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Hostess to shut down Cincinnati plant

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thegoodrichfam View Drop Down
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    Posted: Nov 13 2012 at 3:17pm
http://finance.yahoo.com/news/hostess-shuts-3-plants-035700490.html
 
Direct quote from the website:
 
"In September, the union rejected a Hostess proposal that called for deep labor concessions, but a judge later allowed the baking company to force the union to adopt the new collective-bargaining agreement.

The union said on Friday that it was kicking off the strike to protest the 'horrendous contract' that Hostess imposed, which features wage cuts and limits workers' participation in pension plans.

Mr. Rayburn said Monday afternoon that Hostess would be shutting down plants in Seattle, St. Louis and Cincinnati as a result of the work stoppage. The plants produce everything from cakes to Nature's Pride and Wonder breads, and they employ 627 workers, all of whom will lose their jobs. 'We don't have the manpower to maintain them during the strike,' he said. "

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Post Options Post Options   Thanks (1) Thanks(1)   Quote zapp2525 Quote  Post ReplyReply Direct Link To This Post Posted: Nov 13 2012 at 3:23pm
Now that's a pay cut.............idiots.
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Post Options Post Options   Thanks (1) Thanks(1)   Quote John Beagle Quote  Post ReplyReply Direct Link To This Post Posted: Nov 13 2012 at 3:38pm
From the article: "The strikes were organized by the Bakery, Confectionery, Tobacco Workers & Grain Millers International Union, whose 5,680 Hostess workers account for about 30% of the company's total work force."

Tobacco and Twinkees....Unions stick together even if it means a loss of jobs. Hostess will likely setup shop in a 'right to work' state. 
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Post Options Post Options   Thanks (2) Thanks(2)   Quote blueblood Quote  Post ReplyReply Direct Link To This Post Posted: Nov 13 2012 at 4:03pm
There you go, picking on unions, and just when Obama met with all the union heads today. I'm sure he and they have a plan to put us on the path to prosperity.Wink
 
 
In a related matter, and much more shocking, did you happen to catch this the other day?
Michigan Unions Lose and Right-to-Work Revival Looms


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Post Options Post Options   Thanks (0) Thanks(0)   Quote cmsquare Quote  Post ReplyReply Direct Link To This Post Posted: Nov 13 2012 at 7:28pm
Is there anyway we can blame this on Obama care?

Come on people.....get to work.



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Post Options Post Options   Thanks (0) Thanks(0)   Quote Dannyboy Quote  Post ReplyReply Direct Link To This Post Posted: Nov 13 2012 at 8:39pm
Hostess is in bankruptcy. They have to make drastic cuts or a lot more than 600 people will be out of work.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote johnwells Quote  Post ReplyReply Direct Link To This Post Posted: Nov 13 2012 at 10:52pm
This guy must be trying to stock up since there might be a snack shortage.
 
 

Warren County Sheriff’s deputies are on the lookout for an apparently hungry suspect who boosted a large quanity of snacks last week.

A truck with an attached trailer full of Little Debbie snack products was stolen around 9:20 a.m. Friday, Nov. 12, from the parking lot of Shell Oil, 9791 Mason Montgomery Road in Deerfield Twp., according to Chief John Newsom of Warren County Sheriff’s Department. The truck was a red 2012 Dodge Dually with a black 2008 trailer attached to its rear. The trailer had no markings on it.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote blueblood Quote  Post ReplyReply Direct Link To This Post Posted: Nov 14 2012 at 6:31am
Originally posted by johnwells johnwells wrote:

This guy must be trying to stock up since there might be a snack shortage.
 
 

Warren County Sheriff’s deputies are on the lookout for an apparently hungry suspect who boosted a large quanity of snacks last week.

A truck with an attached trailer full of Little Debbie snack products was stolen around 9:20 a.m. Friday, Nov. 12, from the parking lot of Shell Oil, 9791 Mason Montgomery Road in Deerfield Twp., according to Chief John Newsom of Warren County Sheriff’s Department. The truck was a red 2012 Dodge Dually with a black 2008 trailer attached to its rear. The trailer had no markings on it.

Imagine the street value in Denver!Smile


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Post Options Post Options   Thanks (0) Thanks(0)   Quote John Beagle Quote  Post ReplyReply Direct Link To This Post Posted: Nov 14 2012 at 6:53am
Originally posted by blueblood blueblood wrote:

Originally posted by johnwells johnwells wrote:

This guy must be trying to stock up since there might be a snack shortage.
 
