No more ding dongs and twinkies

[CosmicCowboy]

Hostess says "fuck you" to the bakers union.


And that’s that: Hostess Brands, maker of Twinkies, Wonder Bread and more, announced this morning it has filed a motion with bankruptcy court to start liquidating the company immediately. A huge number of jobs are soon to be lost.

“Hostess Brands will move promptly to lay off most of its 18,500-member workforce,” said CEO Gregory F. Rayburn in the statement, “and focus on selling its assets to the highest bidders.”

In a letter posted on a new site set up to communicate with employees and suppliers through the liquidation process, Mr. Rayburn pinned the blame on its striking union:

Despite everyone’s considerable efforts to move Hostess out of its restructuring, when we began implementing the Company’s last, best and final offer, the Bakers Union chose to stage a crippling strike. This affected Hostess’ ability to continue to make products and service its customers’ needs and pushed Hostess into a Wind Down scenario. As a result, we are forced to proceed with an orderly wind down and sale of our operations and assets. We deeply regret taking this action. But we simply cannot continue to operate without the ability to produce or deliver our products.

There’s no way to soften the fact that this will hurt every Hostess Brands employee. All Hostess Brands employees will eventually lose their jobs – some sooner than others. Unfortunately, because we are in bankruptcy, there are severe limits on the assistance the Company can offer you at this time.

[George Gervin's Afro]

dang bakers union..

[Wild Cobra]

This is just a preview of what the Obamnation called Obamacare will bring.

[boutons_deux]

Hostess/Wonder made pathogenic shit, good riddance.

Appears to have been badly mismanaged, so take no responsibility and blame everything on the workers.

[101A]

Gonna go out and buy a couple dozen boxes of Twinkies today;

Can't do nuthin but go up in value; thirty years I can retire and live high on the hog selling those on ebay.

[Rick Santorum]

This is just a preview of what the Obamnation called Obamacare will bring.

:lmao

[boutons_deux]

Gonna go out and buy a couple dozen boxes of Twinkies today;

Can't do nuthin but go up in value; thirty years I can retire and live high on the hog selling those on ebay.

Wonder Bread and all Hostess crap is so full of shit, it won't rot in 30 years. Fungi and bacteria, smarter than American greasebags, won't touch it

[Winehole23]

http://money.cnn.com/2012/11/16/news/companies/hostess-closing/index.html?iid=Lead

[Winehole23]

Gonna go out and buy a couple dozen boxes of Twinkies today;

Can't do nuthin but go up in value; thirty years I can retire and live high on the hog selling those on ebay.Hostess will be sold off. Can't really picture Ding Dongs and Twinkies going away forever.

[coyotes_geek]

Hostess will be sold off. Can't really picture Ding Dongs and Twinkies going away forever.

Me either. Some private equity firm will pick them up, sans the union obligations, and keep on trucking.

[Th'Pusher]

Someone will buy the Twinkie brand and revive it. Not saying the union wasn't being intransigent, but hostess had not done a great job of keeping up with the times.

[CosmicCowboy]

I wouldn't be surprised if Obama tries to intercede and force Hostess to stay open...firing 12,500 union members will be a big deal to him...

[elbamba]

Hostess will be sold off. Can't really picture Ding Dongs and Twinkies going away forever.

Make way for Bimbo

source=imglanding&ct=img&q=http://2.bp.blogspot.com

[elbamba]

Damn, picture didn't work.

[elbamba]

Me either. Some private equity firm will pick them up, sans the union obligations, and keep on trucking.

I see Bain Capital all over this one. Mitt's 2016 message will be all about saving the packaged desert industry. Keep your stinkin auto bailout.

[Winehole23]

I wouldn't be surprised if Obama tries to intercede and force Hostess to stay open...firing 12,500 union members will be a big deal to him...how might he do so?

[coyotes_geek]

I see Bain Capital all over this one. Mitt's 2016 message will be all about saving the packaged desert industry. Keep your stinkin auto bailout.

:lol

I can see Blue Team working on the "Mitt Romney killed my husband" ad as we speak.

http://bronanthebarbarian.files.wordpress.com/2011/02/fat-guy-eating-twinkie.jpg

[TeyshaBlue]

http://24.media.tumblr.com/tumblr_md68xwzZQI1rktm91o1_500.jpg

[CosmicCowboy]

how might he do so?

Never heard of the Justice Department and the NLRB?

[boutons_deux]

Hostess Brands, formerly known as Interstate Bakeries Corporation, is a leading wholesale baker headquartered in Irving, Texas.

