How will the union supporters spin the Hostess situation?

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Originally Posted by Blackstone

Hostess had been in financial trouble for the last 8 or 9 years. The workers have taken 2 pay cuts already, lost their pension, and lost most benefits. Now, from what I understand, they are being asked to take another 8% pay cut. At some point, the job isn't worth saving. Maybe they are at that point now.

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Lest we miss Bon's point in the matter: the individuals involved with constructing this situation were Dems, who also get involved with PE firms. And it would seem that those equity owners must have approved the payouts to the executives that surely would have helped the company grow weaker. The crony capitalism mentioned earlier would seem to be among Dems, rather than Reps this time.

The NY Times is really stooping to new lows in journalism. Their coverage of the Hostess liquidation is given this headline today: Interactive Feature: Quiz: Hostess and Its Cakes
Hostess Brands announced plans to wind down operations and sell off its brands. Test your knowledge of Hostess and the cakes it is known

I think we need to bail them out. I can't imagine life without devil dogs ,, Yankee doodles, and butter scotch crumpets. Twinkies hold the same prestige as Cadillac once did. This proves the end of the world is near.

Pete

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Originally Posted by BonMallari

How long will the Ding Dongs in my fridge last....no more fried Twinkies at the State Fairs.....I think that these items along with Reeses PB Cups are on RoadKill's basic food groups.....

guess that means no baiting duck ponds with Wonder Bread anymore

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In response to your initial question: Forever I think as long as you don't eat them. Since there is no nutrition there, it seems to me that there is very little to "go bad". ;-)

Very enlightening article.

A better case for poor bussiness practice seems the major cause of the demise as opposed to blaming the union, which at 30% of the workforce, is a less likely smokimg gun.


Twinkies maker Hostess reaches the end of the line

More than 18,000 jobs lost as maker of Wonder Bread and Ding Dongs couldn’t weather strike


By Candice Choi and Tom Murphy

Associated Press

Twinkies may not last forever after all.

Hostess Brands Inc., the maker of the spongy snack with a mysterious cream filling, said Friday, Nov. 16, that it would shutter after years of struggling with management turmoil, rising labor costs and the ever-changing tastes of Americans even as its pantry of sugary cakes seemed suspended in time. The company filed a motion to liquidate Friday with U.S. Bankruptcy Court. The shuttering means the loss of about 18,500 jobs. Hostess said employees at its 33 factories were sent home and operations suspended. Its roughly 500 bakery outlet stores will stay open for several days to sell remaining products.

Last week, thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike after rejecting the company’s latest contract offer.

The company had reached a contract agreement with its largest union, the International Brotherhood of Teamsters, which this week urged the bakery union workers to hold a secret ballot on whether to continue striking. Although many bakery workers decided to cross picket lines this week, Hostess said it wasn’t enough to keep operations at normal levels.

Some of Hostess’ beloved brands such as Ding Dongs and Ho Ho’s likely will be snapped up by buyers and find a second life, but for now the company says its snack cakes should be on shelves for another week or so. The news stoked an outpouring of nostalgia around kitchen tables, water coolers and online as people relived childhood memories of their favorite Hostess goodies.

Customers streamed into the Wonder/ Hostess Bakery Outlet in a strip mall in Indianapolis on Friday afternoon after they heard about the company’s demise. Charles Selke, 42, pulled a pack of Zingers raspberry- flavored dessert cakes out of a plastic bag stuffed with treats as he left the store.

“How do these just disappear from your life?” he asked. “That’s just not right, man. I’m loyal. I love these things, and I’m diabetic.”

After hearing the news on the radio Friday morning, Samantha Caldwell of Chicago took a detour on her way to work to stop at a CVS store for a package of Twinkies to have with her morning tea and got one for her 4-year-old son as well.

“This way he can say, ‘I had one of those,’ ” Caldwell, 41, said.

It’s a sober end for a storied name. Hostess’ roster of brands dates as far back as 1888.

But as larger competitors inundated supermarket shelves with an array of new snacks and variations on popular brands, Hostess cakes seemed caught in a bygone time.

CEO Gregory Rayburn, who was hired as a restructuring expert, said Friday that sales volume was flat to slightly down in recent years. He said the company booked about $2.5 billion in revenue a year, with Twinkies alone generating $68 million so far this year.

