Unions Kill Hostess

[Kulindahr]

An iconic company we all know and some love is shutting down, permanently, this being its final bankruptcy of three in eight years. The final straw? Unions that refused to compromise, even though the company warned them it was teetering on the edge of no return.

... Hostess Brands, the bankrupt baker responsible for Twinkies, Wonder Bread and other goods. The company said Friday it has asked a bankruptcy judge for permission to go out of business and lay off 18,500 workers, blaming a labor strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.
. . . .
Texas-based Hostess, which has about $2.5 billion in sales, said it had suspended operations at all of its 33 plants around the United States as it moves to start liquidating assets. The expectation is that other baking companies or investors will scarf down the brands, giving its products a good chance at a new life under different ownership.

There are unions, and there are unions -- and plainly this one was too greedy, and now suffers the logical consequences of grasping at too much: instead of continuing working, albeit at lower wages, they are out of jobs, income reduced to zero.

And in all likelihood, their stubborness will cost the taxpayers as pensions will have to be covered.


read more: http://www.chicagotribune.com/busine...,3175964.story

[bw92116]

Good Lord, there are people who still eat that crap?

[chance1]

Good Lord, there are people who still eat that crap?

LOL

talk about missing the point

which is that the bakers union - of about 4,000 workers ....... shut down the company

and sacrificed the Teamsters union employees - about 14,000

keeping the co. alive, to possibly make it, or be attractive for a potential purchaser, was what everyone should have been working towards

but the bakers union ............... fucked it for everyone including themselves

progressive terrorism at work

[Kulindahr]

I think declining sales are the biggest culprit. Most of Hostess's products are outdated and they didn't innovate to keep up with the more healthy products people are demanding. Blaming unions is perhaps one factor, but only one factor.

They have had serious competition from cheaper but also lower-quality products, besides some from companies such as Hersheys and even Starbucks venturing into the pastries market, and some mismanagement in response. But it was the unions who were the last straw.

[JayHawk]

The company told the union to accept 8% less in pay and they could stay open and keep jobs but other than that it was financially impossible.... the union refused.... 18,000 out of work in a shitty shitty season to be out of work....

[eastofeden]

Hostess = Dan White = Twinkie Defense = Heart Attacks = Preservative Filled Crap = Obesity = Diabetes

Yup...must be the unions.

[JayHawk]

n January 2012, Twinkie manufacturer Hostess filed for Chapter 11 bankruptcy protection.[4] Twinkie sales for the year ended December 25, 2011 were 36 million packages, down almost 2% from a year earlier.[4] Hostess said customers have migrated to healthier foods.[4] In November 2012, Hostess announced that is was ceasing production of all its products and liquidating all assets, but it hopes to be able to sell its more popular brands to other manufacturers.[1]

No doubt it is not all unions but the unions cut their own throat... sales dropping two percent is a huge indicator of a product but a company can survive and develop new products... it cannot survive if the union refuses to work for a lower wage when the money does not exist to pay that wage....

It is funny to see people go republican.... that should be the new term for only acknowledging half the story.... the half of the story that most effectively promotes some bullshit scheme being sold....

Geee if nothing was profitable then why are they offering to sell trademarked products? Weird

[Kulindahr]

Hostess = Dan White = Twinkie Defense = Heart Attacks = Preservative Filled Crap = Obesity = Diabetes

Yup...must be the unions.

Is this supposed to make sense???

[Kulindahr]

Geee if nothing was profitable then why are they offering to sell trademarked products? Weird

Probably to cover outstanding obligations and hopefully fully fund the pension plans.

[bankside]

"We can still pull through if everyone agrees to work down the coal mines with their bare hands…"

"No."

"Damn the obstructionist union!"


Hmmm?

[chrisrobin]

Please Google: cutting your nose to spite your face.

