Update on Greedy, Mismanaged Hostess
Hostess took workers' pension money to fund itself
This is Unbelievable!!!!!
Of all the outrages Hostess has committed against its workers, this may take the cake. In August, 2011, the company just stopped contributing to its workers' pensions, and is now acknowledging that it instead used the money for operational expenses. The money that didn't go into pension funds was money that the workers had bargained for and chosen to take as pension instead of wages. But that doesn't mean there's anything they can do about it:
The maneuver probably doesn't violate federal law because the money Hostess failed to put into the pension didn't come directly from employees, experts said.
"It's what lawyers call betrayal without remedy," said James P. Baker, a partner at Baker & McKenzie LLP who specializes in employee benefits and isn't involved in the Hostess case. "It's sad, but that stuff does happen, unfortunately."
It's a little more than sad. It's infuriating, at a minimum. And the fact that "that stuff does happen" as often as it does is a sign of a diseased economy.
This was how these workers were saving for their retirement over decades at Hostess. They were being responsible, planning and saving like we're told we should all do, making that decision at a local level as they bargained their contracts:
For example, John Jordan, a union official and former Hostess employee, said workers at a Hostess factory in Biddeford, Maine, agreed to plow 28 cents of their 30-cents-an-hour wage increase in November 2010 into the pension plan.
Hostess was supposed to take the additional 28 cents an hour and contribute it to the workers' pension plan.
"This local was very aggressive about saving for the future," he said.
And in the end, Hostess was very aggressive about stealing those savings, hour by hour, from the workers. While there may not be a remedy because the 28 cents an hour didn't first go to the workers and then into the pension fund, morally, it's no less stealing, adding up to tens of millions of dollars. The current CEO of Hostess says it's "terrible," but don't blame him, he didn't know it was happening.
You do not want to be the next person to say in my hearing that Hostess went bankrupt because of those greedy union workers.