Dave Ross on Hostess and Unions
Original post made by Joe, Another Pleasanton neighborhood, on Nov 20, 2012
The transcript of today's radio program is copied below, with a link to the Dave Ross website. Read into it what you will, but the facts remain.
So Hostess may not go bankrupt after all. The judge wants everyone to sit down and talk about it. That's good. It might save those 18,500 jobs. But there's really only one thing to discuss.
According to the Wall Street Journal's MarketWatch column, Hostess's annual revenues were $2.5 billion.
$2.5 billion divided by 18,500 is $135,000 per Hostess employee. Well, there's another company with revenue figures in that ballpark: McKee Foods, makers of Little Debbie snacks -- the Cosmic Brownie, the Oatmeal Cream Pie, and the Cloud Cake, which looks suspiciously like a Twinkie, but sells for less.
McKee brings in about $1.1 billion with about 6,500 employees, which works out to $164,000 per employee. Twenty-one percent more than each Hostess employee brings in.
Now McKee has a very different history. It's still owned by the McKee family, it never sold out to venture capitalists, and it never unionized.
But there's no point in debating history, because the bottom line is they sell similar products for a lower price, and their employees are 21 percent more productive than Hostess employees.
So when everybody sits down in that bankruptcy court to figure things out, there's only one thing to discuss: how to get 21 percent more productive. When they sit down for that meeting I have a suggestion for the refreshments: Cosmic Brownies.
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