Hostess’ problems ran far deeper than changing tastes, however. In January, the company filed for Chapter 11 bankruptcy protection for the second time in less than a decade. Its predecessor company, Interstate Bakeries, filed for bankruptcy protection in 2004 and changed its name to Hostess after emerging in 2009.

Hostess, based in Irving, Texas, said it was saddled with costs related to its unionized workforce.

But management missteps were another problem. Hostess came under fire this spring after it was revealed that nearly a dozen executives received pay hikes of up to 80 percent last year even as the company was struggling. Although some of those executives later agree to reduced salaries, others — including former CEO Brian Driscoll — had left the company by the time the pay hikes came to light.

Then, last week, came the bakery workers strike. The union represents about 30 percent of the company’s workforce. By that time, the company had reached a contract agreement with the Teamsters.

In a statement, the bakery union said Hostess failed because the six management teams over the past eight years weren’t able to make it profitable — not because workers didn’t make concessions.

“Despite a commitment from the company after the first bankruptcy that the resources derived from the workers’ concessions would be plowed back into the company, this never materialized,” the union said.

Here's a "Libertarian" take on the closing of an Iconic brand. Not positive, but I think this is the first of many "_______Shrugged" companies that will be going elsewhere soon. As Maggie Thatcher once said about socialism, " sooner of later, you eventually run out of other people's money."

UB

http://agorafinancial.com/temp/DR/email/JoelBowman.jpg

Joel Bowman

When a company peddling sugar-infused cream rolls to the most obese population on the planet goes broke, you know market conditions have broken down.

Yesterday, Hostess Brands Inc., the company responsible for such delightful dietary abominations as Twinkies, Ding Dongs, Devil Dogs, Ring Dings, Suzy Q’s and, of course, Drake’s Coffee Cakes, filed a motion for bankruptcy.

http://dailyreckoning.com/wp-content...11-17-12-1.png Sorry Newman...“No Cake For You!”

Too bad. It seems Colorado and Washington states just couldn’t legalize marijuana fast enough to bolster demand lines for the financially-addled junk food outfit.

The Hostess announcement might have caused a wave of relief for clogged arteries and strained, double-wide diner stools around the country, but it also means 18,000 now-former workers added to the nation’s growing un- and under-employed lists. The move will also involve the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States.

Ouchie!

In a cruel, though not-unusual, twist of fate, many of those 18,000 workers were involved in the very strikes that ultimately crippled the company.

Double ouchie!

The Ho Ho’s purveyors closed up shop after a weeklong standoff with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM). Yes, such a thing actually exists. A statement released by the company read:

The Board of Directors authorized the wind down of Hostess Brands to preserve and maximize the value of the estate after one of the Company's largest unions, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), initiated a nationwide strike that crippled the Company's ability to produce and deliver products at multiple facilities.

“We simply do not have the financial resources to survive an ongoing national strike,” warned Gregory F. Rayburn, chief executive officer, on Wednesday. “Therefore, if sufficient employees do not return to work by 5 p.m., EST, on Thursday to restore normal operations, we will be forced to immediately move to liquidate the entire company, which will result in the loss of nearly 18,000 jobs.”

Not good enough, retorted the unionists.

“Hostess Brands is making a mockery of the labor relations system that has been in place for nearly 100 years,” union president, Frank Hurt, said in a statement earlier this week. “Our members are not just striking for themselves, but for all unionized workers across North America who are covered by collective bargaining agreements.”

When workers didn’t return to man the mixers, Hostess shuttered shop...causing a flurry of #HostessShrugged hashtags to light up the Twittersphere.

BCTGM, which represents more than 80,000 industry workers, argued that the company’s policies would send its members back to workplace standards of the 1950s...back when people earned a 1950s wage and benefits package for performing a 1950s job...like quality control management on the Zingers and Sno Balls production line.

So just how hard done by were the browbeaten proletariats manning the Twinkie timers?

The mean hourly wage for the designation of “bakeries and tortilla manufacturers” was $12.57 in 2011, according to the Bureau of Labor Statistics. Workers manning the Hostess picket lines this week were earning roughly 35% more than the national average.