It has 39 bakeries and approximately 21,000 employees. Hostess generates revenue through sales of baked goods to supermarkets, mass marketers, and convenience stores in the US.

The privately-held bread and snack food manufacturer also sells directly to consumers through Hostess Breands retail bakery outlets.

The company’s brands include Twinkies, Wonder, Home Pride, Hostess Fruit Pies, and Ho-Hos.

Hostess filed for Chapter 11 bankruptcy protection in September 2004 and emerged as a private company in February 2009.

In January 2012, It filed for its second Chapter 11 bankruptcy.

The privately-held packaged goods confectioner was burdened with 372 union agreements following its post-2004 bankruptcy restructuring led by Ripplewood Holdings, which led to Hostess' second bankruptcy filing.

As of January 2012, 83% of Hostess' 19,000 employees were unionized.

Founded in 1930 by Ralph L. Nafziger, Hostess Brands is headquartered in Irving, Texas.

http://www.privco.com/private-company/hostess-brands-inc

[TeyshaBlue]

Make way for Bimbo


I'm surprised Bimbo hasn't picked it up already. They absolutely pounced on Mrs. Baird's.

[leemajors]

Little Debbie ftw

[ChumpDumper]

Never heard of the Justice Department and the NLRB?Explain how it would work.

[Winehole23]

Never heard of the Justice Department and the NLRB?sure I have. walk us through the process, profe.

[coyotes_geek]

I wouldn't be surprised if Obama tries to intercede and force Hostess to stay open...firing 12,500 union members will be a big deal to him...

Not going to happen.


Hostess Brands, formerly known as Interstate Bakeries Corporation, is a leading wholesale baker headquartered in Irving, Texas.

[CosmicCowboy]

Explain how it would work.


sure I have. walk us through the process, profe.

Seriously? You've forgotten about Boeing?

All NLRB has to say is that Hostess didn't negotiate in good faith and get a cease and desist from Justice.

[ChumpDumper]

Seriously? You've forgotten about Boeing?

All NLRB has to say is that Hostess didn't negotiate in good faith and get a cease and desist from Justice.Is this your prediction here?

And wasn't the contract decided on by a judge?

[CosmicCowboy]

There are a bunch of pissed off teamsters out there. They agreed to the new contract but the bakers union went on strike anyway. I can virtually guarantee you that the unions are talking to the White House right now.

[CosmicCowboy]

Is this your prediction here?

And wasn't the contract decided on by a judge?

I consider it to be a distinct possibility but I'm not going to argue about it for 5 pages. If you disagree, then fine. Disagree.

[ChumpDumper]

Seems it would be less of a possibility with the involvement of a judge in making of the contract, but I just thought I heard that in passing.

[baseline bum]

Twinkies taste like shit anyways; fuck 'em.

[leemajors]

Twinkies taste like shit anyways; fuck 'em.

messy

[RandomGuy]

Seriously? You've forgotten about Boeing?

All NLRB has to say is that Hostess didn't negotiate in good faith and get a cease and desist from Justice.

http://www.politifact.com/truth-o-meter/statements/2012/aug/30/nikki-haley/haley-ties-obama-boeing-labor-dispute/

http://static.politifact.com.s3.amazonaws.com/rulings%2Ftom-halftrue.gif

Half true.

Yet another pebble in the pile.

You might want to bump up your standards of evidence a bit.

[CosmicCowboy]

http://www.politifact.com/truth-o-meter/statements/2012/aug/30/nikki-haley/haley-ties-obama-boeing-labor-dispute/

http://static.politifact.com.s3.amazonaws.com/rulings%2Ftom-halftrue.gif

Half true.

Yet another pebble in the pile.

You might want to bump up your standards of evidence a bit.

I didn't say the cases were identical, and I don't believe a fucking thing Jay Carney says.

From your article:


When the union and Boeing settled their dispute, Solomon said, "this is the outcome we have always preferred." The goal, Solomon said, is to foster negotiations between management and unions that protect workers’ rights. "The parties’ collective bargaining agreement does just that," he said.

And Hostess firing 13,500 union workers instead of agreeing to their demands is exactly why the NLRB may get involved.

[MannyIsGod]

I'm going to start using Red Team climate logic on everything.

This is just a natural economic cycle. Companies went out of business before unions thereby the unions could have nothing to do with this. Oh, and black carbon, youtube, etc etc.

[RandomGuy]

I didn't say the cases were identical, and I don't believe a fucking thing Jay Carney says.

From your article:

And Hostess firing 13,500 union workers instead of agreeing to their demands is exactly why the NLRB may get involved.

