Goodbye Twinkies?

[Turtle]

Too many people can be easily led by union cheerleaders who sensationalize what is superficial and not the whole truth. It's more fun that way.

In the Hostess dispute, how the union invests its dues is not even an issue. Nor is what employees are paying for. At issue is what the company is paying into the pension fund and how the fund covers non-Hostess employees.

 

[davekc]

I don't know if I have the right understanding but what I read was they were investing pension funds for their employees but were being asked to make those same contributions for retirees on behalf of companies that had previously closed. That was the reason they are stating that their pension costs were so high.
If they provided pension costs just for their own, they would be in line with other businesses.

 

[Turtle]

I don't know if I have the right understanding but what I read was they were investing pension funds for their employees but were being asked to make those same contributions for retirees on behalf of companies that had previously closed. That was the reason they are stating that their pension costs were so high.
If they provided pension costs just for their own, they would be in line with other businesses.

That's pretty much it. Hostess was making pension contributions for Hostess employees, then the union demanded, and got, even more contributions to take care of union members who worked at other companies who went out of business and thus had no more contributions to those pensions. It was a demand that was enabled by, wait for it..... Congress, who is 1980 enacted a law that created the multi-employer pension plans. It's kind of like Social Security Lite, only just for union workers. There are several, but PBGC (Pension Benefit Guaranty Corporation - an independent agency of the United States government) is the big one. Basically, Hostess has hundreds of labor contracts, and a few of them drug them into the multi-employer pension plans. They pay about $100 million a year into it. They don't want to do that anymore.

 

[LisaLouHoo]

So it is like when GM had DuPont and PPG, et al under their wing and they were privy to same bennies. Not like now with the investments, which did upset the ignorant and drama seekers until the pictures were drawn slowly for them in crayon...

Hostess probably can't spin these things off now because of the pension laws that had to go into place after the Enron debacle...which had nothing to do with unions, but rather corporate greed. As a side note, because of the post-Enron pension guarantee laws, investment into multi-faceted holding companies became more prevalent.

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