Unions Kill The Twinkie

[BSU kid]

Greedy. Greedy. Greedy.

 

[angelatc]

you are wrong. Tells me you haven't done any research other than the mis-guided notion that 'unions are bad, management good'

It's true. I understand that you're passionate about this, but even the Teamsters agreed to the terms. The Bakers opted to strike instead.

I don't argue that bad management led them into reorg, but the Bakers Union led them into dissolution. But full disclaimer - I do think that unions are a burden on free markets.

 

[JK/SEA]

I was thinking about this today. I went to the store to buy some Twinkees (before they are no more) so I could give them to my Obama supporting friends with a note attached that says something to the effect of "Thanks to union shortsightedness, you will never be able to buy these again". Or perhaps just give it to them with a DVD of Ron Paul's last speech. Alas....I went to Kroger and there were no Twinkies. (Nothing but Little Debbies at that store). If anyone knows where I can still buy Twinkies in Nashville TN let me know. I think this is a great idea for a protest, but we only have a short time window to do it.

Blame mgmt. Try and get it straight please.

 

[crhoades]

We are now entering the Zombie apocalypse. No more twinkies. Only a few remaining snow balls! NOOOOOOO!!!!!

 

[AuH20]

Make concessions or lose your job? Regardless of union mismanagement, the cost benefit analysis is extremely obvious for everyone but these lemmings following union management's myopic agenda.

 

[angelatc]

Blame mgmt. Try and get it straight please.

Did you lose your job today?

 

[jmdrake]

Blame mgmt. Try and get it straight please.

Oh I'm sure there's plenty of blame to go around. But does it make sense to you to go on strike if management tells you "We're in the red and we can't afford to pay you and we are about to close down if we don't get a deal"?

 

[angelatc]

Make concessions or lose your job? Regardless of union mismanagement, the cost benefit analysis is extremely obvious for everyone but these lemmings following union management's myopic agenda.

And because they forced the company out of reorg, they can't pay vendor bills or severance. The last Hostess snowball won't be on the shelves.

 

[Keith and stuff]

owners and management killed this company. Ask me how i know. I worked for Interstate Brands for 8 years as a dough mixer for Wonderbread/Hostess. All you who besmirch the Union don't know what the fuck you're talking about.

Good point. The owners decided to allow unions in the company. That is something which may be prevented. It wasn't prevented. The blame goes on the owners and management for that mistake.

 

[jmdrake]

you are wrong. Tells me you haven't done any research other than the mis-guided notion that 'unions are bad, management good' bullshit.

Sounds like a FOX news meme doesn't it?

Fill in the blank. The benefit to the baker's union strike was ...............................?

 

[angelatc]

Guys, if he lost his job today, we don't need to berate him. He's our friend. Cut him some slack.

 

[AuH20]

It's true. I understand that you're passionate about this, but even the Teamsters agreed to the terms. The Bakers opted to strike instead.

I don't argue that bad management led them into reorg, but the Bakers Union led them into dissolution. But full disclaimer - I do think that unions are a burden on free markets.

Union management say jump. 18,000 workers eagerly say how high? 18,000 workers lose their jobs permanently. You can't fix stupid.

 

[Lucille]

Very sad.

It's more complicated than just greedy unions, although back-breaking union pensions were a major factor. For a closer look:

http://www.zerohedge.com/news/2012-11-16/hostess-liquidation-curious-cast-characters-twinkie-tumbles

Perhaps one of the most interesting aspects of the just announced Hostess liquidation, one that will be largely debated and discussed in the media, or maybe not at all, is the curious cast of characters and the peculiar history of this particular bankruptcy. Some may not be aware that the company's Chapter 11 (or colloquially known as 22) bankruptcy filing this January, which today became a Chapter 7 liquidation, was the second one in the company's recent history, with Hostess, previously Interstate Bakeries, emerging from its previous protracted multi-year bankruptcy in 2009. What is curious is that its emergence had all the drama of a anti-Mitt Romney PAC funded thriller, with a PE firm, in this case Ripplewood holdings, injecting $130 million in order to obtain equity control of Hostess as it was emerging last time. There were also more hedge funds, investment banks, strategic buyers, politicians involved in this particular story than one can shake a deep fried numismatic value Twinkie at. More importantly, however, as America has been habituated following the last season of the reality TV show known as the presidential election, if Private Equity then "bad." Only this time there is a twist: because it wasn't really PE that was the pure evil in the Obama long-term campaign, it was associating PE with Republicans, and thus: with jobs outsourcing. And here comes the Hostess twist: because Tim Collins of Ripplewood, was a prominent Democrat, a position which allowed him to get involved in the first bankruptcy process in the first place, due to his proximity with the Teamsters' long-term heartthrob Dick Gephardt (whose consulting group just happens to also be an equity owner of Hostess). In other words, the traditional republican-cum-PE scapegoating strategy here will be a tough one to pull off since the narrative collapses when considering that it was a Democrat who rescued the firm, only to see it implode in a trainwreck that has resulted in the liquidation of a legendary brand, and 18,500 layoffs.

