As the media focused its attention to the sudden attack on workers when Michigan lawmakers passed and Governor Rick Snyder signed “right-to-work-for less” legislation without committee hearings or debate and despite President Obama’s call to reject it, came word of another devious attack on workers who already were hurting.
The AFL-CIO reported that striking members of the MTD-affiliated Bakery, Confectionery, Tobacco Workers and Grain Millers Union (BCTGM) discovered money authorized to be taken from their paychecks for pensions as part of their contract was instead diverted to keep the mismanaged Hostess Brands company afloat. This was happening at the same time Hostess was rewarding its top executives with bonuses.
After already providing givebacks to keep Hostess baking following a 2004 bankruptcy, the company declared Chapter 11 this year and demanded cuts of 24% to 32%. It also stopped making pension contributions in July 2011 despite taking dollars designated for retirement from the workers’ pay. When union members this fall voted overwhelmingly to reject the Hostess demands, the company got a federal bankruptcy court to arbitrarily impose the cuts. BCTGM members went on strike November 9. The company shut its ovens the following week.
According to the union, it does not appear that Hostess violated any federal laws by diverting the money; thus, it probably will not be recovered. The actual amount of money lost by Hostess’ actions is not known, but one estimate states it could be more than $20 million.