The real question should be

[Megansman]

The analogies stand.

Companies should be able to hire or promote the best qualified person for the job at the lowest wage they can get away with. That's how the world works. That's how you spend your money, that's how I spend my money, that's how I hired the guy to do my concrete work last month, unions skew that economic principle and there's a long history of now bankrupt companies with union workforces gone. I grew up in Michigan, I've seen it first hand. I live in California now, and people still talk about Kaiser Steel going belly up.

Take a peek at a recent Thomas Sowell column and let me know what you think.

Thomas Sowell: Killing The Goose

 

[Bagels]

What happened to Hostess was not a result of union greed, rather corporate greed and mismanagement in the face of changing market conditions. I never read in one article about Teamsters delivering specific to a product for Hostess. If that were the case I suspect it was due to each product being produced in a different bakery. If what you alleged is the case, once again, what managerial idiot negotiated that contract?

We all know that when a company is no longer profitable, they cannot support a work force, union or otherwise.

The article linked to above discusses that the Teamsters required Hostess to use different delivery trucks/drivers for different products.

Do you know what makes companies profitable or unprofitable? In very simplistic terms, profits = revenues - expenses. Although Hostess's revenues continued to fall, Hostess still recorded more than $2.5 billion in revenue last year. Do you know what Hostess's biggest expense was? Employee compensation. Sure, Hostess has been a poorly managed company, but the reason it's no longer existent today is because it's saddled with legacy costs its competitors are not, and cannot raise the price of its products to cover these costs.

Just like FedEx Ground has a near-20% profit margin. If FedEx so desired, it could heavily cut the price of its ground services and really put some hurt into UPS. Fortunately for UPS, FedEx is using its Ground profits to subsidize other poor-performing divisions.

 

[Bubblehead]

The analogies stand.

Companies should be able to hire or promote the best qualified person for the job at the lowest wage they can get away with. That's how the world works. That's how you spend your money, that's how I spend my money, that's how I hired the guy to do my concrete work last month, unions skew that economic principle and there's a long history of now bankrupt companies with union workforces gone. I grew up in Michigan, I've seen it first hand. I live in California now, and people still talk about Kaiser Steel going belly up.

Take a peek at a recent Thomas Sowell column and let me know what you think.

Thomas Sowell: Killing The Goose

The feudalistic society you strive for can only be found in the imaginations of Republicans attending political fund raiser dinners.

 

[Bubblehead]

The article linked to above discusses that the Teamsters required Hostess to use different delivery trucks/drivers for different products.

Do you know what makes companies profitable or unprofitable? In very simplistic terms, profits = revenues - expenses. Although Hostess's revenues continued to fall, Hostess still recorded more than $2.5 billion in revenue last year. Do you know what Hostess's biggest expense was? Employee compensation. Sure, Hostess has been a poorly managed company, but the reason it's no longer existent today is because it's saddled with legacy costs its competitors are not, and cannot raise the price of its products to cover these costs.

Just like FedEx Ground has a near-20% profit margin. If FedEx so desired, it could heavily cut the price of its ground services and really put some hurt into UPS. Fortunately for UPS, FedEx is using its Ground profits to subsidize other poor-performing divisions.

The Teamsters cannot require anybody to do anything that isn't bagained for in good faith via a collective bargaining agreement.
I read the "article", which is really an internet column as well as many other articles and columns.
This column was the only one that I read to make that assertion.
As I said in my other post, if that was indeed the case that Hostess agreed to deliver each product individually, who is to blame?
What maroon in management for Hostess agreed to that?
Wouldn't that be mismanagement at its finest?
Hostess's biggest expense was indeed employee compensation, which is not uncommon for most food service industries.
It's not uncommon for most industries period, although that number is dropping in the face of technological advancements in electronics, computers and robotics.

A company that was in a similar situation, for different reasons was YRC.
The Teamsters have been part of the solution to date in a difficult positon, negotiating necessary concessions, leaving the company solvant.
In the process many employees have been spared a trip to the unemployment line, and hopefully in the end will return to a prominent role in the transportation industry.

Lastly referencing FedEx is grossly unfair in light of their unfair advantage over UPS in still being under the blanketed protection of the Railway Labor Act instead of the National Labor Relations Act. It is this distinction that gives them an unfair advantage and any move to leverage a larger part of the market may very well get them reclassified. That is why they don't make the bold maneuver you suggested.

 

[texan]

The Teamsters cannot require anybody to do anything that isn't bagained for in good faith via a collective bargaining agreement.
I read the "article", which is really an internet column as well as many other articles and columns.
This column was the only one that I read to make that assertion.
As I said in my other post, if that was indeed the case that Hostess agreed to deliver each product individually, who is to blame?
What maroon in management for Hostess agreed to that?
Wouldn't that be mismanagement at its finest?
Hostess's biggest expense was indeed employee compensation, which is not uncommon for most food service industries.
It's not uncommon for most industries period, although that number is dropping in the face of technological advancements in electronics, computers and robotics.

A company that was in a similar situation, for different reasons was YRC.
The Teamsters have been part of the solution to date in a difficult positon, negotiating necessary concessions, leaving the company solvant.
In the process many employees have been spared a trip to the unemployment line, and hopefully in the end will return to a prominent role in the transportation industry.

Lastly referencing FedEx is grossly unfair in light of their unfair advantage over UPS in still being under
the blanketed protection of the Railway Labor Act instead of the National Labor Relations Act.

