Labor Pains: Because Being in a Union can be Painful

Unions Killed my Ho Ho

Last Wednesday Hostess Brands Inc., maker of sweet snacks including Twinkies, Ho Hos and Ding Dongs, filed for Chapter 11 bankruptcy protection to settle its unsecured debts, primarily weighed down by its heavily unionized workforce.

Debts beholden for ingredients like flour, sweeteners and cocoa pale in comparison to the exorbitant amounts owed to union health and pension funds. The top unsecured creditor on the list is the Bakery & Confectionery Union & Industry International Pension Fund, owed $944.16 million. In fact, 16 of the top 40 unsecured claims belong to union benefit funds.

Hostess operates in 48 states and has approximately 19,000 unionized employees, 7,500 of which are represented by the Teamsters Union. Furthering Hostesses problems surviving in the market, the Company has 372 separate labor agreements, while most of its competitors are not unionized.

This is not Hostess’s first time dealing with bankruptcy. In 2004, the company formerly known as Interstate Bakeries went bankrupt and re-emerged as Hostess Brands in 2009.

Categories: Center for Union FactsHumorNews