Unions Kill The Twinkie

[idiom]

Why don't the 18,000 employees buyout the company?

 

[Tpoints]

Why don't the 18,000 employees buyout the company?

yeah, good question!!

 

[JK/SEA]

Why don't the 18,000 employees buyout the company?

its early in this. I would imagine this may be brought up. Not sure this has ever happened successfully. Seems i remember something years ago about employees buying out their company somewhere...at least to my current recollection. OK, off to research this idea.

 

[tod evans]

Why don't the 18,000 employees buyout the company?

I think if you asked all those folks if they were willing to put up the equity in their collective homes to back "The Company" even with management gone it'd be a hard sell....

 

[Tpoints]

its early in this. I would imagine this may be brought up. Not sure this has ever happened successfully. Seems i remember something years ago about employees buying out their company somewhere...at least to my current recollection. OK, off to research this idea.

My guess is Hostess isn't expected to be profitable, or has too much debt. Otherwise why wouldnt ANY private investor step up to buy them out?

 

[tod evans]

JK,

Would you put up your money to back a buyout under the conditions as they are now without the suits?

 

[JK/SEA]

JK,

Would you put up your money to back a buyout under the conditions as they are now without the suits?

under these conditions?....call me optomistic, but what you can do is get yourself a sales manager that isn't an idiot and knows how to get contracts. Upgrade equipment where needed. You don't need the fancy gizmos like Woodson Robotics just yet. Re-negotiate with the union. Get back your most experienced workers where possible. As someone who has seen both sides of the coin, and has the experience to know what needs to be done, i believe Hostess could come back with better formulas for Twinkies and all the other products they make. Perhaps eliminate some things, and bring in new stuff, and market the shit out of it. This company needs fresh ideas and the Twinkie brand could be the team leader.

But...who knows...maybe the Twinkie label will get sold to microsoft. and Bill Gates will build new plants in Africa...

 

[FindLiberty]

Goodie goodie goodie,

goodie goodie greedy,

goodie greedy greedy,

greedy greedy greedy,

greedy goody gone.

+ + +

I used to enjoy Hostess Chocolate Cupcakes, but then the taste seemed to be swerving towards the dark side and then back again over and over with their "extra chocolaty" (flavoring experiments?). This caused me to throw out the rest of the entire box after discovering another family member had already dumped one into the sink, apparently after only trying a single bite. I've been prepared for them to just fade away for about a year now.

But they’ll be back.

There was a similar story from Chicago, IL a few years ago. After a short bankruptcy pause, Fannie May “Pixies” were back on the shelves again, but apparently manufactured elsewhere at a lower cost. http://en.wikipedia.org/wiki/Fannie_May

 

[JK/SEA]

Goodie goodie goodie,

goodie goodie greedy,

goodie greedy greedy,

greedy greedy greedy,

greedy goody gone.

+ + +

I used to enjoy Hostess Chocolate Cupcakes, but then the taste seemed to be swerving towards the dark side and then back again over and over with their "extra chocolaty" (flavoring experiments?). This caused me to throw out the rest of the entire box after discovering another family member had already dumped one into the sink, apparently after only trying a single bite. I've been prepared for them to just fade away for about a year now.

But they’ll be back.

There was a similar story from Chicago, IL a few years ago. After a short bankruptcy pause, Fannie May “Pixies” were back on the shelves again, but apparently manufactured elsewhere at a lower cost. http://en.wikipedia.org/wiki/Fannie_May

quite possibly. And i agree about the quality. New formulas for all the brands is in order. This isn't the Unions job though. The owners need to realize that. Hell, they probably do but don't give a shit.

 

[kylejack]

Let me not mince words; unions are the sign of the end of a product(s). When employees "representatives" spend more time trying to war with management and vise versa, who has time to care about making anything worth buying.

Current unions are micro governments who live by taxation called dues. They follow all the same tenants: represenatives, voting and corruption.