[bankside]

The reason unions exist is because work is not worth doing as a charitable endeavour to prop up the owners. If the price is too low, then they go on strike. This is kind of the essential contribution of unions to the free market: the realisation that work has a minimum value.


And the reason capitalist free markets exist is because some companies deserve to fail. Certainly no company is guaranteed immortality, no matter how "iconic."

Who is supposed to mourn twinkies and wonderbread anyway?

[chance1]

Union good

Even when wrong

Tell that to the families of the now unemployed workers

Animal farm

[BostonPirate]

Oh MY GOD

NO MORE TWINKIES!!!

Where's crapper McGollum!!!

We need a watergate style comittee to see who we must jail for this HORROR!!!!!!!!!!!!!!

Let Detroit go bankrupt, but BY GOD!!!!!!!


SAVE THE TWINKIES!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[eastofeden]

Is this supposed to make sense???

There are multiple reasons why this company failed...

What didn't make sense to you were my initial thoughts when I think of "Hostess"...
Hostess = Dan White = Twinkie Defense = Heart Attacks = Preservative Filled Crap = Obesity = Diabetes

The union is not the sole culprit. They have failed to adapt to a changing marketplace and cater to more informed consumers who opt for healthier alternatives....and Hostess has had an image problem for many years. Twinkies and White Wonder Bread...who eats that crap?

[chance1]

This is not a republican democrat thing

Cept for u

It's a jobs thing

And the bakers union fucked themselves and their teamsters brethren

But you'd rather make this something else and laugh about twinkies

[JayHawk]

The reason unions exist is because work is not worth doing as a charitable endeavour to prop up the owners. If the price is too low, then they go on strike. This is kind of the essential contribution of unions to the free market: the realisation that work has a minimum value.


And the reason capitalist free markets exist is because some companies deserve to fail. Certainly no company is guaranteed immortality, no matter how "iconic."

Who is supposed to mourn twinkies and wonderbread anyway?

Hmmmmmmmmm

If I make 1000 dollars a week then I ask that you please take a 80 dollar cut in pay so that you can continue to make 920 dollars a week.....

No cant do that

Okay well we hafta close

Sure does sound like working in a coal mine with your bare hands.....

[bankside]

Why is it legitimate for the shareholder owners of the capital to decide to walk away? To decide that it isn't worth continuing to prop up a corpse of a company? But if the owners of the labour (we all own our personal labour) decide that it isn't worth continuing, then somehow "they have killed the company!!!!!! ZOMG ONO Socialism!!!!!!!11!!!!!!!1!!!one!!!!……...Kenya."

[JayHawk]

It isnt but do you personally believe 18000 people are all of the same opinion that a 8% cut in pay is worth no paycheck at all when unemployment is at such heights?

Ignorance....

[BostonPirate]

LOL

The company went down because it makes shit products that no one wants to buy. No one can afford to make them for what people are willing to pay to eat them.

[JayHawk]

So BP what you are syaing is two things... first the company did not offer to stay open if the union workers took a 8% cut and by inference not a soul will buy their trademarked products because nobody wants to eat them right?

[BostonPirate]

ehh

I think that when the company is liquidated, someone will buy the rights to production, and they will be made again.

[cityboy-stl]

While the company was filing for bankruptcy, for the second time, earlier this year, it actually tripled its CEO’s pay, and increased other executives’ compensation by as much as 80 percent.

http://thinkprogress.org/economy/201...all/?mobile=nc
http://www.huffingtonpost.com/2012/1...n_2147043.html

Yeah, right. It's all the unions fault. Everyone else is supposed to sacrifice except those who have the most. I'm sick of this plutocratic bullshit from corporations. They ask workers to take an 8% cut in order to pay for mega increases for the top 10 people. Sick. These assholes don't care about the company. They only care about their own morbidly obese wallets. If they cared about the company they would lead by example and take 50% cuts themselves instead of shitting in the face of their employees and blaming it on them. They would still be making huge salaries and I'll bet they would have gotten an 8% concession and maybe then some if they had.