 

Warren County Sheriff’s deputies are on the lookout for an apparently hungry suspect who boosted a large quanity of snacks last week.

A truck with an attached trailer full of Little Debbie snack products was stolen around 9:20 a.m. Friday, Nov. 12, from the parking lot of Shell Oil, 9791 Mason Montgomery Road in Deerfield Twp., according to Chief John Newsom of Warren County Sheriff’s Department. The truck was a red 2012 Dodge Dually with a black 2008 trailer attached to its rear. The trailer had no markings on it.

Imagine the street value in Denver!Smile
LOL
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Post Options Post Options   Thanks (1) Thanks(1)   Quote thegoodrichfam Quote  Post ReplyReply Direct Link To This Post Posted: Nov 16 2012 at 10:24am
http://news.yahoo.com/hostess-wind-down-operations-lay-off-18-000-124246276.html
 
Well looks like Hostess is done for good now...great job Unions! You officially killed the twinkie...
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Roadstar Quote  Post ReplyReply Direct Link To This Post Posted: Nov 16 2012 at 10:54am
Better stock up if you like Suzie Q's. I might have to put some in the freezer.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Doc Quote  Post ReplyReply Direct Link To This Post Posted: Nov 16 2012 at 11:17am

This man is absolutely inconsolable.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote zapp2525 Quote  Post ReplyReply Direct Link To This Post Posted: Nov 16 2012 at 1:13pm

Some info


The Bakers' union has made several statements earlier in the week saying management is to blame for the condition of the company, not the strike. It did not respond to numerous requests for comment Friday.

The new contract cut salaries across the company by 8% in the first year of the five-year agreement. Salaries were then scheduled to bump up 3% in the next three years and 1% in the final year.

Hostess also reduced its pension obligations and its contribution to the employees' health care plan. In exchange, the company offered concessions, including a 25% equity stake for workers and the inclusion of two union representatives on an eight-member board of directors.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote Matt_Steele Quote  Post ReplyReply Direct Link To This Post Posted: Nov 16 2012 at 4:27pm
Well maybe now people will eat better? 

Anyway, I'd wager a good chunk of change on the fact that we'll still see Twinkies and Wonder bread existing after this mess is over.


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Post Options Post Options   Thanks (0) Thanks(0)   Quote blueblood Quote  Post ReplyReply Direct Link To This Post Posted: Nov 16 2012 at 4:51pm

 

What happens if Twinkies really do go away?

By J.M. HIRSCH | Associated Press1 hr 12 mins ago
 
  • FILE - This 2003 file photo originally released by Interstate Bakeries Corporation shows Twinkies cream-filled snack cakes. Twinkies first came onto the scene in 1930 and contained real fruit until rationing during World War II led to the vanilla cream Twinkie. (AP Photo/Interstate Bakeries Corporation via PRNewsFoto)
    Enlarge Photo

    Associated Press/Interstate Bakeries Corporation via PRNewsFoto - FILE - This 2003 file photo originally released by Interstate Bakeries Corporation shows Twinkies cream-filled snack cakes. Twinkies first camemore onto the scene in 1930 and contained real fruit until rationing during World War II led to the vanilla cream Twinkie. (AP Photo/Interstate Bakeries Corporation via PRNewsFoto) less

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Let's not panic. We all know that Twinkies, Ding Dongs, Wonder bread and the rest of Hostess Brands' oddly everlasting foods aren't going away any time soon, even if the food culture that created them is gasping its last.

Yes, Hostess is shutting down. And odds seem to favor the roughly century-old company disappearing from our corporate landscape. But before you rush out to stockpile a strategic Twinkie reserve, consider a few things. Namely, that Twinkies never die. You know full well that the snack cakes down at your corner 7-Eleven are going to outlive us all. Probably even after they've been consumed.

And then there's the acquisition-happy nature of the business world, an environment that increasingly prizes intellectual property above all. It's hard to imagine the fading away of brands as storied and valuable as Ho Hos, Ring Dings and Yodels. Within hours of announcing the closure Friday, the company already had put out word that Zingers, Fruit Pies and all the other brands were up for grabs.

Even if production really did stop, how long do you think it would take for some enterprising investor intoxicated by a cocktail of nostalgia and irony for the treats Mom used to pack in his G.I. Joe lunch box to find a way to roll out commemorative Twinkies? Special edition holiday Ho Hos? It's just the nature of our product-centered world. Brands don't die, even when perhaps they should.

But let's pretend for a moment they did. What would we lose if Twinkies fell off the culinary cliff?