I suppose it is possible, but the NLRB rarely gets involved unless there is a bit more clear evidence that something other than normal business cycles is happening.

Next you will be telling me it is happening because of the Pentevorate.

TPMS6tGOACo

[boutons_deux]

Never fear, Fox is here to keep all its dumbfuck listeners misinformed

Fox Ignores Hostess' Array Of Troubles To Scapegoat Union For Liquidation
Fox News placed the blame for the planned liquidation of Hostess Brands squarely on a labor dispute with one of the company's unions. In fact, Hostess' unions had previously made significant concessions when the company went through a failed bankruptcy, and Hostess had many problems beyond labor costs, including an inability to adjust to changes in consumer tastes, which contributed to its bankruptcy.


http://mediamatters.org/research/2012/11/16/fox-ignores-hostess-array-of-troubles-to-scapeg/191440

[boutons_deux]

No Cupcake: Workers Turn Down Bad Deal from Hostess

Workers had several important issues to consider beyond just the prospect of working for less pay and under worse conditions.

First, and most importantly, there was little reason to have much confidence in the current management team. They had done nothing to turn the company around in the three years since the last bankruptcy and there was little reason to believe that they would do any better going forward.

Accepting new concessions would provide no guarantee of job security. In fact, management wanted the unions to agree to the closure of 10-12 plants (of its choosing) as part of a new contract. This means that many of the company’s 18,000 workers would soon have been laid off even if the workers had accepted management’s terms.

Second, management was not shy about rewarding itself in spite of the company’s poor financial condition. The CEO upped his annual pay to $2.25 million and other top executives got raises of 35-80 percent. This doesn’t seem like the behavior of management that puts the survival of the company first.

Third, the financial situation of the pension has to be a top concern for workers. While the pension is guaranteed by the Pension Benefit Guarantee Corporation, the guarantee for multi-employer plans like the one at Hostess is limited. If the plan were to become insolvent then many workers would see large cuts in benefits.


From this standpoint, if Hostess were to continue to put off contributions to the pension and allow it to become badly underfunded, then workers could be looking at sharply reduced pensions in retirement. Workers who are approaching retirement age may view this prospect as a far greater danger than the risk of losing their job at this stage in their career.


http://www.cepr.net/index.php/blogs/cepr-blog/no-cupcake-workers-turn-down-bad-deal-from-hostess?utm_source=CEPR+feedburner&utm_medium=feed&utm_campaign=Feed%3A+cepr+%28CEPR%29&utm_content=Google+Reader

[baseline bum]

RT though, how do you go broke selling sugary crap to a nation of fat fucks?

[boutons_deux]

RT though, how do you go broke selling sugary crap to a nation of fat fucks?

If only that had put some cheese, bacon, and BBQ sauce on it, the fat fucks would suck it down.

[TeyshaBlue]

Bacon!

[baseline bum]

Hostess needed to batter and deep fry that shit. Then could come the bacon wrapping. A syrup packet wouldn't have hurt either.

[CosmicCowboy]

:hungry:
Bacon!

[rjv]

i call it a win for the union. and for the rest of america to boot.

[CosmicCowboy]

i call it a win for the union. and for the rest of america to boot.

:lmao @ unemployed = win

From union wages to wal-mart is hardly a win.

[Th'Pusher]

:lmao @ unemployed = win

From union wages to wal-mart is hardly a win.
Blame the unions all you want, but that company had been run by some seriously incompetent fucks for a long time.

[DMC]

I agree that Little Debbie will buy out Hostess and start packaging their goods in Little Debbie boxes with Hostess brand names.

Just don't stop making the Suzy Q. That shit is a heart attack neatly packaged.

[DMC]

btw, same shit happened to the entire city of Detroit. 50 dollars an hour for an unskilled worker to apply a rivet. It's capitalism at it's finest though, where the labor supply forms a monopoly. Since monopolies were outlawed in supply chains, it's odd that workers can hold a company hostage. Hostess should change it's name and open back up in Texas where all the demand is anyhow, plus the bean factory puts out tons of workers who work for cheap.

[ElNono]

I wouldn't be surprised if Obama tries to intercede and force Hostess to stay open...firing 12,500 union members will be a big deal to him...


Never heard of the Justice Department and the NLRB?

Terrible take, tbh... Hostess is closing shop. This isn't about closing a plant or even firing anybody. NLRB or the Justice Department have nothing to do here.

And no, the Boeing situation has absolutely nothing to do with this. Boeing didn't file for bankruptcy.