But it's all the unions fault......and the arrogant, greedy actions of the executives is all perfectly fine. I just don't get it.

[Kulindahr]

"We can still pull through if everyone agrees to work down the coal mines with their bare hands…"

"No."

"Damn the obstructionist union!"


Hmmm?

Now you sound like Benvolio's mirror twin.

[Kulindahr]

The reason unions exist is because work is not worth doing as a charitable endeavour to prop up the owners. If the price is too low, then they go on strike. This is kind of the essential contribution of unions to the free market: the realisation that work has a minimum value.


And the reason capitalist free markets exist is because some companies deserve to fail. Certainly no company is guaranteed immortality, no matter how "iconic."

Who is supposed to mourn twinkies and wonderbread anyway?

As I've said, there are unions, and there are unions. These guys were well paid, and could have easily survived a temporary cut. It's the unions on the bottom, just fighting to help their members survive, we need to encourage. For example, Walmart's employees should unionize despite the store's wishes. Probably a third of the nation's work force should be unionized, just to win basic needs, but the long-standing unions which get their members figures like $50/hr need to back off and let the economy catch its breath.

[colbymarker]

No one has mentioned the increase in executive salaries. Ok for them to pad their paychecks but God forbid a union worker didn't want to take a pay cut. This from the Wall Street Journal:

BY RACHEL FEINTZEIG

Creditors of Hostess Brands Inc. said in court papers the company may have "manipulated" its executives' salaries higher in the months leading up to its Chapter 11 filing, in what the creditors called a possible effort by Hostess to "sidestep" Bankruptcy Code compensation provisions.

The committee representing Hostess's unsecured creditors alleges that information it has gathered suggests "the possibility" that the company converted a chunk of its top executives' pay from performance-based bonuses to salary, "at least in part to sidestep" rules designed to ensure that companies in bankruptcy aren't enticing their employees to stay on board with the promise ...

Apparent Original Source Link (requires subscription): http://bankruptcynews.dowjones.com/A...8%26ctype%3dts

Copyright ©2012 Dow Jones & Company, Inc. All Rights Reserved

[Kulindahr]

Union good

Even when wrong

Tell that to the families of the now unemployed workers

Animal farm

Analyst quoted on the tube tonight forecast that probably 8,000 of the 18,500 shouldn't worry, that the really famous brands will be bought up by other companies within the month -- but they'll have to settle for the offer Hostess made.

The others... well, they brought it on themselves, so what they ought to do is take the Hostess offer and go beg other companies to buy their workplaces.

[Kulindahr]

There are multiple reasons why this company failed...

What didn't make sense to you were my initial thoughts when I think of "Hostess"...
Hostess = Dan White = Twinkie Defense = Heart Attacks = Preservative Filled Crap = Obesity = Diabetes

The union is not the sole culprit. They have failed to adapt to a changing marketplace and cater to more informed consumers who opt for healthier alternatives....and Hostess has had an image problem for many years. Twinkies and White Wonder Bread...who eats that crap?

How about...

Whole Wheat Twinkies?

Low sugar fruit pies?

Low fat Hostess cupcakes?

[Jack Springer]

Interstate Bakeries, now Hostess bought a lot of companies and inherited a shitload of unions with the purchases.

Crazy union rules kept them from running an efficient company.

They had to run separate delivery trucks for different product going to the same stores.

At least whoever ends up with the remains will be able to sell the brands.

Teamsters made a good move while the baker's union fucked up -- hope they lose all their pensions and are not able to collect unemployment.

[Kulindahr]

LOL

The company went down because it makes shit products that no one wants to buy. No one can afford to make them for what people are willing to pay to eat them.

In Mexico they could.

- - - Updated - - -

ehh

I think that when the company is liquidated, someone will buy the rights to production, and they will be made again.

Some won't survive -- Wonder Bread will probably be one.