Certainly few obesity-minded nutritionists would bemoan the loss. With some 500 million Twinkies produced a year, each packing 150 calories... Well, let's just leave it by saying that shaving 75 trillion calories from the American diet sure could add up to a whole lot of skinny jeans.

Except that Twinkies aren't merely a snack cake, nor just junk food. They are iconic in ways that transcend how Americans typically fetishize food. But ultimately, they fell victim to the very fervor that created them.

Despite the many urban legends about the indestructability of Twinkies — Did you know they are made with the same chemical used in embalming? Or that they last 5, no 15, no 50 years? — and the many sadly true stories about the atrocious ingredients used to create them today, these treats once upon a time were the real deal.

They started out back in 1930, an era when people actually paid attention to seasonality in foods. James A. Dewar, who worked at Hostess predecessor Continental Baking Company in Schiller, Ill., wanted to find a way to use the bakery's shortbread pans year round. You see, the shortbread was filled with strawberries, but strawberries were only available for a few weeks a year.

So he used the oblong pans to bake spongecakes, which he then filled with banana cream. Bananas were a more regular crop.

Let's pause so you can wrap your mind around that for a moment. Twinkies once contained real fruit. Twinkies were created because of seasonality.

All went swimmingly until World War II hit and rationing meant — say it with me — Yes! We have no bananas. And so was born the vanilla cream Twinkie, which was vastly more popular anyway. Even then, there was a crafted element to these treats. The filling was added by hand using a foot pedal-powered pump. Pump too hard and the Twinkies exploded. These days you only see that when teenagers post YouTube videos of themselves microwaving them.

It was around this time that American food culture did an about face. It was an era when the industrialization and processing of cheap food wasn't just desired, it was glorified. Cans and chemicals could set you free. And they certainly set Twinkies free of the nuisance of a short shelf life. It's not formaldehyde that keeps these snack cakes feeling fresh, it's the lack of any dairy products in the so-called "cream."

"Something about it just absolutely grabbed the popular culture imagination," says Marion Nestle, a New York University professor of nutrition and food studies — and no fan of junk food. "It's the prototypical indestructible junk food. It was the sort of height to which American technological ingenuity could go to create a product that was almost entirely artificial, but gave the appearance of eclairs."

When Twinkies signed on as a sponsor of the "Howdy Doody" show during the 1950s, their cultural legacy was sealed. Taglines such as "The snacks with a snack in the middle" began etching themselves into generations of young minds and it was considered perfectly fine that Twinkie the Kid would lasso and drag children before stuffing his sugar bombs in their faces.

It was the snack cake heyday. Twinkies were being deep-fried at state fairs, doing cameos in movies like "Ghost Busters" and "Die Hard" and being pushed by Spider-Man in comic books. A pre-vegan President Bill Clinton even signed off on including Twinkies in the nation's millennium time capsule (the two-pack was later removed and consumed by his council overseeing such matters for fear mice would add themselves to the time capsule).

Sure, not all the attention was positive. Somewhere along the line, Twinkies became the butt of jokes, mostly about their perceived longevity (though Hostess staunchly maintains 25 days is the max). And not all associations were great. The so-called "Twinkie defense" came out of the 1979 murder trial of Dan White, whose lawyers included his junk food obsession among the evidence of his supposed altered state of mind.

Then something happened. Suddenly, Americans who for decades had been tone deaf to how food was produced suddenly started paying attention, seeking out organic goat cheeses made from the milk of an unoppressed herd raised on a fence-free collective within a 20-mile radius of home. Even Doritos went artisanal, and an awareness of seasons and availability crept back into the culinary consciousness.

Suddenly products that had so prospered by their artificiality lost their allure. Even Hostess, which blamed this week's shutdown mostly on a labor dispute that hobbled its facilities, has acknowledged that consumer concern about health and food quality changed the game. People just weren't buying snack cakes like they used to.

So what would we lose if Twinkies really did go away? From a culinary standpoint and from a nutritional standpoint, it's hard to love the Twinkie (or pretty much any Hostess product). It's hard not to wonder how the American diet, the American palate, would be different if the parents of the '50s hadn't begun a cycle of turning to processed packages as the de facto snack of childhood.

And does nostalgia alone justify the continuation of something so patently bad for us?

Of course nostalgia, even irony, taste awfully good.

And I notice that a growing number of — dare I say it — artisanal bakeries are going retro, creating their own inspired takes on classic processed snack cakes. Treats like the red velvet "twinkies" at New York's Lulu Cake Boutique. Real ingredients. So perhaps it isn't time for Twinkies to go away. Or to stay the same. Maybe it's time for them to go back to their roots. And then, we lose nothing.



