When I previously wrote about the tragic, private equity driven bankruptcy of Hostess Brands — a bankruptcy that Hostess tried to publicly blame on a labor union to divert attention from its efforts to load the company with debt before trying to break up the company and sell off the brands — some more conservative commenters responded blasting my characterization, defending the executive leadership of Hostess against the union. They felt the union was asking for too much money when the company was failing. Perhaps they were magnanimous enough to suggest that the executives bore some of the blame, but that was the most ground they would give.
Well Hostess went ahead and displayed its true colors in court, and boldly proclaimed that senior executives would prefer to take none of the blame themselves. Hostess is asking the bankruptcy judge for approval to pay out $1.8 million in bonuses to their executives. While Hostess tried to save itself temporarily by asking employees making $34,000 to get $25,000, apparently they never seriously considered cutting back their own paychecks. Public fingers all around gang!
If executives are supposedly “leaders,” then how can they seriously feel entitled to reward themselves for driving the company back into bankruptcy? The answer, of course, is that driving the company out of business was the plan all along. To their minds, these bonuses are a pat on the back for a job well done.
But if you still think management was earnestly trying, but failing, to save the company, this bonus request still undermines the effort to blame the unions. Hostess wants the media to parrot its PR stunt of crediting the brave executives for trying to improve the company and blaming the individual bakers for not taking a 25%+ pay cut. In a sense, Hostess wants to create the message that the workers were seeking more money for inferior product. But if the company was failing, what caused that? The quality of the product was never diminished. The Twinkie remained as good as it was 20 years ago — and I leave to your personal tastes exactly how “good” that was.
No, the managers were seeking to kill the company intentionally at worst or utterly incompetent and letting down workers and shareholders at best. There’s just no scenario where the union is more to blame here.
In either scenario, Hostess executives have a lot of Ho Hos to ask for bonuses at this stage.