Originally Posted By Labuda So, turns out that Hostess is closing. I'm a bit weirded out by this, as I think part of the issue is due to corporate greed, BUT that may just be because I'm very pro-union and it turns out a labor dispute and baker strike is what Hostess is claiming was the impetus for them to shut down all operations. I'm really just wanting to hate on Hostess as a corporation right now, but when reading the article on CNN Money (<a href="http://money.cnn.com/2012/11/16/news/companies/hostess-closing/index.html?hpt=hp_t2" target="_blank">http://money.cnn.com/2012/11/1...pt=hp_t2</a>), I'm actually starting to feel bad for the corporation, which is a new feeling for me that is causing some internal conflict. Anyone else have a comment on it? I just know that I feel bad for all the people that are going to lose their jobs, and I wonder if the union is overstepping in going for a strike, but not having any knowledge of what the bakers make now or want to make going forward is kind of handicapping me right now, I feel. I just don't know what to think.
Originally Posted By TomSawyer This is a far more balanced article about the recent bankruptcy that points out that the high costs of pensions are partly to blame, but that the private equity firm and the hedge funds had been operating the company with heavily leveraged debt that they couldn't afford to pay back. <a href="http://management.fortune.cnn.com/2012/07/26/hostess-twinkies-bankrupt/" target="_blank">http://management.fortune.cnn....ankrupt/</a> Of course, private equity firms and hedge funds aren't in the business of keeping companies open if they can just sell off the assets. It's a lot easier that way.
Originally Posted By mawnck I've read several articles maintaining that Bimbo Bakeries of Mexico is going to snap up the brands now, just as they tried to do a few years back. Have also heard - with some evidence to back it up - that their operation really was ridiculously hobbled by the convoluted union contracts, sticking them with way more workers than they reasonably needed to do what they were doing, all with generous pension plans. And their manufacturing facilities were hopelessly inefficient and outdated. Same reason. But that management has also done a miserable job of running the company (negotiating with unions is certainly part of that), and that the hedgies in question have been bastards throughout the whole negotiation process. Can also report that every 7 or 8 years or so, I try a Twinkie just to remind myself that Twinkies are gross. Losing an iconic brand that I never actually buy anything from ... well, who cares? In any case, this was a business thing that I hope the guvmint has the good sense to stay out of.
Originally Posted By WilliamK99 I am curious as to who the workers will blame, the union heads or the organization. I like how Teamsters has basically placed the blame on the baker's union for trying to strong arm Hostess...
Originally Posted By Labuda Thanks for that article, Tom. I just finished reading it, and am glad I did... wow, what a mess. And I like that early on in the article, they mentioned something about no black & white in this situation, just a lot of greys. It's unfortunate that so many people are now losing their jobs.
Originally Posted By Labuda "Losing an iconic brand that I never actually buy anything from ... well, who cares?" Yeah, I haven't bought a Hostess product in YEARS. But, reading the link that Tom gave, I've been reminded that Ding Dongs are a hostess product and I always liked those, so maybe the next time I go to the grocery store and buy milk, I'll also pick up a package of Ding Dongs. And, yep, I read that Bimbo (great name! hehe) Brands may take over and make those items, but are they really likely to if they're apparently not selling much anymore?
Originally Posted By mawnck >>but are they really likely to if they're apparently not selling much anymore?<< I suspect they're selling well enough that a well-run company, unencumbered by inconveniences like vulture capitalist debt and well-paid union workers, could still make a lot of money from them. You can forget about picking up any Ding Dongs. There's a run. I saw some at the 7 Eleven last night and almost bought them. I bet they ain't there now. By the way ... <a href="http://www.youtube.com/watch?v=6aY7dnvNsgE" target="_blank">http://www.youtube.com/watch?v...7dnvNsgE</a>
Originally Posted By Labuda Cute song, mawnck. As far as Ding Dongs, if I don't get any, no biggie - I've lived this long without 'em!