But it only gets better. Because the full cast of characters involved here is quite stunning
[...]

[...]
The rest of the story is your typical post-emergency NewCo gone horribly wrong with a prominent role for the Snafu here reserved to Hostess restructuring banker Miller Buckfire for not cutting enough of the firm's pre-petition debt, with the straw that broke the camel's back being, what else, unfunded pension liabilities.
[...]
There is much more to this story, but the ending is well-known to all, and it is not a happy one.

End result: a near total loss for everyone involved, except the secured creditors of course, who will now get pennies on the dollar, or perhaps even par, for their claims when all is said and done.

Sadly, in many ways Hostess is now indicative of that just as insolvent larger corporation, the USA, whose insurmountable balance sheet liabilities will be the eventual catalyst for its collapse, but only once the Income Statement and the Cash Flow sheet join in. For now, the Fed provides the flow needed to avoid the day of reckoning, but everything ends eventually.

In the meantime, what the Hostess story will hopefully teach the always gullible public, is that nothing is ever black or white, and there are numerous shades of gray in every story: even one in which an "evil" PE firm is unable to come to resolution with labor unions, despite the man in charge of it all being a prominent democrat. Because when it comes to money other things such alliances, ideology and certainly politics are always, always, secondary. Sadly, ever more Americans will be forced to learn this lesson the hard way.

 

[Cowlesy]

The Democrats wants to make this an "evil PE firm" thing, except that, the PE Firm that bought the company to help it emerge from bankruptcy, is a huge Democratic donor/supporter, and worked with Dick Gephardt and his union connections to try and save the company.

So, they can'd do a "Oh it's the evil republican wall street people!" meme on this one.

Zerohedge, for once, has a pretty good bead on this.

http://www.zerohedge.com/news/2012-11-16/hostess-liquidation-curious-cast-characters-twinkie-tumbles

 

[JK/SEA]

It's true. I understand that you're passionate about this, but even the Teamsters agreed to the terms. The Bakers opted to strike instead.

I don't argue that bad management led them into reorg, but the Bakers Union led them into dissolution.

Interstate Brands ran the company like D.C runs the country....spending on a failed plan led to the downfall. Wonderbread/Hostess spent MILLIONS AND MILLIONS on high tech. high speed equipment that engineers couldn't figure out, leading to loss of contracts with companies like COSTCO. As a dough mixer i was working 12, 16, and a few times 24 hour shifts to help get my plant up and running along side my foremans and supervisors. Oven breakdowns, photo eye failures, conveyor breakage, and on and on and on. Lots of the doughs i made went to garbage. All the product in the non running ovens burned... garbage. It was a nightmare in my plant which finally closed. 40 million to build a plant now gone. Jobs gone. You gonna blame the Union?...gtfo.

This also went on in new plants in Nevada, and New England. The older plants where i started were making money. Everyone happy. Good hard working jobs went pffft....when the new plants closed.

 

[AuH20]

Interstate Brands ran the company like D.C runs the country....spending on a failed plan led to the downfall. Wonderbread/Hostess spent MILLIONS AND MILLIONS on high tech. high speed equipment that engineers couldn't figure out, leading to loss of contracts with companies like COSTCO. As a dough mixer i was working 12, 16, and a few times 24 hour shifts to help get my plant up and running along side my foremans and supervisors. Oven breakdowns, photo eye failures, conveyor breakage, and on and on and on. All the doughs i made went to garbage. All the product in the non running ovens burned... garbage. It was a nightmare in my plant which finally closed. 40 million to build a plant now gone. Jobs gone. You gonna blame the Union?...gtfo.

This also went on in new plants in Nevada, and New England. The older plants where i started were making money. Everyone happy. Good hard working jobs went pffft....when the new plants closed.

All true. But union management could have saved the day and rescued these jobs, instead of being obtuse. They decided to leave the field of play and in the process, threw their employees out to the street. Not strategically wise.

 

[pcosmar]

This also went on in new plants in Nevada, and New England. The older plants where i started were making money. Everyone happy.

Sounds like a good opportunity for folks to start their own business..

 

[VIDEODROME]

Could they have continued negotiating the contract without taking the step to go on strike?

 

[angelatc]

It is unthinkable to imagine an America that doesn't make Twinkies. Obama will need to step in, have the government assume a majority share and hand this firm over to the unions.

 

[Lucille]

It is unthinkable to imagine an America that doesn't make Twinkies. Obama will need to step in, have the government assume a majority share and hand this firm over to the unions.

DH and I were just saying that! And just like with Government Motors bailout, he'll screw the secured creditors in favor of the unions. Because contract law is what Obama says it is.