NBCDFW: Twinkies Maker Hostess Going Out of Business, CEO Blames Union Strike

[deejaydana]

Classic thinking from he Right, as wokers we should just take what our benevolent demigods gift us through their grace while they live in luxury upon Olympus.

I guess it's easier to think that the "right" believes this then look deeper into the particulars of this story. I feel sorry for the 11K plus people who weren't Union workers @ Hostess who were essentially held hostage during this and eventually lost their jobs. They had no say in how things went down. I'm sure some fault lies on either side but some of the Union rules that Hostess had to abide by were beyond non-competitive. It's increasingly untenable to demand employer consessions (or have leverage) when you're not in a skilled profession and globalization is rapidly leveling the marketplace for jobs well, everywhere (skilled and unskilled). Sorry that these folks are out of work just before the holidays. Some of them just pushed their hand too far and have to learn the hard way.

[twa]

So this is cool


as long as they don't uphold their contracts with their workers and as long as the workers have no recourse against drastic cuts and attacks on their wages and benefits. Gotcha.

Oh it's real cool to go bankrupt and have a court supervise your business for your creditors that already bailed your over priced employees out once

you do understand contracts are subject to the bankruptcy court....as are wages and benefits for ALL involved?

[CrabR]

on the other hand look how much The CEO and other execs took in bonus money from the company

[twa]

on the other hand look how much The CEO and other execs took in bonus money from the company

how much did they take since the prior bankruptcy?

[NoCalMike]

It looks like Hostess was headed out of business regardless of the Strike. The Strike may have sped things up anyone from 6-18mos ahead of schedule, but they were piss-poor management company, and because the strike came when things were falling apart anyway, it was a convenient scapegoat for the anti-union folks to latch onto and showcase.

http://www.politicususa.com/romney-v...ss-unions.html

Hostess Brands’ demise is a recurring story that should be well-known after Americans learned the predatory private equity tactics of Bain Capital during Willard Romney’s failed run for the White House. In fact, union president Richard Trumka pointed out that Wall Street investors that own Hostess were disinterested in the company’s success and cited similarities to the situation of Bain Capital and KB Toys in 2000. As a reminder, Bain Capital’s scheme was leveraging companies with crushing debt, cutting workers’ wages and benefits, and when the company can no longer repay their loans they go into bankruptcy, often more than once. Hostess is in bankruptcy for the second time since 2009 and a major factor in their inability to succeed is that over the past eight years, they were owned by Wall Street investors that were restructuring experts, managers from other non-baking food companies, and now a liquidation specialist. There was no plan for Hostess to succeed and it appears that was the objective all along.

Hostess’s failure was compounded by having six CEO’s in 8 years who had no experience in the bread or cake baking industry, and despite their financial woes, the company’s CEO got a 300% salary increase from $750,000 to $2,250,000, and other top executives received raises worth hundreds-of-thousands of dollars; all while the company was struggling. Instead of acknowledging the lack of competent leadership and exorbitant executive salaries as contributing to the company’s decision to close its doors, CEO Gregory Rayburn issued a statement saying, “We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike.” However, Rayburn and Hostess management claimed the strike would be responsible for closing plants even before there was a strike, and they had made plans to close plants whether or not workers accepted the Draconian wage and benefit cuts the company offered, or if they went on strike.

(more at link above)

[deejaydana]

^^^^^ You may want to check your math, not that it matters about assigning blame here but Hostess was lousy with leftward leaning Obama supporters at the top of the org chart.

[twa]

LOL at Trumka calling someone else a vulture or overpaid

[Larry]

^^^^^ You may want to check your math, not that it matters about assigning blame here but Hostess was lousy with leftward leaning Obama supporters at the top of the org chart.

Just out of curiosity, where to you get **** like this?

Is there some web site or some such where right wingers can type a few words into a search engine, and up pops carefully edited reasons why whatever you typed in, is caused by the vast liberal hoards?

[Monte51Coleman]

Twinkies likely to survive-

http://m.apnews.com/ap/db_268743/con...tguid=oPZBvXpI

[Thiebear]

Just like Bigbird, if its good, it will be taken on by someone that can make it work.

[deejaydana]

Just out of curiosity, where to you get **** like this?

Is there some web site or some such where right wingers can type a few words into a search engine, and up pops carefully edited reasons why whatever you typed in, is caused by the vast liberal hoards?

Actually I made the post to specifically upset your delicate sensibilities Larry. I keed of course. Here's one link, I'm sure you'll quickly dismiss of it:

http://www.zerohedge.com/news/2012-1...winkie-tumbles

[D'Pablo]

Actually I made the post to specifically upset your delicate sensibilities Larry. I keed of course. Here's one link, I'm sure you'll quickly dismiss of it:

http://www.zerohedge.com/news/2012-1...winkie-tumbles

I, for one, take your article and its source material very seriously. It paints a picture of a Democratic financier taking control of a failing company and, with union support, attempting to take it through managed bankruptcy. In the process, the financier's company infused 120 million dollars into the company and gained additional equity from two firms: Monarch and Silver Point. These two firms, as Hostess faced floundering sales, asked for more union concessions.

The story continues:

"The company was going to pieces -- again -- and Hostess filed for Chapter 11 protection -- again -- in January of this year. This time, though, the moneymen were no longer on the same page. As the majority equity holder, Ripplewood [the goofy union loving liberal equity folks] badly wanted to keep Hostess out of bankruptcy. It pleaded with the lenders [Monarch and Silver Point] to show flexibility, but they were not so inclined. They lenders held superior fiscal hands and had less downside if Hostess failed. In the event of a bankruptcy, given all the assets Hostess owned, the lenders would still walk away with millions."

Who are Monarch and Silver Point?

Silver Point: http://www.opensecrets.org/orgs/summ...?id=D000037584
Monarch: https://www.opensecrets.org/usearch/...cof=FORID%3A11

Turns out they're mostly GOP supporters.

[twa]

If the business model is unsustainable it must change or die...it was unsustainable and one union refused to change to benefit the others

the new investors asked for sacrifices just as the old ones did

[deejaydana]

If the business model is unsustainable it must change or die...it was unsustainable and one union refused to change to benefit the others

the new investors asked for sacrifices just as the old ones did

Exaclty. My point wasn't to call out who's at the top, it's irrelevant playing a blame game. The bottom line is Hostess was no longer competitive. The Union people just helped hasten a likely inevitable demise. And somebody needs to tell the dough heads that are going out and buying Twinkies as some sort of momento that another company will come along and buy that specific brand so we'll likely continue to see them on store aisles for the forseeable future.

[twa]

It will probably end up in Mexico with their lower priced sugar and labor or in right to work states