Ding Dongs are made by Hostess, which also makes Twinkies. It has filed for bankruptcy.
It has now asked the union to take a shot in the head: radically reduced pension fund contributions from the company: from over $100 million a year to $25 million.
If the union says no, the bankruptcy court will decide who doesn’t get what.
The union has not responded.
What can the union do? It cannot get what it has been promised. So, it has to decide: let the court decide or continue to play ball with management.
All across America, this is going to play out the same way. Companies will declare bankruptcy. That way, the #1 expense — retirement and medical debts — are wiped clean. What can the retirees do about it? Nothing but go back to work.
Companies promised employees big retirements. It was pie in the sky bye and bye. The promises are not going to come true. Bankruptcy is the easy way out.
If a firm goes belly-up, senior managers keep their jobs. They lose their stock old stock options, but they can get new ones after the firm emerges from bankruptcy. They win.
Retirees get nothing.
Factor this into your retirement plans. Assume that your corporate pension will not get paid.
The more debt the company has, the more likely that you will get stiffed.