Originally Posted By oc_dean >>so maybe the next time I go to the grocery store and buy milk, I'll also pick up a package of Ding Dongs. << Be quick about it. I mean - REALLY quick. 2 hours ago ... I stepped into a local Stater Brothers ... I got Twinkies .. but no Ding Dongs. Across the street to Ralphs ... wiped out on Ding Dongs and Twinkies. To a large Albertsons for our area .. and I managed to grab the last 3 boxes of Ding Dongs. Still a few more boxes of Twinkies.
Originally Posted By skinnerbox I find it irresponsible on the part of both CNN and Fortune not to mention the insane salary increases the CEO and other top executives received earlier this year while they were preparing for bankruptcy: <a href="http://thinkprogress.org/economy/2012/11/16/1203151/why-unions-dont-shoulder-the-blame-for-hostesss-downfall/" target="_blank">http://thinkprogress.org/econo...ownfall/</a> <> Hostess Blames Union For Bankruptcy After Tripling CEO’s Pay By Annie-Rose Strasser on Nov 16, 2012 at 3:50 pm Today, Hostess Brands inc. — the company famed for its sickly sweet desert snacks like Twinkies and Sno Balls — announced they’d be shuttering after more than eighty years of production. But while headlines have been quick to blame unions for the downfall of the company there’s actually more to the story: 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. At the time, creditors warned that the decision signaled an attempt to “sidestep” bankruptcy rules, potentially as a means for trying to keep the executive at a failing company. The Confectionery, Tobacco Workers & Grain Millers International Union pointed this out in their written reaction to the news that the business is closing: "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." Certainly, the company agreed to an out-sized pension debt, but the decision to pay executives more while scorning employee contracts during a bankruptcy reflects a lack of good managerial judgement. It also follows a trend of rising CEO pay in times of economic difficulty. At the manufacturing company Caterpillar, for example, they froze workers’ pay while boosting their CEO’s pay to $17 million. And at Citigroup, CEO Vikram Pandit received $6.7 million for crashing his company, walking off with $260 million after the business lost 88 percent of its value. <> I'm sick of the 'blame the union workers' mantra that corporate raiders and greedy execs continue to spew as they overcompensate themselves beyond reasonable amounts. I'm sorry for the workers losing their jobs. But there are better 'junk food' options out there, that actually have some nutritive value.
Originally Posted By mawnck There was one package of Ding Dongs left at the 7 Eleven 40 minutes ago. I eating them.
Originally Posted By oc_dean >> By the way ... <a href="http://www.youtube.com/watch?v...7dnvNsgE" target="_blank">http://www.youtube.com/watch?v...7dnvNsgE</a> << Too true! That's why 75% of what I got is gifts to others who've never experience this piece of Americana in Australia, and as "stocking" gifts this Christmas. I'll probably consume just a few of each.
Originally Posted By oc_dean Good post Skinner! Excellent points. Yes there is better, more nutritional things. My soul purpose to my "run" ... was purely nostalgia. As Twinkies and Ding Dongs were part of my growing up in the 70s.
Originally Posted By mawnck That song was an honest-to-gosh hit single in the US in 1976. Larry Groce followed it up by recording several children's albums for a label you may have heard of ... Disneyland Records.
Originally Posted By Tikiduck Cant wait for them to start showing up on EBay at 200 dollars a case. I haven't eaten a Hostess product in 20 years, but I do feel this sudden urge to gorge myself on Twinkies.
Originally Posted By mele I feel bad for the people who are out of work but can't say I want to eat any Hostess products. Ever.
Originally Posted By mawnck Cant wait for them to start showing up on EBay at 200 dollars a case. <a href="http://www.ebay.com/sch/i.html?_sacat=0&_from=R40&_nkw=twinkies&_sop=3" target="_blank">http://www.ebay.com/sch/i.html...s&_sop=3</a> I haven't eaten a Hostess product in 20 years, but I do feel this sudden urge to gorge myself on Twinkies. I can vouch for the fact that Ding Dongs haven't improved since 2004, which was the last time I ate one. Hmmmm .... now there's a sentence .....
