Union Hacks kill Twinkies

Yes... this is what passes for journalism. That is the quote which is just union propaganda... all references link here http://www.sacbee.com/2012/11/13/49...-pattern-of-misinformation.html#storylink=cpy please note the author. Looks sort of like a "story"... made very much to look as though it were the "Sacramento Bee?" that was producing an article... but it isn't.

So from there huffpo drops this

ThinkProgress' article was posted earlier... and was ambiguous about the CEO, not calling Rayburn the CEO, but not distinguishing between the old and the new at all.

Ok... so the original propoganda says:

The bankruptcy was declared in January of 2012. Rayburn came on as the replacement CEO in February. I know, but Huffpo says

Confusing isn't it? The whole unsubstantiated rumor seems to stem from this irregularity brought up by the creditors, which went nowhere.
http://online.wsj.com/article/SB10001424052702304072004577323993512506050.html

That's good journalism...


If you are looking for answers, it is sourced in the TP article under "out-sized pension debt".

http://www.businessinsider.com/a-co...etirement-funds-are-owed-big-2012-1?0=warroom

 

They were offered 25% of the company and didn't take it? What the hell did the GM workers in the UAW get? 30%?

 

You don't know how real bankruptcies work do you? The new owners of the brands don't have to hire any of the old help at all. All debts are wiped out in the bankruptcy, including union agreements, including pensions agreed to by the previous owners.

These turkeys didn't just lose their jobs, they lost their pensions too.

Why do you think Obama stepped into the GM thingy? To save the unions and nothing more.

 

Sounds to me the union hacks over at Hostess are a bunch of Ding Dongs.

 

They won't be the people employed to make the products that survive. Those products would be made at the buyer company's plant. The equipment would be moved. There may be a few plants reopened, but the unions had better get the idea that they have no pension at all now.

A 25% stake would mean a voice in management. I don't know why you don't get that.
What could be more concrete than control of your own destiny? Oh yeah I forgot. You don't want to control your own destiny, you want somebody to tell you what to do.

Nobody at the buggy whip factory saw the automobile coming either. Sh1t happens.

I wonder how many carbs are in a concoction like a twinkie?

ok, 27 grams. 18 from sugar. 9% of your RDA
http://caloriecount.about.com/calories-hostess-twinkies-i113361

There are lots of reasons they went under. Tough. To completely discount the burden of union crap is absurd. You have to live with the hand life deals you. If these people can't see past next tuesday, so be it.

 

A billion bucks for pensions? That will now not be paid. How funny!

 

[/QUOTE]

I suppose you will be happy to work for a dollar a month. How low are you willing to go, fifty cents a year? It seems that the top executives want every penny they can get their grubby hands on. Be sure to extend a warm hello when they show up to rob your company blind.

 

You'll pay the pensions through the PBGC.

 

Hostess has been a union shop for over 50 years.

I don't think the union bakers were working for a dollar a month.

Do you?

But the fact is that Obama voters can't lose.

The company either stays in business as pays them what they want or Obama will reward them with 99 weeks of free vacation time, and Obama phone, food stamps and other stuff paid for by the US tax payers.

 

Posted on another thread...........

Not really!

You really didn't thing the Gubament was going to give 'em the whole thing did ya? They aren't going to cut into the money they waste to pay unions full pension benefits.

 

Don't believe me, look it up yourself. I just logged on to ebay and looked up Twinkies. The results: 9,115 results found for twinkies

Twinkies are becoming collectors items. Or perhaps a long lasting food source for your average fallout shelter.

 

I love all of the anger directed at Rayburn... a guy who is brought in to save companies...

From wiki:

http://en.wikipedia.org/wiki/Hostess_Brands

 

I would disagree. For many years Hostess basically had a monopoly on many of these "junk food" items such as Twinkies and Hostess Cupcakes so they could charge whatever the market could bear. This allowed them to pay the workers more and more over time because of the huge "profit" margin over the cost of the ingredients. In recent years all of us have probably seen Little Debbie products come into our local grocery stores and they competed with Hostess by offering similiar products at about 1/2 the cost. Little Debbie managed to take away a large percentage of the market share that Hostess once had. The Hostess market share continues to diminish today and it's forcing Hostess to lower it's prices to compete. To cut costs Hostess simply can't afford to pay the higher wages it was once able to pay. This isn't a "management" problem but instead it's a competition problem because Hostess must lower prices by cutting expendatures to compete. Hostess cannot cut the cost of ingredients or shipping costs or energy costs or even adminstrative costs enough to compete and all that's really left are the labor cost.

Either Hostess cuts labor costs or it can't afford to produce a product at a competitive price with the competition. This is a free enterprise system and the workers at Hostess need to understand the dynamics of free enterprise because the consumer dictates what the price they're willing to pay when two companies or more are competing for the same customer.

Of note I believe that Hostess provides a better quality product than Little Debbie and it does have some customer loyalty based upon that but for most people buying junk food for their kids the price will often override the quality of the product in their purchasing decision. Hostess is better but Little Debbie is good enough for their kids that don't know the difference anyway and don't make the buying decisions.

 

Spot on Shiva. The best explanation yet. For the consumers it is a pocket book decision. These days with prices soaring and less money to work with, many junk food buyers are down grading just to stretch a buck. This concept seems to be far above the average comprehension level of most union people.

 

That is an information problem that I don't know whether Hostess addressed with the workers or not. Management should have held up a Little Debbie product that sells for $1.25 and then a competing Hostess product that sells for $2.50 and simply told the workers the company needed to cut the costs of its products to compete. Management could have been informative related to the cost of ingredients (that are probably about 25 cents) and the production and overhead costs in production excluding labor. I don't think that Hostess had many options to reduce costs except related to labor.