[Kulindahr]

http://thinkprogress.org/economy/201...all/?mobile=nc
http://www.huffingtonpost.com/2012/1...n_2147043.html

Yeah, right. It's all the unions fault. Everyone else is supposed to sacrifice except those who have the most. I'm sick of this plutocratic bullshit from corporations. They ask workers to take an 8% cut in order to pay for mega increases for the top 10 people. Sick. These assholes don't care about the company. They only care about their own morbidly obese wallets. If they cared about the company they would lead by example and take 50% cuts themselves instead of shitting in the face of their employees and blaming it on them. They would still be making huge salaries and I'll bet they would have gotten an 8% concession and maybe then some if they had.

But it's all the unions fault......and the arrogant, greedy actions of the executives is all perfectly fine. I just don't get it.

There's a point -- but that's not why they asked for the cut, and not why the execs awarded themselves the giant leap.

But there's definitely a correlation. Those top ten together got over five million total in increases. While that's not enough to fill back in the 8% decrease, it should have stayed with the workers.
No, the execs anticipated the union reaction, and gave themselves a present as their parting gift.

[Kulindahr]

Interstate Bakeries, now Hostess bought a lot of companies and inherited a shitload of unions with the purchases.

Crazy union rules kept them from running an efficient company.

They had to run separate delivery trucks for different product going to the same stores.

At least whoever ends up with the remains will be able to sell the brands.

Teamsters made a good move while the baker's union fucked up -- hope they lose all their pensions and are not able to collect unemployment.

Also true. Unions crippled one foot, so their progress was inhibited.

But no go on your wish -- they get unemployment, and the pensions are guaranteed federally. You know, the way the company is going, this looks just like a Bain gig.

[Just_Believe18]

Rather than blaming the unions, you should look into the bad mismanagement of the company that coupled with declining sales that forced this stalemate in negotiations. The company expected its workers to take more paycuts to cover their bonuses and bad management. Then the finances collapsed and everyone went down with the ship. It's sad that thousands of these workers are going to be unemployed, but to blame the workers themselves is disingenuous.

The company is going to make big out of this financial collapse. They now get to sell their trademarks, recipes, patents, machinery and infrastructure to the "highest bidders." They're going to make millions off of a dying product line, and the workers you're blaming are going to be unemployed.

[Joshua_me]

The company is going to make big out of this financial collapse. They now get to sell their trademarks, recipes, patents, machinery and infrastructure to the "highest bidders." They're going to make millions off of a dying product line, and the workers you're blaming are going to be unemployed.

^Absolutely.

Unhealthy product be damned, there is no shortage of consumer demand for Twinkies and Wonder Bread and all that assorted "comfort food" many of us grew up with...

Rather, to me, this seems like a company that was willing to close down their plants as for more of a symbolic gesture than anything else.

Can you imagine the mind-numbing drudgery of watching 1000's of Twinkies boxes pass by you as you made sure every box was filled properly? Hour after hour, day after day, year after year...

Sweet Jesus, what an awful job.

But then, when the workers "took to the streets" demanding such outrageous demands as a living wage and health care for their families, (the nerve ! ) their companies "shut down", unable to carry on in the wake of impressive sales of high profit snack treats and Wonder Bread, they chain the factories and pretend they are going out of business.

Horseshit.

The production of Twinkies and Ding Dongs aren't going anywhere. Except overseas.

It's despicable, and something even the Obama administration can't do anything about.

There are better ways of getting cream filling to dribble down your chin, believe me.

Shame on Hostess for treating their hard working, long-term employee's (many of them expecting well deserved pensions) like absolute shit.

America's greed will be it's undoing.

And God knows it's only begun.