“The union’s demands had plagued Hostess for years, forcing — through the legalized monopolization of labor supply — wages that the market wouldn’t bear,” writes Bob Confer in a column for The New American. “The striking line workers were paid healthy salaries, $16 to $18 per hour. In a low-profit, low-selling-price business such as baked goods, those wages aren’t sustainable, especially considering that baking and distribution involve a lot of manpower.”

“Hostess was looking for wage concessions of only eight percent,” continued Confer. “Even after the cuts, Hostess still would have been paying their workers handsomely, 24 percent more than the industry norm. Mind you, this one-year cut would have been followed by guaranteed wage increases of three percent in each of the three years that followed, capped off by one percent in the fourth year. So, the pain would have been only temporary and cancelled out in just three years.”

Apparently, BCTGM had confused the relationship between employer and employee. It is a privilege to work for a company, not a right. Pension plans, medical coverage and other bells and whistles are not something automatically owing to each and every person capable of holding up a sign demanding such things. To the extent that these modern day luxuries are offered at all, they are offered at the behest of the company’s owners and/or management.

There will, no doubt, be complaints about the “greedy capitalists” who took advantage of the poor, helpless worker class. And, to be sure, insiders did award themselves some rather hefty raises when it became obvious the company had no viable economic future. (The CEO was gifted a somewhat tasteless 300% raise after the company filed its first bankruptcy suit earlier this year.)

But if the capitalists are so greedy, so profiteering, why stay and toil for them? If workers are unhappy, if they feel themselves poorly treated, they are free to leave and seek other employment at any time. They are also free to “down spatulas” and to collectively bargain...just as they are free to strike themselves out of a job.

The truth is that, without “greedy capitalists,” unions of the world wouldn’t ever have a Hostess to kill. So, our congratulations go to the aptly-named, Mr. Hurt. Now you and your comrades-in-arms can feast on 100% of the Cup Cakes that Hostess will never make.

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Originally Posted by Gerry Clinchy

Lest we miss Bon's point in the matter: the individuals involved with constructing this situation were Dems, who also get involved with PE firms. And it would seem that those equity owners must have approved the payouts to the executives that surely would have helped the company grow weaker. The crony capitalism mentioned earlier would seem to be among Dems, rather than Reps this time.

The NY Times is really stooping to new lows in journalism. Their coverage of the Hostess liquidation is given this headline today: Interactive Feature: Quiz: Hostess and Its Cakes
Hostess Brands announced plans to wind down operations and sell off its brands. Test your knowledge of Hostess and the cakes it is known

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I don't think there is a political spin to be put on this at all. There are greedy Dems. just like there are greedy Repubs. Just because this greedy person happened to be a Dem. That doesn't make what happen a Dem. problem.

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Originally Posted by Blackstone

I don't think there is a political spin to be put on this at all. There are greedy Dems. just like there are greedy Repubs. Just because this greedy person happened to be a Dem. That doesn't make what happen a Dem. problem.

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Pretty much how lefties explain their love for their union bosses, that receive exhorbitant 'salaries' for being pure takers....nothing produced by that batch of corrupt 'leaders' except intimidation.

UB

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Originally Posted by Blackstone

I don't think there is a political spin to be put on this at all. There are greedy Dems. just like there are greedy Repubs. Just because this greedy person happened to be a Dem. That doesn't make what happen a Dem. problem.

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Yet, if they were Reps, it WOULD be a Rep problem. Bain Capital, today, is run by people who contributed heavily to Obama's campaign, but Bain remained an Rep "problem".

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Originally Posted by Gerry Clinchy

Yet, if they were Reps, it WOULD be a Rep problem. Bain Capital, today, is run by people who contributed heavily to Obama's campaign, but Bain remained an Rep "problem".

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I don't see Bain as a Republican problem, just a greed problem. Of course, when people are eager to assign political blame, they will paint it that way.

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Originally Posted by Uncle Bill

Pretty much how lefties explain their love for their union bosses, that receive exhorbitant 'salaries' for being pure takers....nothing produced by that batch of corrupt 'leaders' except intimidation.

UB

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I don't have any union bosses, never have. But, I'm not so jaded by reading all the anti-union and anti-Dem propoganda that I can no longer be fair and open minded when it comes to either party.