Hostess

This reddit comment on the Hostess situation is fascinating for the insight it presents on the relevant players. I haven’t done full due diligence to see if it’s fully accurate, but it seems so.

I have a lot of disdain both for modern management and labor unions. As I’ve declared many times before, I’m a complete disciple of John Bogle, and I completely agree with his assertion that modern corporate governance is fundamentally messed up, that it empowers management over ownership, and incentivizes managers to squeeze as much as they personally can without any real oversight. And whatever, I don’t begrudge anyone trying to get as much as they can get; it’s just galling when executives make cash grabs in failing companies in the midst of many rank-and-file employees making sacrifices or getting laid off. Just seems like a soulless thing to do, but so many executives of many failing companies seem to do it.

Labor unions suck too. I also support their right to get whatever they want, but they overreached, and it’s illogical to be intransigent about something that’s unsustainable. So I don’t have a ton of sympathy when companies go under because unions insist on something that’s unsustainable.

What’s interesting is that in the Hostess thing, there seem to be good guys on both sides. The old management seems to have been the typical selfish jerks. But the new CEO imposed a $1 salary on the top execs and (to my mind) a really labor-friendly plan (including part ownership and seats on the board) in exchange for pay and benefit cuts. And the largest union (the Teamsters) agreed to it. It’s just the stubbornness of the smaller union that destroyed it.

So this wasn’t the typical greedy execs, stubborn union thing. The old execs sucked. The smaller union is suicidally stubborn. But the bigger players – current management, Teamsters – seemed to do the right thing. Makes it especially sad it didn’t work out.