Twinkies probably weren’t going anywhere. The brand, along with Hostess’ other popular products, almost certainly would have been sold off to other companies. But Hostess, as a company, may not be over just yet. A federal judge reviewing the company’s bankruptcy filing is questioning why the union went on strike before going into mediation with the company, and is asking that both the company and the union take that step now:
WHITE PLAINS, N.Y. — Twinkies won’t die that easily after all.
Hostess Brands Inc. and its second largest union will go into mediation to try and resolve their differences, meaning the company won’t go out of business just yet. The news came Monday after Hostess moved to liquidate and sell off its assets in bankruptcy court citing a crippling strike last week.
The bankruptcy judge hearing the case said Monday that the parties haven’t gone through the critical step of mediation and asked the lawyer for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which has been on strike since Nov. 9, to ask his client, who wasn’t present, if the union would agree to participate. The judge noted that the bakery union, which represents about 30 percent of Hostess workers, went on strike after rejecting the company’s latest contract offer, even though it never filed an objection to it.
“Many people, myself included, have serious questions as to the logic behind this strike,” said Judge Robert Drain, who heard the case in the U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y. “Not to have gone through that step leaves a huge question mark in this case.”
The procedural complications that are mandated by law as a part of the labor/management negotiation process never cease to amaze me. It’s a simple relationship. The union negotiates with management to establish a compensation contract for which the union membership will provide their labor. If the union doesn’t like their contract they can strike. If management doesn’t like the contract they can lock the union out and hire replacement workers, except that under federal law the labor dispute is kept alive indefinitely.
Lockouts and strikes often carry on for years and years, which is ridiculous. If either side wants to walk away, why can’t they?
The unions carry on as though they have a right to the jobs. As though, if they can’t have the jobs at the compensation levels they’re demanding nobody can have their jobs. But that’s not how free labor markets operate. If someone else is willing to take those jobs at a lower compensation level why shouldn’t they have that opportunity? And why shouldn’t the company have the right to pick a lower-priced labor force if things don’t work out with the unions?
Of, if a business would rather close its doors than sign a contract with the union, shouldn’t that be their choice too?
The problem with labor unions is that they don’t want to operate in a competitive labor market. They want to run a protection racket wherein they get the jobs they want at the compensation levels they want or else the company goes out of business.