[DMC]

Hostess needed to batter and deep fry that shit. Then could come the bacon wrapping. A syrup packet wouldn't have hurt either.
Powdered sugar, fake ass Taco Bell cheese and salt. Comes with a pack of cigarettes and a CPAP.

[Wild Cobra]

General Motors tuned in to Government Motors. Maybe Hostess wants the same deal?

[ElNono]

GM is making money, perhaps you're onto something there...

[DMC]

General Motors tuned in to Government Motors. Maybe Hostess wants the same deal?

Not going to happen. No one gives a shit if Hostess goes tits up. Those workers will all get free phones and free healthcare, and they will cause the makers of Lipitor to have to ramp up production.

[ElNono]

Powdered sugar, fake ass Taco Bell cheese and salt. Comes with a pack of cigarettes and a CPAP.

I was hoping they would jump into the fried-oreo bandwagon, but didn't happen.

[DMC]

I was hoping they would jump into the fried-oreo bandwagon, but didn't happen.

mmm fried oreos rolled in sprinkles and dipped in chocolate with Rocky Road ice cream and a bucket of lard.

[Wild Cobra]

Not going to happen. No one gives a shit if Hostess goes tits up. Those workers will all get free phones and free healthcare, and they will cause the makers of Lipitor to have to ramp up production.
Hence, the blue...

[DMC]

Hence, the blue...I don't take anything you say seriously tbh.

[DMX7]

From union wages to wal-mart is hardly a win.

Ironic that you're implicitly making the case for unions...

Anyway... these douchebag executives were paying themseves like oil barrons and planning to close plants anyway. Liquidating now and using the unions as a scapegoat to make themselves look less bad was probably the real motivation. The company was going down anyway. It had been taken over by private equity vulture capitalists who loaded it up with $860 million dollars of debt.

[LnGrrrR]

It's not a win for the CEO who was scheduled to make millions a year either, is it?

[Nbadan]

Before you go blaming the union for Hostess' demise, look at the facts.

In 1995 a company called International Bakeries, which was essentially a vulture capital arm of a computer company called Data Processing Financial and General Corporation, went on a massive spending spree. They not only bought Hostess but the San Francisco French Bread Company, John J. Nissen Baking Company, Drake's, My Bread Company, and tons of other companies.

They did this by borrowing like batshit crazy and eventually defaulted on their loans, leading to bankruptcy in 2004.

In 2009 they emerged from bankruptcy by BORROWING MORE FUCKING MONEY. They borrowed from Ripplewood Holdings, Silver Point, Monarch, and GE Capital. All these loans caused more payments and more interest accruing, leading to more and more debt. It was this debt that caused their collapse.

If it hadn't been for easy credit, merger mania, leveraged buyouts, and greedy conglomerates whose philosophy was "if you can't beat them buy them out," then all the little brands (including Hostess) that this group of predators bought with borrowed money might still be small and innovative enough to survive financial hard times with little or no debt of their own.

So always remember: it wasn't the unions that killed the Twinkie, it was the modern vulture capitalist culture.

[Wild Cobra]

It just is coincidence that Hostess was unable to fill orders, and not make financial commitments. The strike had nothing to do with that, right?

[mouse]

it won't rot in 30 years. Fungi and bacteria, smarter

According to Wild Cobra and Random Guy just under two billion years the Twinkies should grow legs and become a human 25 Million years later.

[DMC]

According to Wild Cobra and Random Guy I just under two billion years the Twinkies should grow legs and become a human 25 Million years later.

Care to predict when you will complete that feat?

[Wild Cobra]

g9wwt0SmDSk

[ElNono]

^ Gregory joined the company with a $100,000/month salary. This is a company that was already deep in the red.

This is another problem in Corporate America... rewarding abject failure with top dollars.

[Wild Cobra]

^ Gregory joined the company with a $100,000/month salary. This is a company that was already deep in the red.

This is another problem in Corporate America... rewarding abject failure with top dollars.
Yes, I understand that is your perception. Your typical "blame the rich" knee-jerk reaction. Do you realize how many CEO's they fired and hired trying to get back in the black? If anything, they should have found a better one that asked for a larger salary.

Just how is that $1.2 million annual salary going to make a difference for a company with 18,500 employees?

Is it possible that such talent is next to impossible to find at a lower salary? It would be like asking you to work for $8/hr for your job skills.

[DMX7]

g9wwt0SmDSk

Incredibly fishy story. 30% of 18500 workers is not irreplaceable. Incredibly mismanaged debt ridden company and naturally the CEO doesn't share in the pain.

