Bankers, not bakers, killed Hostess

Over the last decade Hostess has been mismanaged by bankers, not bakers. Private equity firms “Bainstyle vulture capitalists,” as AFL-CIO President Richard Trumka explained in an article for the Daily Kos, “invested in Hostess to profit not by making quality products, but by bleeding the company of every dollar before discarding it.” The company has filed for bankruptcy twice in the last 10 years, forcing contract concessions from the nearly 15,000 unionized employees. Hostess has had six different CEOs since 2004. With the current CEO, Gregory Rayburn, receiving a 300 percent increase in compensation. The management firm raised the pay of the top nine executives between 35 to 80 percent all while asking employees to take cuts of more than 30 percent. In addition, executives overseeing liquidation of the company will receive 1.75 million in bonuses. The company also stopped paying into the Multi Employer Pension Plan (MEPP)—which is reportedly underfunded by as much as $2 billion. The truth is that the Bakery Workers union, along with the other unions representing workers at Hostess, gave the company more than $110 million in annual concessions to help it restructure after its 2004 Chapter 11 bankruptcy filing. According to documents filed by BCTGM with the bankruptcy court—concessions were given in exchange for assurances by the company that it would restructure itself in a manner that would provide a real plan for establishing a stable business with secure jobs for thousands of employees. The November 19, 2012 documents, filed by the BCTGM states: As part of the negotiations during the first bankruptcy filing the company said that they would reinvest the monies...

Look for the Union Label

The Union Label Department develops this poster identifying the many AFL-CIO affiliated unions. Many of these union labels have a long and storied history. Since late 2012 the Union Label Department has been featuring information on modern day union labels in our bimonthly newsletter, the Label Letter. You can learn about some of these labels in our “Spotlight the Label” features posted online and in our newsletter. The Union Label The first genuine union labels in America began cropping up in the mid 19th Century as early craft unions began what would become a decades-long struggle for a shorter workweek. In 1869, the Carpenters Union launched an 8-hour day campaign with the union’s emblem affixed to any mill products from companies that had agreed to the 8-hour day. Cigar Makers, in 1874 adopted a label to differentiate their product, ironically, combating an influx of made-in-China cigars. Advertisements accompanying that campaign reflect a poor choice of words from a 20th century point of view, prominently noting that the union’s cigars were then crafted by “White Men.” In 1881, along with the birth of the American Federation of Labor came the clasped hands symbol that has lasted, with only minor alterations, until today. These and other facts about the label movement are thoroughly discussed in “Signs of Unity: Stories and Symbols of the American Labor Movement,” a book by Kim Munson. As Ms. Munson explains in her research “the symbols and messages contained in these logos have changed due to union mergers, economic transformations, changes in the political climate, and cultural/societal trends in general.” Our goal is to educate the general...

Largest banks still acting with impunity

Corporations are people, my friend,” said candidate Mitt Romney. Just try to find a jail cell big enough to hold a corporation. “Too big to fail” has allowed the United States’ biggest banks to act without restraint. Now this idea has grown to “too big to indict.” Alan Greenspan, former Fed chair, has said, “If they’re too big to fail, they’re too big.” What can America do to restrain these big banks? The Justice Dept. has levied fines against banks like HSBC—which was just found to have been laundering millions for Mexican and Columbian drug cartels—but the settlements are equivalent to just weeks of profit for the banks. Other banks have also paid fines for violating U.S. banking rules: Credit Suisse, $536 million; Barclays, $298 million; Lloyd’s, $350 million; ING, $619 million; and the Royal Bank of Scotland, $500 million. Not one executive, not one employee of these institutions, was criminally convicted. According to the Justice Dept., criminal convictions at HSBC would have led the bank to collapse and thus cause the fragile financial system to collapse as well. According to David Cardona, a former deputy assistant director at the FBI, securing a criminal prosecution is too difficult. Civil penalties carry a lower burden of proof. Many legal experts have said the U.S. government faces an uphill battle in prosecuting financial-industry executives. Criminal intent is especially hard to prove in complex financial cases, because prosecutors must convince jurors, beyond a reasonable doubt, that a fraud was intentional. “You can do real time in jail in America for all kinds of ridiculous offenses,” said Matt Taibbi, financial reporter for Rolling...

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