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View Diary: The unions killed Hostess…another right wing myth. (56 comments)

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  •  The company's financials were such (1+ / 0-)
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    Liberal Mole

    That the employee's pay and benefits were 2% of its liabilities. A 30% pay cut (which is what was being required) would make the pay and benefits 1.4% of its liabilities. The other 97.4% of its liabilities would have remained unchanged.

    The company's submitted bankruptcy "plan" had no other changes to its financial structure, just that tiny change, which would have meant that within a month after the concession, they would once again fail to make their debt payments.

    The company has 1.2 Billion dollars in debt. It could not afford the interest payments, never mind principle. A 0.6% change in its liabilities would have had exactly zero impact on the effect of the gigantic debt albatross.

    So, would the employees have bought themselves a few weeks of paychecks? Maybe, but probably not. And if they had bought an extra few weeks, the few extra paychecks would be 30% smaller. This way, at least, they also kept what should have been their own pay from further lining the pockets of the greedy bastards who ruined the company for personal gain.

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