[ChumpDumper]

Yes, I understand that is your perception. Your typical "blame the rich" knee-jerk reaction. Do you realize how many CEO's they fired and hired trying to get back in the black? If anything, they should have found a better one that asked for a larger salary.

Just how is that $1.2 million annual salary going to make a difference for a company with 18,500 employees?

Is it possible that such talent is next to impossible to find at a lower salary? It would be like asking you to work for $8/hr for your job skills.The six CEO's they went through were all richly rewarded for their incompetence.

[ploto]

So always remember: it wasn't the unions that killed the Twinkie, it was the modern vulture capitalist culture.

Where, oh where, have I heard other stories like this...

[ElNono]

Yes, I understand that is your perception. Your typical "blame the rich" knee-jerk reaction. Do you realize how many CEO's they fired and hired trying to get back in the black? If anything, they should have found a better one that asked for a larger salary.

Just how is that $1.2 million annual salary going to make a difference for a company with 18,500 employees?

Is it possible that such talent is next to impossible to find at a lower salary? It would be like asking you to work for $8/hr for your job skills.

I'm certainly blaming incompetence rewarding incompetence. They don't have to be "rich".

You don't need to pay a guy $1.2 million a year to send the company into liquidation...

[ElNono]

The six CEO's they went through were all richly rewarded for their incompetence.

Exactly. Upper management never felt the pinch.

[pass1st]

http://www.ebay.com/sch/i.html?_sacat=0&_from=R40&_nkw=twinkies&_sop=16

Get them while they're still 50 dollars a box!

[boutons_deux]

Classic P/E scam.

Flipped thru several p/e outfits, each one extracting wealth (not "makers"), until the company is bankrupt, then the 1% and Repubs blame it all on the (unionized) workers, slandered as "takers".

[Th'Pusher]

Yes, I understand that is your perception. Your typical "blame the rich" knee-jerk reaction. Do you realize how many CEO's they fired and hired trying to get back in the black? If anything, they should have found a better one that asked for a larger salary.

Just how is that $1.2 million annual salary going to make a difference for a company with 18,500 employees?

Is it possible that such talent is next to impossible to find at a lower salary? It would be like asking you to work for $8/hr for your job skills.
You'd take it directly in your butthole from a 1%'r if you had the opportunity. That much is clear.

[spursncowboys]

It seems they are both to blame. drivers not being able to deliver bread and twinkies is unproductive and definitely not cost efficient. The management should have never agreed to that. Downsizing should not be the first cost cutting process. It should be the last.

[DMC]

^ Gregory joined the company with a $100,000/month salary. This is a company that was already deep in the red.

This is another problem in Corporate America... rewarding abject failure with top dollars.
Sounds like the NBA

[DMC]

You'd take it directly in your butthole from a 1%'r if you had the opportunity. That much is clear.

The real 1%ers wouldn't give you an option.

[boutons_deux]

Hostess seeks bonuses for 'key managers' in liquidation

The 82-year-old Hostess wants permission to pay senior management a bonus of up to 75 percent of their annual pay so they will stay on and help wind-down the business.

http://my.chicagotribune.com/#section/545/article/p2p-73377920/

iow, gotta retain the (p/e-installed) "talent" to suck out extract every last $ of wealth as the ship goes down. Wealth extraction, not corporate success, was always the objective, through 6 p/e flippings.

seems like the bonuses total $1.75M

[boutons_deux]

judge forces hostess + union into arbitration

[boutons_deux]

The Wall Street Journal described the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union as “The union that brought the 85-year-old baker of Twinkies and Wonder Bread to its knees.”

Over at RedState, a headline tried to mix anti-union sentiment with conservative humor: “The Demise of Twinkies? Yes, It’s True. Parasitic Unions Kill Their Hosts (or, in this case, Hostess).”

Criticism of the Hostess workers seems to be manifested by a more subtle form of union bashing. It’s not that unions are greedy, it’s that they are outmoded, and the Hostess crisis is emblematic of organized labor’s precipitous decline. They are dying because workers don’t like them anymore (so this argument goes), precisely because of situations akin to what is unfolding at Hostess. As Diana Reese noted in the Washington Post, quoting the writer Donna Trussell, “Unions clung to an organizational model more suited to a 19th-century economy than the one we have now. That’s why they’ve lost so many members. When unions protect only their own, and leave over 90 percent of the workforce twisting in the wind, they will inspire more envy than support. Adapt or die.”

The labor economist for the Heritage Foundation makes a similar argument at the National Review: “A unionized firm takes longer to respond to changing market conditions … Over time they wither away. This is why union membership hit a record low in 2012.”