It is this distinction that gives them an unfair advantage and any move to leverage a larger part of the
market may very well get them reclassified.

That is why they don't make the bold maneuver you suggested.

Great Point.

After all these years, all these elections, Dem and Rep majorities, why has this not been solved?

FDX and UPS are the same as far as they way they move packages.

Air / Jets / Louisville / Worldport for NDA / 2nd Air / etc.

FDX / Jets / Memphis/ Express / FDX2DAY

Same purpose, same regs and rules need to apply.

 

[bbsam]

But Ground is already governed under the NLRA, just like UPS. Care to guess which Fedex opco is looking to gain the most VS UPS?

 

[Bagels]

I read the "article", which is really an internet column as well as many other articles and columns...

It's an article from the August 13 issue of Fortune Magazine.

This column was the only one that I read to make that assertion.

The article is from a reputable source. And many years ago, I worked at a grocery store and Hostess products were delivered by multiple drivers -- so I have no reason to question the claim.

As I said in my other post, if that was indeed the case that Hostess agreed to deliver each product individually, who is to blame? What maroon in management for Hostess agreed to that? Wouldn't that be mismanagement at its finest?

Or maybe it's an emblem of a company battling/giving in to a powerful unions? You know, like ones capable of shutting it down?

Hostess's biggest expense was indeed employee compensation, which is not uncommon for most food service industries.

Employee compensation was a much larger factor at Hostess than its competitors.

Lastly referencing FedEx is grossly unfair in light of their unfair advantage over UPS in still being under the blanketed protection of the Railway Labor Act instead of the National Labor Relations Act. It is this distinction that gives them an unfair advantage and any move to leverage a larger part of the market may very well get them reclassified. That is why they don't make the bold maneuver you suggested.

The reference is totally fair since FedEx Ground isn't governed by the RLA. The reason FedEx hasn't made such bold move is because status quo UPS is in a much stronger position to survive a brutal price war -- which could easily bankrupt FedEx if things went terribly wrong. But they may not be in that position in the near future, hence UPS's effort to push difficult-to-replace value-added services to its operation.

 

[Bubblehead]

It's an article from the August 13 issue of Fortune Magazine.

ok

The article is from a reputable source. And many years ago, I worked at a grocery store and Hostess products were delivered by multiple drivers -- so I have no reason to question the claim.

read more than one

Or maybe it's an emblem of a company battling/giving in to a powerful unions? You know, like ones capable of shutting it down?

Yea that's it.

Employee compensation was a much larger factor at Hostess than its competitors.

they had a nitch, a brand and failed to adapt. Poorly managed, no vision.


The reference is totally fair since FedEx Ground isn't governed by the RLA. The reason FedEx hasn't made such bold move is because status quo UPS is in a much stronger position to survive a brutal price war -- which could easily bankrupt FedEx if things went terribly wrong. But they may not be in that position in the near future, hence UPS's effort to push difficult-to-replace value-added services to its operation.

So you are telling me that FedEx employees in the Ground/Home Delivery division are covered by the NLRB?
How many are there considering the drivers are considered subcontractors?

 

[wayfair]

So you are telling me that FedEx employees in the Ground/Home Delivery division are covered by the NLRB?
How many are there considering the drivers are considered subcontractors?

and THEY pay people to drive for them...

 

[Bagels]

So you are telling me that FedEx employees in the Ground/Home Delivery division are covered by the NLRB? How many are there considering the drivers are considered subcontractors?

Yes, they are. The drivers may be considered subcontractors, but all of the insiders are employees of FedEx Ground. The Teamsters were nearly successful in organizing some of them not long ago... I forget the details, but it was a big deal at the time.

 

[sortaisle]

No matter which way you look at it...here's the thing. 1st - Hostess failed due to bad management. Yes they had hefty payrolls, but it's all negotiated in good faith. The fact that they came out of bankruptcy and needed another loan is sketchy to the extreme. The company knew they were going tits up probably before the last bargaining agreement so they negotiated that way. 2nd - as far as UPS and FedEx goes, UPS is just jealous that FedEx has a better model. If the government offered UPS to go on the Rail contract then they would take it in a New York minute.

 

[Bagels]

No matter which way you look at it...here's the thing. 1st - Hostess failed due to bad management. Yes they had hefty payrolls, but it's all negotiated in good faith. The fact that they came out of bankruptcy and needed another loan is sketchy to the extreme. The company knew they were going tits up probably before the last bargaining agreement so they negotiated that way. 2nd - as far as UPS and FedEx goes, UPS is just jealous that FedEx has a better model. If the government offered UPS to go on the Rail contract then they would take it in a New York minute.

Seriously? Hostess would still be active today if the bakers' union had agreed to compensation cuts. Instead, the bakers' union sold its production workers some fantasy in which they could easily get another high paying (in relative to the last offer, which I outlined earlier) job even if Hostess went bust. Dream on -- these are unskilled, run-of-the-mill employees who will soon be competing for minimum wage jobs.

On a personal level, I think it's disappointing that the American middle class is gradually disappearing, as labor movement continues to disintegrate. But on a rational level, I recognize that businesses are always seeking to lower cost; if I were a Hostess employee, and I knew my company was getting crushed by competition with lower cost structure, I'd be open to taking a deep pay cut - as long as my pay would remain above what I could otherwise get on the job market. Instead, Hostess employees will be milking government benefits & maxing out their credit cards on a path toward personal bankruptcy while they refuse to believe their "skills" are worth less than they were making several years ago due to a CBA.