You're committed to an ideology without considering specific circumstances. This company went through bankruptcy in 2004. After that bankruptcy, the workers agreed to work for less for the good of the company. The company continued to lose money because it had bad management and is now in another bankruptcy. The company gave 300% raises to top executives and now ask the employees, who already took a pay cut in the last bankruptcy, to take an 8% pay cut and 30% benefits cut. Furthermore, the company has stopped contributing to the pensions program it is contractually-obligated to contribute to (weren't you just talking about how much you like contracts?) to the tune of $160M. 92% of the employees voted not to accept the pay cuts. The company will now be liquidated.

The free market is not a slave ship. You don't get to employ people for less than they're willing to work for. The failure of this company rests entirely on the terrible managers and the vulture capitalists ripping it apart.

 

[AuH20]

You're committed to an ideology without considering specific circumstances. This company went through bankruptcy in 2004. After that bankruptcy, the workers agreed to work for less for the good of the company. The company continued to lose money because it had bad management and is now in another bankruptcy. The company gave 300% raises to top executives and now ask the employees, who already took a pay cut in the last bankruptcy, to take an 8% pay cut and 30% benefits cut. Furthermore, the company has stopped contributing to the pensions program it is contractually-obligated to contribute to (weren't you just talking about how much you like contracts?) to the tune of $160M. 92% of the employees voted not to accept the pay cuts. The company will now be liquidated.

The free market is not a slave ship. You don't get to employ people for less than they're willing to work for. The failure of this company rests entirely on the terrible managers and the vulture capitalists ripping it apart.

That's all fine and dandy, but the owners of these particular endeavors assume all the risks of keeping a business afloat. Ownership and labor are not equal, unless labor is willing to take a co-owner role with the company. So the top executive pay raises aren't as alarming with this fundamental understanding. Mercenaries do not dictate the direction of a company, management does.

 

[kylejack]

That's all fine and dandy, but the owners of these particular endeavors assume all the risks of keeping a business afloat. Ownership and labor are not equal, unless labor is willing to take a co-owner role with the company. So the top executive pay raises aren't as alarming with this understanding.

We are all free individuals. If someone offers us too little money to work for them, it is our right to tell them to go pound sand, their risk be damned. We are not slaves or servants. Let them hire someone else if they think they're paying the correct market wage. If they can't find qualified people to hire at that price, I guess they've got a pretty lousy business plan not based on reality.

 

[AuH20]

We are all free individuals. If someone offers us too little money to work for them, it is our right to tell them to go pound sand, their risk be damned. We are not slaves or servants. Let them hire someone else if they think they're paying the correct market wage. If they can't find qualified people to hire at that price, I guess they've got a pretty lousy business plan not based on reality.

In this particular instance, it's not so much that the hourly wages are unsustainable but rather the benefits. Many of these industries back-loaded their CBAs to appease their labor base, which ultimately distorted their long term growth.

 

[kylejack]

In this particular instance, it's not so much the hourly wages as it is the benefits.

And yet the company's best final offer includes an 8% pay cut.

 

[Origanalist]

You're committed to an ideology without considering specific circumstances. This company went through bankruptcy in 2004. After that bankruptcy, the workers agreed to work for less for the good of the company. The company continued to lose money because it had bad management and is now in another bankruptcy. The company gave 300% raises to top executives and now ask the employees, who already took a pay cut in the last bankruptcy, to take an 8% pay cut and 30% benefits cut. Furthermore, the company has stopped contributing to the pensions program it is contractually-obligated to contribute to (weren't you just talking about how much you like contracts?) to the tune of $160M. 92% of the employees voted not to accept the pay cuts. The company will now be liquidated.

The free market is not a slave ship. You don't get to employ people for less than they're willing to work for. The failure of this company rests entirely on the terrible managers and the vulture capitalists ripping it apart.

Im have to agree with Awake here. Once this conflict starts, the whole thing goes in the shitter and all that matters from then on is who won the battle. Forget about delivering a product that people need and making a profit.

 

[AuH20]

And yet the company's best final offer includes an 8% pay cut.

But a 30% reduction on the benefits. The benefit structure is strangling many of these corporations because they were foolish and didn't look ahead. They appeased labor with unsustainable deals going forward.

 

[kylejack]

But a 30% reduction on the benefits. The benefit structure is strangling many of these corporations because they were foolish and didn't look ahead. They appeased labor with unsustainable deals going forward.

