competitive when we are in a global economy. Without major concessions or riddance of the union, manufacturing companies will be at a disadvantage...from cars to twinkies. Look for someone to buy the rights to Twinkies, open a manufacturing facility in Mexico, and be profitable. And USA loses another 18k jobs. How many companies can afford a shipping clerk making close t0 $50K with full benefits and pension? Seriously. Why does this guy act surprised that the company is in bankruptcy and asking for cutbacks? If this guy doesn't think his job is worth saving, then just quit and let someone else take that job. Don't kill the whole company where many others are willing to work given the current economy.
A FTT would be a hit to my margins, no question about it, but unless it was insanely high, it wouldn't turn my strategy unprofitable. I'm not a scalper.
Bakers were earning an average of $18 hour and were asked to take a 8% pay cut The result would have been $16.56 per hour -------------------------- The line would be a mile long for a $16 an hour job today with zero benefits. Probably many of those jobs you didn't even need a degree.
I don't know exactly what the people earn for cooking the potato chips, cheetos, etc., for Frito-Lay, but I do know it is well above $18 per hour, if I had to guess I would say in the 22 - 23 range out here on the west coast, and it varies by region. Frito Lay is a well managed company with almost no union members. Some of the OTR truckers unionized at a plant in northern California some years ago and they decertified the union in less than a year. Frito pays good wages and not only has innovative products, they innovate their processes as well. I don't know what the deal with Hostess was, as someone here mentioned earlier, they were not innovative and I have to admit I haven't heard of any new products coming from them. But I do know this, if management comes right out and says that they will liquidate the company if workers don't return to work, there was some bad blood between management, employees and the union. That's an extreme hard line that companies don't usually take during strike negotiations.