As these conditions lingered the workforce agreed to massive pay and benefit cuts in an attempt to keep the company afloat. One 14-year veteran of the company describes the $150 million annual givebacks the union agreed to: “In 2005, before concessions I made $48,000, last year I made $34,000.” Pensions and healthcare were cut as well, with labor’s total loss equaling $110 million annually.

But as we’ve seen, it wasn’t the unions who were inflexible or unwilling to make sacrifices for the good of the company. “In effect, the union, should they give more concessions, is becoming a major investor without representation,” says Shaiken. “Unless they get seats on the board or some other form of input.” (The most recent deal included a minority stake in the company; it remains to be seen if the company is willing to offer greater control to the workers in exchange for more givebacks.)

http://www.alternet.org/news-amp-politics/how-vulture-capitalists-killed-twinkie

Blaming unions EXCLUSIVELY and VOCIFEROUSLY for the Hostess' decline while not even mentioning the mismanagement by several well-paid p/e predators is nothing but VRWC propaganda in the extremely successful War on Employees.

[CosmicCowboy]

yawn

[Blake]

dang bakers union..

Always asking for more dough

[Th'Pusher]

yawn

Doyou not feel there is any culpability on management side? The company failed only because they could not meet union demands?

[boutons_deux]

"Doyou not feel there is any culpability on management side"

obvioiusly not. Just another employer biased against all employees.

[CosmicCowboy]

"Doyou not feel there is any culpability on management side"

obvioiusly not. Just another employer biased against all employees.




You are so full of shit. I never said there was no management culpability, but they had a failing union based business model with a product line that is under attack from all sides (sugary snacks). It was change or die.

[boutons_deux]

"union based business model"

wtf is that?

Their business model was selling a stagnant, ancient line of junk food-like substances, worsened by p/e predators flipping them to extract $Ms.

[Wild Cobra]

You are so full of shit. I never said there was no management culpability, but they had a failing union based business model with a product line that is under attack from all sides (sugary snacks). It was change or die.
This is quite true. The growing push for healthier eating had to have a great impact on their business.

[Winehole23]

Hostess first entered bankruptcy in 2004, when it was known as Interstate Bakeries. During its five years in Chapter 11, the firm obtained concessions from its unions worth $110 million a year. (http://bit.ly/WnUt1q) The unions accepted layoffs that brought the workforce down to about 19,000 from more than 30,000. There were cuts in wages, pension and health benefits. The Teamsters (http://www.latimes.com/topic/career-workplace/unions/international-brotherhood-of-teamsters-ORCIG0009.topic) committed to negotiations over changes in antiquated work rules. The givebacks helped reduce Hostess' labor costs to the point where they were roughly equal to or even lower than some of its major competitors'.


But the firm emerged from bankruptcy with more debt than when it went in — in with $575 million, out with $774 million, all secured by company assets. That's pretty much the opposite of what's supposed to happen in bankruptcy. By the end, there was barely a spare distributor cap in the motor pool that wasn't mortgaged to the private equity firms and hedge funds holding the notes (and also appointing management).


As management experts such as Peter Drucker have observed, the goal of a successful business must be to find and serve customers. Do that, and the numbers take care of themselves. The Hostess approach was entirely backward — meeting the numbers became Job One, and figuring out how to grow the business became Job None.


The post-bankruptcy leadership never executed a growth strategy. It failed to introduce a significant new product or acquire a single new brand. It lagged on bakery automation and product R&D, while rivals such as Bimbo Bakeries (http://www.latimes.com/topic/economy-business-finance/consumer-goods-industries/food-industry/grupo-bimbo-ORCRP000017403.topic) USA built research facilities and hired food scientists to keep their product lines fresh. At the time of the 2004 bankruptcy, Hostess was three times the size of Bimbo. Today it's less than half Bimbo's size. (Bimbo, which has been acquiring bakeries such as Sara Lee and Entenmann's right and left, might well end up with Hostess' brands.)
Hostess contended its biggest burden came from the multi-employer pension plans covering its unionized employees. Its contention is that these plans are designed so that when any employer goes out of business or otherwise withdraws, its obligations to its former workers are inherited by the companies that remain.


Consequently, Hostess says, a large portion of its required pension contributions benefit employees of other long-departed firms. This claim has been swallowed whole by Hostess' mourners, but it's fishy.


For one thing, many Hostess competitors contribute to similar plans, some at an even higher rate than Hostess. For another, the real problem is that for years the employers allowed the pension plan to become underfunded, either by skipping required contributions while they were in business or raiding the fund to pocket supposedly excess assets that proved to be not so excess. Hostess is guilty of the same practice.