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I don't think I've had a Twinkie in years. When my family wants something sweet, I make it myself. It tastes way better and it's cheaper.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote cmsquare Quote  Post ReplyReply Direct Link To This Post Posted: Nov 17 2012 at 12:03am
i really wasn't worried about this until I realized hostess owned Drakes.

Now I am willing to admit we have a problem.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote rudiger Quote  Post ReplyReply Direct Link To This Post Posted: Nov 17 2012 at 8:07am
Originally posted by zapp2525 zapp2525 wrote:

The Bakers' union has made several statements earlier in the week saying management is to blame for the condition of the company, not the strike. It did not respond to numerous requests for comment Friday.
I'm no fan of labor unions but have to concur with this. My uncle was the Cincinnati Butternut plant manager up until he retired in the early nineties. His retirement was due entirely to a significant change in Interstate Bakeries upper management, culminating in the 1995 merger with Wonder by Continental Bakeries. Butternut operated their plants completely 'hands-off'. The only criteria was that they met their profit goals. My uncle was allowed the freedom to run his plant as he saw fit, and he was good at it.
 
Wonder operated in the complete opposite manner. They were a rigid, top-down, by-the-book organization and after the 1995 merger, things went downhill quickly. From Wikipedia
 
 
With the merger, Interstate now held two major national bread divisions – Butternut and Wonder Bread. The two divisions operated with different cultures: Butternut was unregimented and each bakery was a self-contained profit center; Wonder Bread was very "procedural and by-the-book." This caused some problems early on. In both cultures, snack cakes were more profitable due to economy of scale and logistics. When extended-shelf-life enzymes were developed for bread, the hope was to convert the system of many small inefficient bakeries into an efficient network of a relatively few giant bakeries like their snack cakes operation. However, the recipe using the new enzymes caused the bread to have a different taste and texture, and other market forces like a resurrection of the Atkins diet and competitor Krispy Kreme doughnuts affected pricing and sales volume.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote blueblood Quote  Post ReplyReply Direct Link To This Post Posted: Nov 17 2012 at 9:23am
 
 
 


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Post Options Post Options   Thanks (0) Thanks(0)   Quote John Beagle Quote  Post ReplyReply Direct Link To This Post Posted: Nov 19 2012 at 9:53am

Here is a different take on the failure of Hostess"

Founded in 1930 as Interstate Bakeries Co. (IBC) the company did fine for years. But changing consumer tastes, including nutrition desires, changed how much Wonder Bread, Twinkies, HoHos and Honey Buns people would buy — and most especially affected the price – which was wholly unable to keep up with inflation. This trend was clear in the early 1980s, as prices were stagnant and margins kept declining due to higher costs for grain and petroleum to fuel the country’s largest truck fleet delivering daily baked goods to grocers.

Hostess spent decades fighting the trend

IBC kept focusing on operating improvements and better fleet optimization to control rising costs, but the company was unwilling to do anything about the product line.  To keep funding lower margins the company added debt, piling on $450M by 2004 when forced to file bankruptcy due to its inability to pay bills.  For 5 years financial engineers from consultancies and investment banks worked to find a way out of bankruptcy, and settled on adding even MORE debt, so that – perversely – in 2009 the renamed Hostess had $670M of debt – at least 2/3 the total asset value!

Since then, still trying to sell the same products, margins continued declining.  Hostess lost a combined $250M over the last 3 years.

The obvious problem is leadership kept trying to sell the same products, using roughly the same business model, long, long, long after the products had become irrelevant.  “Demand was never an issue” a company spokesman said.  Yes, people bought Twinkies but NOT at a price which would cover costs (including debt service) and return a profit.  Demand statements are irrelevant if you are giving the product away!

In a last, desperate effort to keep the outdated model alive management decided the answer was another bankruptcy filing, and to take draconian cuts to wages and benefits.  This is tantamount to management saying to those who sell wheat they expect to buy flour at 2/3 the market price – or to petroleum companies they expect to buy gasoline for $2.25/gallon.  Labor, like other suppliers, has a “market rate.”  That management was unable to run a company which could pay the market rate for its labor is not the fault of the union.

Failure was management’s fault.

By constantly trying to defend and extend its old business, leadership at Hostess killed the company.  But not realizing changing trends in foods made their products irrelevant – if not obsolete – and not changing Hostess leaders allowed margins to disintegrate.  Rather than developing new products which would be more marketable, priced for higher margin and provide growth that covered all costs Hostess leadership kept trying to financial engineer a solution to make their horse and buggy competitive with automobiles.