If it was about the benefits, they should have made another offer that only cut the benefits and kept wages the same. But they didn't, the employees were not impressed, and the business model is not sustainable. The hedge fund brought in a "turnaround specialist" but they should have brought in a pastry executive, who understood the way the market was going. The employees made concessions in the last BK. After that it was a clean slate, and it was up to management to run a profitable company. They failed.

 

[AuH20]

Congratulations, my fellow Americans! We will be paying for Hostess for the rest of our natural lives.

http://www.pionline.com/article/201...terminate-pension-plan-as-part-of-liquidation

Hostess Brands Inc., Irving, Texas, will terminate its defined benefit plan, and the Pension Benefit Guaranty Corp. will assume its liabilities, said Lance Ignon, Hostess spokesman.


The news follows Hostess' announcement on Friday that it will close its business and sell off all its assets.

Hostess suspended payments to the 42 multiemployer pension plans to which it contributes in August 2011. “For active employees, the circumstances differ for each MEPP, so (participants) should contact the administrator of the MEPP” in which they participate, Mr. Ignon said in an e-mail, citing an employee Q&A document. He could not provide further information by press time.

The company's IBC Defined Benefit Plan had about $56 million in assets and $111 million in liabilities as of April 30, according to the PBGC.

“PBGC exists to safeguard retirement security in uncertain times, and that's what we'll do for the 2,300 men and women in Hostess's single-employer plan if the company liquidates. The plan is underfunded by about $55 million,” said J. Jioni Palmer, PBGC spokesman, in an e-mailed statement.

“Hostess belongs to 42 multiemployer plans, but its liquidation wouldn't cause those plans to immediately become insolvent. PBGC doesn't take responsibility for multiemployer plans, but instead gives financial assistance to the plans that can't pay benefits.” Mr. Palmer said.

I have a strange suspicion the PBGC isn't solvent.

 

[Lucille]

Hostess Shrugged?
http://www.lewrockwell.com/blog/lewrw/archives/126597.html

 

[AuH20]

Management and labor, both guilty in the demise of Hostess:

http://www.businessinsider.com/how-workers-and-management-both-caused-the-fall-of-hostess-2012-11

Here's how the pioneering company and its workers failed to keep up with the times:

Pension burdens: Mufson notes that the company had 372 collective bargaining agreements with a dozen unions and had roughly $2 billion in unfunded pension liabilities to its various unions' workers, but it brought in a disappointing $2.5 billion in revenue in 2011.

Labor rules: Kaplan noted how that Hostess had ludicrous work rules based on labor contracts—including the requirement of separate drivers for deliveries of such goodies as Yankee Doodles and Nature's Pride Nutty Oat—which exacerbated their huge problem of high labor costs.

Crippling debt: Kaplan detailed how over the years labor unions had successfully negotiated generous pensions and health care benefits that increasingly ignored shifts in the marketplace. So once sales began to decline in the 1980s and '90s as consumers found healthier alternatives to snack cakes and white bread, debt started piling up to the tune of about $450 million by the first bankruptcy in 2004.

In 2009, after five years of restructuring, the company's total debt load was nearly $670 million despite winning concessions from the unions and new capital from investors as it became a private entity.

And by the time the company filed bankruptcy in January, the company had lost $250 million in the less than three years.

Stale products: A source told Mufson that even the most popular food brands need reinvention every eight years or so, but the company has been riding on the success of the Twinkie since its inception in 1933. Attempts to re-energize—such as bringing back the original banana-cream Twinkies and publishing "The Twinkies Cookbook"—flopped.

The mess led to the implosion of the company, as CNN Money reports. In September the 7,500 member International Brotherhood of Teamsters accepted a new contract with reduced wages and benefits, but the 5,000 member Bakers' union rejected the deal and eventually went on strike over contract negotiations.

The Teamsters accused the Bakers of pushing Hostess to the brink of liquidation, while the Bakers blamed management and the "Wall Street vulture capitalists in control" for the company's dire condition.

In the end all sides are blaming one another while the iconic company shuts its doors