Perhaps management did this but the union workers weren't willing to make the financial sacrifice necessary for Hostess to complete and, in that case, both the workers and the company decided it wasn't worth continuing the product line. Sometimes its actually best to just close the business and perhaps that's what the union workers decided to do. I really don't know and I won't judge either management or the union as being at fault. An 8% pay cut, which is what I heard Hostess said was necessary, is a substantial pay cut by any standard. Had I been a union representative I would have tried to negotiate a "bonus plan" based upon profit sharing and accepted the pay cut but that's just me.

 

Just a note: The union-side problem wasn't so-much that Hostess couldn't afford to pay the workers higher wages, because the workers weren't really asking for that. The problem was, Hostess couldn't afford to maintain payments into the worker's pensions *and* service their corporate debt, all of which would have been manageable if consumption of their product had followed projections based upon previous sales, but two things happened:

One was the Atkins Diet, which was fadish, but did result in a genral over-all reduction in carb-consumption. The problem there was that Hostess MBAs lost sight of what their business was about, which was snack-foods... they got stuck in the idea of thinking it had to be cake-snack, when they could have converted to low-carb snacks if they'd been more focussed on long-term vision rather than short-term appearance in the board room.

But the second, more important factor is what you've noted here: Reduced demand for their product.

The Hostess execs would go on about how great their "brand loyalty" was, but that's like republicans or democrats going on about how great it is they have voters who will vote for their parties no matter what.

It boiled down to the "undecideds", and in the marketplace, when money got tight, the undecideds went for Little Debbie.

Reduced revenue meant Hostess could not afford to make both loan-repayments and union-pension, and the union wouldn't back on the pension. Everything else yes, but not the pension...

... And it makes the union look oh-so-gosh-darn-golly-gee-look-how-evil-unions-are bad for not surrending ther pension... the only thing most of them had probably been working for and the only thing they had left, and for the union it was probably an idiological issue of their pension being killed so Hostess could keep giving money to Wall Street, therefore once again Wall Street guts a pension, but what I don't get are these two things:

1) The Hostess execs were having fun bonusing themselves, which is wrong when a company is in trouble, so why didn't the union just say, "Okay, we'll let the pension plan stand were it is as long as you give us raises proportional to the raises you're giving yourselves, and then we'll make the pension payments oursleves",

and/or

2) Given that interest rates are at an all-time low, how come the MBAs at Hostess didn't push for a renegotiation of the loan to bring the interest charges down so the company could afford to make the loan payments *and* live up to their deal with the workers, in order to keep Hostess running as a viable business?

 

There might be something wider going on. On the same day that Hostess announced they were going to shut down, a large bakery out west, called Sweetheart, told the union it had to take a 30% cut in pay.

Same union, two different companies.

Sweetheart mostly focuses on bread (not snack-cake), and nobody was complaining about the price of Sweetheart bread... the prices were exactly in line with the competition... which naturaly leads to suspicion of a concerted effort by different companies at union-busting.

If that's what's happening, it's probably because the shareholders of Hostess and Sweetheart are the same people.

 

Hostess is a publicly traded company Sweetheart bread is a privately held company.

 

Okay... but... the "privately held" owners of Sweetheart could still be the same people owning most of the stock in Hostess.

Anyway... it *is* a curious coincidence.

 

18,500 workers at $17/hour average wage equals about $654,160,000 in direct wages. Add FICA and insurance and other benefits this probably becomes $850-$900 million per year in wages.

First, even if executive/owner pay is $25 million/year, it is obvious that executive pay in the grand scheme of things is not a big issue.

Gotta wonder how many businesses over the years have been driven out of business solely to escalating employee compensation? No company will buy this current company and continue the operations status quo! This means some or lots of the company will be sold off or simply terminated, a lot less employees, and less employee compensation. New owners require profits! If potential owners can't pencil out reasonable profits then they won't step up. IMO this was a real gamble by greedy workers and arrogant/ignorant unions...we need to wait a few weeks to see how their gamble paid off...

 

The operative words are "could be". It is an interesting theory. My personal opinion....

****Opinion Alert!****

Unions over the next 10 years will fade away like Dinosaurs into the La Brea tar pits. What they fought for in the past is almost universally adopted into labor laws, now it's only about money and control. The workers seem to think they should have some part in the business decisions made by the company, they DON'T and shouldn't. If the Union wants some say so in those decisions then they should buy stock in the company so they get a vote. If not then they are just useless background noise.

 

Eastern Airlines for one. Driven in the ground by the pilot's union.

 

I love the baggage throwers union, but my favorite is the flight attendant's union... the highest paid unskilled coctail waitressess who get to keep their clothes on... and they have a union which crashes airline schedules.

The flight industry is consistently bailed out by government because it cannot sustain itself but we NEED them for the global economy to work... so they have unions which bankrupt the airline which the government keeps afloat... ever merging into fewer and fewer... anybody recognize a pattern here?

 

So you want them on the breadlines?
http://www.camelcitydispatch.com/wp-content/uploads/2012/09/bread-line-great-depression.jpg

Some people just hate American workers, especially union workers who are trying to provide for their families. Slave wages won't cut it in the world's sole superpower.

 

Wrong. Sweetheart is a subsidiary of Hostess.

The fate of 254 Sweetheart Bakery workers in Montana, including 130 at the Billings bakery, hangs in the air again.

On Friday, the parent company, Hostess Brands Inc., sent letters to all 18,500 employees saying a sale or sell-off of the company in Chapter 11 bankruptcy is possible.

On Jan. 11, for the second time in a decade, Hostess filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York.


Read more: http://billingsgazette.com/news/loc...616-5a34-904c-5a99c9dacf8f.html#ixzz2CWlQUhjU