[evanrick]

LOL

talk about missing the point

which is that the bakers union - of about 4,000 workers ....... shut down the company

and sacrificed the Teamsters union employees - about 14,000

keeping the co. alive, to possibly make it, or be attractive for a potential purchaser, was what everyone should have been working towards

but the bakers union ............... fucked it for everyone including themselves

progressive terrorism at work

but corporate America is justified in holding record profits and spending billions to attack democrats is fair game? sorry, cant have it both ways.

[evanrick]

Interstate Bakeries, now Hostess bought a lot of companies and inherited a shitload of unions with the purchases.

Crazy union rules kept them from running an efficient company.

They had to run separate delivery trucks for different product going to the same stores.

At least whoever ends up with the remains will be able to sell the brands.

Teamsters made a good move while the baker's union fucked up -- hope they lose all their pensions and are not able to collect unemployment.

you just hate working people? its no surprise your side cant win elections.

[Ninja108]

It should be noted that Hostess's executives were able to give themselves nice big payraises while asking workers to take a pay cut. But let's make them look blameless while blaming the workers.

[rareboy]

Rather than blaming the unions, you should look into the bad mismanagement of the company that coupled with declining sales that forced this stalemate in negotiations. The company expected its workers to take more paycuts to cover their bonuses and bad management. Then the finances collapsed and everyone went down with the ship. It's sad that thousands of these workers are going to be unemployed, but to blame the workers themselves is disingenuous.

The company is going to make big out of this financial collapse. They now get to sell their trademarks, recipes, patents, machinery and infrastructure to the "highest bidders." They're going to make millions off of a dying product line, and the workers you're blaming are going to be unemployed.

This.

[chance1]

No one is denying bad mgmt.

What people do is make the best of the sitch

The Bakers union did not

For themselves ....... They're out of a job

And their brothers - Teamsters - who did try to make the best

The Bakers union had a choice

And they clearly made the wrong one

Anyone disagree with that ?

[Benvolio]

Unions are, at best, price fixing conspiracies against the public. Like all price fixing schemes, they exist for the purpose of extorting prices, i.e. wages and benefits, from consumers, in excess of the market value. Most of our heavy industry has been unionized out of existence, as the cost of labor destroys the ability of companies to compete with foreign companies. Usually the death is slower and less dramatic, but this is not the first. The once great International Harvester Company was destroyed by the labor unions in much the same way.
Worse, they use union funds to pay politicians to work against our economic system. Democrats have always believed "we are the good guys because we are on the side of the workers against employers." They have won the war and our economy is in an irretrievable downward spin.

[chance1]

^ that last sentence doesn't suggest glass half full Ben

Cheer up its Saturday

[chrisrobin]

Enter Bain Capital!

I think Rosetta Stone has a Mandarin Chinese version.
I'm certain that the laid off Hostess workers would be happy to work for $.50 an hour in China. Also, the American carry-outs must be terrific. Imagine that: Mac and cheese in little white cartons. I wonder if there is single-payer health insurance there?

[Jack Springer]

you just hate working people? its no surprise your side cant win elections.

You're not looking at the whole picture.

The baker's union chose to make this their last stand. They refused to compromise.

The company no doubt has had bad management. The expanded too quickly -- bought too many companies -- accepted too many union contracts from too many unions.

Just means more space at the grocer's for other brands and a chance for the grocery store to make more money off the space while dealing with less people and less trucks at their back docks.

Did you know that the various union contracts did not allow Hostess products to be delivered by one driver to a store? Unions caused a bigger carbon footprint.

[chance1]

You're not looking at the whole picture.

The baker's union chose to make this their last stand. They refused to compromise.

The company no doubt has had bad management. The expanded too quickly -- bought too many companies -- accepted too many union contracts from too many unions.

Just means more space at the grocer's for other brands and a chance for the grocery store to make more money off the space while dealing with less people and less trucks at their back docks.