In any event, the $989 million in pension liabilities Hostess ended up owing various union funds, according to its bankruptcy filing, didn't accumulate in secret, like termite damage. It accrued because Hostess and its sister bakeries judged their retirement obligations to be relatively unimportant in the grand scheme of things. Now that the bill has come due, Hostess blames the workers for demanding what they were promised.

http://www.latimes.com/business/la-fi-hiltzik-20121125,0,966735.column

[Winehole23]

Just before declaring bankruptcy for the second time in eight years Jan. 11, Hostess trebled the compensation (http://bit.ly/TkYSUv) of then-Chief Executive Brian Driscoll and raised other executives' pay up to twofold.At the same time, the company was demanding lower wages from workers and stiffing employee pension funds of $8 million a month in payment obligations.

Hostess management hasn't been able entirely to erase the paper trail pointing to its own derelictions. Consider a 163-page affidavit filed as part of the second bankruptcy petition.


There Driscoll outlined a "Turnaround Plan" (http://bit.ly/WHqC9j) to get the firm back on its feet. The steps included closing outmoded plants and improving the efficiency of those that remain; upgrading the company's "aging vehicle fleet" and merging its distribution warehouses for efficiency; installing software at the warehouses to allow it to track inventory; and closing unprofitable retail stores. It also proposed to restore its advertising budget and establish an R&D program to develop new products to "maintain existing customers and attract new ones."


None of these steps, Driscoll attested, required consultation with the unions. That raises the following question: You mean to tell me that as of January 2012, Hostess still hadn't gotten around to any of this?

same

[CavsSuperFan]

Always asking for more dough

Not really…Their salaries were cut from 55k to 35k and management wanted another pay cut…Yet the executives voted themselves pay raises, better pension and health benefits….

[boutons_deux]

You are so full of shit. I never said there was no management culpability, but they had a failing union based business model with a product line that is under attack from all sides (sugary snacks). It was change or die.

"failing union based business model"

their business model was no new products to update their joke of a junk-food, pathogenic garbage product line, while p/e vultures sucked the company dry. Had NOTHING to do with WTF is "failing union based business model"

[boutons_deux]

Not really…Their salaries were cut from 55k to 35k and management wanted another pay cut…Yet the executives voted themselves pay raises, better pension and health benefits….

employees had already taken a pay cut of $100M+/year, while the p/e puppet execs got and still get $Ms more in compensation, to "retain the mgmt talent during their mgmt-inflicted bankruptcy wind-down".

typical p/e screw job, just like Bishop Gecko's BAIN does.

[TeyshaBlue]

same

This: "None of these steps, Driscoll attested, required consultation with the unions. That raises the following question: You mean to tell me that as of January 2012, Hostess still hadn't gotten around to any of this?"

[LnGrrrR]

Seriously, if your business is having issues, and you're asking employees to take a pay cut, then giving your CEOs and managers raises at the same time probably isn't good business strategy. :lol

[boutons_deux]

"good business strategy."

p/e business strategy is to suck wealth out of a takeover target. The viability of the company is simply not their priority.

[Nbadan]

Richer screws the poorer again.....

Hostess Workers' Pension Money Diverted For Other Uses: Report



Hostess Brands acknowledged for the first time in a news report Monday that the company diverted workers' pension money for other company uses.

The bankrupt baker told The Wall Street Journal that money taken out of workers' paychecks, intended for their retirement funds, was used for company operations instead. Hostess, which was under different management at the time the diversions began in August 2011, said it does not know how much money it took.

"It's not a good situation to have," Hostess CEO Gregory Rayburn told the WSJ.

"Whatever the circumstances were, whatever those decisions were, I wasn't there," Rayburn added. As the founder and owner of Kobi Partners, a restructuring advisory firm, Rayburn was appointed acting CEO in March 2012.

More at: http://www.huffingtonpost.com/2012/12/10/hostess-pensions-diverted_n_2271868.html

Some say this is capitalism at its best!

[Wild Cobra]

We have known for decades that no pension fund is safe.

What's the news here?

[boutons_deux]

stealing employee pension funds is just another way p/e hyenas destroy companies while sucking out a maximum of wealth.

[CosmicCowboy]

Federal pensions aren't funded at all.

[coyotes_geek]

stealing employee pension funds is just another way p/e hyenas destroy companies while sucking out a maximum of wealth.

Yet another reason why unions, not companies, need to be the ones responsible for running pension programs for union members.

[Sportcamper]

Federal pensions aren't funded at all.

Say what? Nobody pays as they go? How does the pension collect interest & grow?

