In a standard move, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union refused to grant concessions to save Hostess from bankruptcy liquidation two years ago, fearing it would drive down wages and benefits across the industry. Since then, the Company became non-union, dropped brands beyond snack cakes, shed 18,000 jobs, outsourced delivery, operates just 4 of its previous 13 facilities – was 5 until the union snuck into a Chicago plant prompting that plant to be shut down - and has seen its value grow by over $1 billion.
Hostess’s main competitor, Entenmann’s, now faces the same fate as it’s locked in negotiations with its New York City area union delivery drivers. The Company seeks wage cuts from drivers in the northeast after winning similar concessions from workers in Ohio. But, members of Teamsters Local 802, which represents roughly 300 Entenmann’s drivers in New York and northern New Jersey, are preparing for a fight and have authorized union leaders to call a strike. This tale of two sweets superstars is worth watching: non-union Hostess is thriving, which heavily unionized Entenmann’s is suffering. Will Entenmann’s (and then Little Debbie, then Tastykake, etc.) follow suit by going non-union and becoming profitable?