Did you know that the various union contracts did not allow Hostess products to be delivered by one driver to a store? Unions caused a bigger carbon footprint.

union = good
mgmt. = bad

details be damned

that's the narrative in this thread

which ignores the FACTS

it's a super pac ad hehe

[White Eagle]

I have yet to see what the salaries of the union workers was. I am gonna stay on the side of the union workers. The links that cityboy-stl posted says enough for me.


http://thinkprogress.org/economy/201...all/?mobile=nc

BCTGM members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.

http://www.huffingtonpost.com/2012/1...n_2147043.html

CORRECTION: An earlier version of as well as an earlier headline of this post incorrectly stated that Greg Rayburn received a 300 percent raise as CEO of Hostess as the company approached bankruptcy. Rayburn wasn't CEO of Hostess until after the company filed for bankruptcy. The post also incorrectly stated that he was paid a salary of up to $2,550,000 per year. His salary when he joined the company was $100,000 per month, according to a company spokesman.

Hostess could have ensured the Twinkie's survival simply by paying the executives less, one of the unions organizing company workers alleges.

Those of you that posted that it's the union's fault. If you would supply a link, as you are supposed to do, I just may change my mind.

[cityboy-stl]

union = good
mgmt. = bad

details be damned

that's the narrative in this thread

which ignores the FACTS

it's a super pac ad hehe

I'm saying both are bad. Leadership starts at the top. No? That's what you always say anyway. If executives had given themselves 50% pay cuts instead of mega percent increases it would set a good faith example and provided incentive for cooperation and compromise. I'll bet they could have renegotiated union contracts and stayed in business. But no. The 1% gives themselves big salary increases and expects nothing but sacrifice and capitulation from the 99%. I don't for a second believe this whole thing wasn't planned to turn out this way and the 1% of the company will end up richer than ever while the 99% are unemployed. These are Mitt Romney - Bain Capital tactics and one of the main reasons why he lost.

[EastMed]

The brands will no doubt be sold at a profit and the re-employed workers will become members of the precariat.

[T-Rexx]

Let's make one thing perfectly clear. Unions did NOT kill Hostess - management did.

You don't run a company by cutting and cutting the salaries of your employees, demanding that they compensate for your incompetence by sacrificing themselves, even as you increase your own salary.

Hostess is being liquidated because it is more valuable to the incompetent owners in liquidation than it is as an operating company. That is, as some have pointed out, the Bain Capital method of "capitalism." The workers are being vilified because they refused to enslave themselves so that bad managers might get even richer.

Hostess's workers are not some evil force victimizing the poor, noble, angelic owners who only want to give them jobs. They are fed up with being exploited and being lied to. They want to be treated fairly.

But, somehow, Hostess's management thinks it is the workers' fault that it is unable to pay them their salaries.

[palemale]

Here is the union's perspective:

Our members decided they were not going to take any more abuse from a company they have given so much to for so many years," Hurt said in a statement late Friday. "They decided that they were not going to agree to another round of outrageous wage and benefit cuts and give up their pension only to see yet another management team fail and Wall Street vulture capitalists and 'restructuring specialists' walk away with untold millions of dollars.

http://money.cnn.com/2012/11/16/news...ing/index.html

There had been a previous bankruptcy in which the union gave major concessions apparently, only to see the company be run poorly by vulture capitalists and hedge funds. The workers probably just got tired of giving concessions that went directly into the pockets of Wall Street parasites instead of making the business a going concern.

[evanrick]

if unions and management are equally bad at being greedy, what does that say about your argument that you blame the unions when it defies logic that someone would vote themselves out of a job by refusing a new contract?

i see the picture very clearly, as did the millions of people that voted against republicans and their constant blame shifting as to why jobs are not being created, because of unions?

its a hostage situation and your side is upset that you cant barter with peoples lives anymore by threatening with economic terror, fiscal cliffs, and all those threats of doom if "things don't go your way". well they didn't so get over it.

polls have already foreclosed on republican positions on these issues, your just digging yourself deeper.

the more you try to avoid the failures of the republican ideology with excuse after excuse the bigger the blowback will be.