[boutons_deux]

Yet another reason why unions, not companies, need to be the ones responsible for running pension programs for union members.

yet another reason why ALEC/VRWC/UCA have been and are intent on destroying unions.

[CosmicCowboy]

Say what? Nobody pays as they go? How does the pension collect interest & grow?

They are unfunded defined pension plans. This isn't even counted as part of the 16 trillion in debt. They will just borrow or print the money when it's time to pay up.

[CosmicCowboy]

Defined pension plans are being phased out in the private sector and even public sector is finally realizing how fucked they are.

[coyotes_geek]

yet another reason why ALEC/VRWC/UCA have been and are intent on destroying unions.

If that's indeed true, then what better way for unions to protect themselves than by taking over control and full responsibility for pension programs?

[boutons_deux]

If that's indeed true, then what better way for unions to protect themselves than by taking over control and full responsibility for pension programs?

very few workers would benefit, because very few works are in unions, thanks to VRWC union busting and slandering.

"Union membership in the private sector has fallen under 7%[2] (http://en.wikipedia.org/wiki/Labor_unions_in_the_United_States#cite_note-BLS01272012-2) — levels not seen since 1932".

http://en.wikipedia.org/wiki/Labor_unions_in_the_United_States

As unions are busted, esp in "right to get paid less" states, general wages fall.

[cantthinkofanything]

very few workers would benefit, because very few works are in unions, thanks to VRWC union busting and slandering.

"Union membership in the private sector has fallen under 7%[2] (http://en.wikipedia.org/wiki/Labor_unions_in_the_United_States#cite_note-BLS01272012-2) — levels not seen since 1932".

http://en.wikipedia.org/wiki/Labor_unions_in_the_United_States

As unions are busted, esp in "right to get paid less" states, general wages fall.

I can't figure if you're more of a ding dong or a twinkie.

[scott]

These employees should have worked for free. Just too jealous of the wealthy, I suppose.

[Th'Pusher]

They are unfunded defined pension plans. This isn't even counted as part of the 16 trillion in debt. They will just borrow or print the money when it's time to pay up.
Are these expenses included in proposed/projected budgets?

[coyotes_geek]

very few workers would benefit, because very few works are in unions, thanks to VRWC union busting and slandering.

"Union membership in the private sector has fallen under 7%[2] (http://en.wikipedia.org/wiki/Labor_unions_in_the_United_States#cite_note-BLS01272012-2) — levels not seen since 1932".

http://en.wikipedia.org/wiki/Labor_unions_in_the_United_States

As unions are busted, esp in "right to get paid less" states, general wages fall.

Completely irrelevant to the point of unions acting in the best interests of whatever membership they do have.

[boutons_deux]

Twinkie CEO Admits Company Took Employees Pensions and Put It Toward Executive Pay

Twinkie-maker Hostess continues to screw over its workers. The company is in the process of complete liquidation and 18,000 unionized workers are set to lose their jobs. More troubling – they could lose their pensions.


According to a report by the Wall Street Journal , Hostess’ CEO, Gregory Rayburn, essentially admitted that his company stole employee pension money and put it toward CEO and senior executive pay (aka “operations”). While this isn't technically illegal, it's another sleazy theft by Hostess executives - who've paid themselves handsomely while running their company into the ground. Just last month, a judge agreed to let Hostess executives suck another $1.8 million out of the bankrupt company to pay bonuses to CEOs.


If there's no way to recover the money for the Hostess pension plans for workers, then the Pension Benefit Guaranty Corp. will have to foot the bill to make sure workers get at least some of the retirement money they paid in.


Hostess shows us clearly what Bain-style predatory capitalism is all about: big bucks for the very few rich executives, layoffs and poverty for the workers and their communities.
http://www.alternet.org/corporate-accountability-and-workplace/twinkie-ceo-admits-company-took-employees-pensions-and-put-it

Wealth transfer from taxpayers to private equity hyenas.

[Wild Cobra]

Put him in jail...

[Sportcamper]

Hostess is bringing back Twinkies next week.
But employees are complaining about massive wage cuts. They're mad.
A spokesperson for the employees said, "We can't tighten our belts. We eat Twinkies. It's impossible."

[DMX7]

Hostess is bringing back Twinkies next week.
But employees are complaining about massive wage cuts. They're mad.
A spokesperson for the employees said, "We can't tighten our belts. We eat Twinkies. It's impossible."

Zing!

[boutons_deux]

Completely irrelevant to the point of unions acting in the best interests of whatever membership they do have.

When unions are small, they have insufficient power for "acting in the best interests of whatever membership"