The upstream/downstream of union greed and business. Hostess and the other victims.

When I heard that Hostess was going under I gritted my teeth.  I’ve been a fan of the old school world of treats like Twinkies all my life. I don’t eat a bunch, but every once in a while I get a hankering for them.  But that wasn’t why I did it.  I knew that eighteen thousand people who had jobs, lives, families, car payments, medical bills and a huge impact on other people within their circle had just been laid off in an economy shedding jobs like dead skin from a zombie.  That is what I see every time I observe our economy- the walking dead.  And it is painful.

That is why I supported Romney, even though he is a big government establishment Republican.  He may have been a big government guy, (something I dislike) but I’ve come to accept the reality the only way off the big government concept is when it collapses under its own weight.  It dies- we live, sort of thing.   However, UNTIL then we are stuck with a system that functions with limited options.  Romney really understands this and is more than capable of dealing with it. Obama either understands and doesn’t care or simply cannot grasp economic physics, much like the union members at Hostess.

In a number of stories there is information that the Teamster union was onboard with the draconian cuts needed to keep the huge company afloat.  However, the bakers’ union thought they were getting lied to and voice voted to go on strike, even after being warned doing so would close ALL of the company.  They did, it did, they are out of a job today.

Failing to persuade striking employees to return to work, Hostess Brands disclosed plans on Friday to liquidate its assets and lay off most of its 18,500 workers, bringing the 82-year-old maker of Wonder Bread and Twinkies to the end of its line.

The painful decision to wind down the Irving, Texas.-based private company follows a nationwide strike that Hostess said severely constrained its operations.

Hostess said delivery of its products, which include Ding Dongs and CupCakes, will continue and its retail stores will keep their lights on for several days to sell already-baked products.

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Hostess CEO Gregory Rayburn said in a statement.

As a result of the liquidation, Hostess said it will “move promptly” to lay off “most” of its 18,500 employees and focus on “selling its assets to the highest bidders.”

The company will now be forced to close its 33 bakeries, 565 distribution centers, 5,500 delivery routes and 570 bakery outlet stores throughout the U.S.

The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union pushed back against the Rayburn blaming the liquidation on the unions.

“The truth is that Hostess workers and their Union have absolutely no responsibility for the failure of this company. That responsibility rests squarely on the shoulders of the company’s decision makers,” Frank Hurt, BCTGM International Union President, said in a separate statement released on Wednesday.

Wow…the stupidity of people sometimes. But it is the mindset of unions that they can continue to shear the sheep without consequences because that has always been the case. I read one report where the judge, the Teamster union reps and the company all agreed that Hostess was on its last legs.  Nobody was lying. Apparently, the company was struggling for awhile, and part of the struggle was the carrying the weight of union demands.  Now it collapsed, like the proverbial camel, and people are wondering what happened.

What happened is economic physics. The same stuff that is crashing other companies all around us.  Romney is an expert in understanding economic physics.  He made a living being able to “see” the experiment and the potential outcomes and deciding whether or not he should get involved.  That’s a talent.  One Obama does not possess.

What bothers me with all of this is the upstream/downstream trickle down effect of this.  Liberals HATE the term of trickle down, but in reality we see it all the time and here is a perfect example, in almost real time, of what a trickle down effect looks like. From Gateway and Jim’s view:

 Members of the Bakers Union left Tennessee children high and dry and without bread.
Hostess went out of business after union goons went on strike forcing the company to shut its doors.

The biggest impact was in east and west Tennessee. An estimated 300 workers lost their jobs at bakeries in Knoxville and Memphis.

For workers at the distribution center on Charlotte Avenue in Nashville, the news hit hard.

“You never think a big business like this is going to go down,” said delivery driver Jon Rayburn. “You’re like, ‘Well, they’ve been around forever. They’ll be around forever.’”

…At Metro Nashville Public Schools nutrition services officials are working to find another bread vendor. Hostess supplied loaves of bread, buns and other bread products to schools.

“We were notified earlier this afternoon that the bakery was no longer going to be in service as of 5 p.m. today,” Director of Nutrition Services Spencer Taylor said. “What my staff and I have been doing is putting out feelers to other regional providers in the area.”

Bread and grains are a federally required part of the 55,000 meals Metro Nashville Schools serve in its schools.

“The contingency plan right now is to find someone who can actually handle our volume,” Taylor said. “We will be getting ready to put out bids for more permanent services to carry us through the school year.”

Taylor said the district’s cafeterias have enough bread for meals through next week. The school week is only three days because of the Thanksgiving holiday.

I’m going to disagree with Jim on this in part.  The company was going under, probably for a number of reasons INCLUDING the huge push by Leftists who want us out of their bedroom but want into our kitchen by demanding they have the right to tell us what to eat.  Remember, Bloomberg and his people would outlaw Twinkes and make the producers of the treat criminals.  So, when the demand goes down and the production costs stay the same, your company is in trouble.  This is an example of upstream economic impact.  Do you think the people making political hay out of telling us what foods we can eat, banning certain foods, eliminating certain treats from public places like schools, convincing everybody foods like a Twinke will cause a heart attack or cancer, ever think about Mr. Rayburn in Tennessee and his family?

Nope, not for a second. But they’ll bitch to hell and high water about the greed of corporate America.  I’d like to educate them on their folly, but that would fall under the “trying to teach a pig to sing”warning.

On the downstream side of the impact think about the people who make a living from the money generated by the workers at the plants; food, energy, fuel, clothing, discretionary spending like movies, gifts, eating out, etc. all impacted by the loss of wages at the plants.  More, think about the people directly impacted by the loss of Hostess, including schools and kids.

This is trickle down economics.  A “rich” company provides wages to workers for a function they perform. Those people take the wages and spends them in their local economy, which in turns generates revenue for the people in that local economy, which in turn allows that third level to spend money for their needs.  Cut off the top of that pyramid and it all stops.

Did the union members ever think about what their actions would do their their own communities? I’m betting not.

Hey, anyone near Nancy Pelosi? Maybe you can grab her and bring her over to the computer to read this. Just saying.   No, she’s not interested?  Well, I guess it is that pig singing thing again.

I wish Hostess, it’s people, it’s workers well. Maybe something will change. But I doubt it and you can add this company to the growing number of companies on that rotting pile of zombie flesh shed by our economy.

Someday, you’ll wish you have voted differently.  Trust me.

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