And when they failed, management decided to scapegoat someone else.  Maybe eating too many Twinkies made them do it.  It’s a Wonder the Ding Dongs running the company kept this Honey Bun alive by convincing HoHos to loan it money!  Blaming the unions is simply an inability of management to take responsibility for a complete failure to understand the marketplace, trends and the absolute requirement for new products.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote John Beagle Quote  Post ReplyReply Direct Link To This Post Posted: Nov 19 2012 at 3:37pm

Hostess Brands Inc. will hold talks with its bakery workers’ union tomorrow to explore the reasons for a strike that the maker of Twinkies and Wonder bread said will force it to liquidate.

U.S Bankruptcy Judge Robert Drain said today at a hearing in White Plains, New York, that there are “serious questions as to the logic behind the decision to strike.” He urged the company and the union to enter mediation, citing the potential loss of more than 18,000 jobs.

http://www.businessweek.com/news/2012-11-19/hostess-judge-asks-for-mediation-sessions-over-strike


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Post Options Post Options   Thanks (0) Thanks(0)   Quote blueblood Quote  Post ReplyReply Direct Link To This Post Posted: Nov 29 2012 at 7:47pm
So, reading these numbers prove beyond a shadow of a doubt it was the union! They are worth more "dead than alive"! The total value of asset worth exceeds their liabilities, just not as an intact company trying to go forward with 300+ individual contracts and unbelievable restrictions to inefficient operations.
http://www.foxbusiness.com/news/2012/11/29/hostess-liquidation-draws-scores-potential-bidders/?intcmp=trending
Hostess liquidation draws scores of potential bidders
 
Hostess Brands Inc, the bankrupt maker of Twinkies snack cakes, received court permission to wind down its 82-year-old business on Thursday but revealed "furious" interest in its iconic brands from potential buyers.

It's undisputed they will be worth more moving down this path," Drain said of the wind-down plan.

Around 110 potential bidders have contacted the company about bidding for at least part of its business, and 70 had enough interest to sign confidentiality agreements, Hostess' banker told the hearing in White Plains, New York.

Joshua Scherer of Perella Weinberg, who was hired by Hostess to sell its assets, said that six potential bidders have hired large investment banks to help them.

"It's very significant because it indicates to me that not only are these buyers serious, but they are expecting to spend substantial sums," said Scherer. He said the liquidation could raise $1 billion.

Scherer described the level of incoming calls from potential bidders as "fast and furious." Interested parties include large national retailers and overseas buyers that wanted to bring Hostess brands to India, he said.

Money raised from the sale of assets will help Hostess repay its creditors. It has about $900 million of secured debt and faces up to about $150 million of administrative claims.

Scherer said last week that Hostess could be worth $2.3 billion to $2.4 billion in a normal bankruptcy, an amount equal to its annual revenue.



 

 


 


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Post Options Post Options   Thanks (0) Thanks(0)   Quote John Beagle Quote  Post ReplyReply Direct Link To This Post Posted: Nov 30 2012 at 8:31am
You are missing the Union's point. Management killed the Twinkee, not the Unions. And they used the Bankruptcy court to do it.

There are many Hostess brand products that are very valuable. The union was wrecking profit margins. So to save the Twinkee, the unions had to go. (I'm sure this decision was made by someone high up in the republican party. Probably that little snot nose Paul Ryan).Wink

You can't have work rules and pay scales that make one sponge cake twice as expensive to make and be competitive. No matter how delicious your sponge cake is, price is inelastic when it comes to sponge cake. 

You might say the company was being greedy, and maybe there was some of that, but really the company needs to make a profit. Hostess would have survived had their plants been located in Right to Work states. I'll just bet that Twinkees will be Union Free when they arise from the dead.

In Ohio and other states, you can't work in certain professions! Even if you are qualified!!! Unless you join the union!!! 

You HAVE to join these "club like organizations" where you HAVE to pay dues and make a pledge to the club president. 


The club president is kind of like the Grand PooBah on the Flintstones. 

When you are the GPB you are like a king. And you automatically act like a king. And unlike the president of a company, you have no profit and loss statement or stockholders to concern yourself with. Your only focus as the GPB is getting more. More and more. And they say companies are greedy.

Yes, it was the company the purposefully failed to be innovative their their product. Teh company purposefully wanted the company to fail, so they could use the bankruptcy courts to get the union out. It was a war between the union and the company management. 

The winners will be people who live and work in right to work states. The losers will be the union. 

That's the way I see it.


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