Evil Semp wrote:
aad0906 wrote:I think those bonuses are divided by hundreds of people and I assume it's because they need an incentive to stay around and manage the liquidation instead of finding a new job right away. Why else would a judge have approved them? But I could be wrong.
I understand what the bonus is for but the union employees were expected to stay around and take a cut in pay and benefits. Just waiting for NS os PS to justify this.
What do they have to justify? Hostess wasn't run on taxpayer money, what they pay their people is no one's business. If they want to shell out $1.8 million, so what? It's their money, not yours (or PS, or NS).
You want to extend sympathy to the workers? That's fine, but irrelevant. Hostess was some $850 million in debt. Their stock price dropped over 90% from the highs it once had. The company was dead. You can assign blame, but the real blame is that Hostess made products that are not in very good standing in today's concern about eating health and all that stuff. Hostess fell victim to the PSM trap, which affects companies, unions and nations alike.
When a Previously Successful Model fails it leads to only one of two choices. You either double down and pray it turns around, or you abandon the model and lose all the capital you invested in building it in the first place.
This capital invested is the reason why it's so hard sometimes for companies to alter their business model, because their resources were designed for a model that was previously successful and to retask requires a new capital injection.
When the stock price falls to $2 a share, getting that capital injection becomes impossible. That's how companies borrow after all.
Don't you think it's the judge who should justify his decision to you? After all, he's the one who approved it, didn't he?
Do you think the judge would give you the time of day if you demanded he justify his decision to you?
Why do you think he approved this?
I'll tell you why-
Guess who is really paying those bonuses anyway? The creditors. Not you.
In the article posted, it's claimed that there are hundreds of offers on the company. Most likely for the brand name recognition I'd think, but I don't really care. Now, if the union came with that sale, at the price tag of an extra $850 million, how many offers do you think there'd be?
The very reason there are so many offers is because the potential buyers are not going to be on the hook for the company's debts. That's the only reason there are so many offers (if there really are that many offers, I have no way of knowing for sure).
You don't seem to consider the other party in all this, either. The shareholders. These are often times just regular people, pension plans, mutual funds (which are bulked in to lots of people's 401K's and such), who are taking a hair cut in the end. I don't give a crap about the investment firms or banks who might be out money (screw them), but the poor suckers who had money invested in Hostess, which includes things like Teacher's Pension funds and multiple other investment groups/vehicles, that's a completely different thing. That's what's done, all kinds of plans that affect all kinds of people. But you all have to understand, these investors interest is to get a return on their money, which is not inline at all with the worker's interest, namely keeping a job. A job which was continuing to suck the investors dry. And there is nothing wrong with the shareholders wanting to get at least a portion of their money back. You'd want the same thing in their shoes.
That's why Hostess needs the best people they can get to make sure they recover as much of these people's funds as possible in the liquidation process. The more money these executives can recover, the better. And it seem a bit of these bonuses are tied directly to this caveat. A job like this does not fall into the skill set of the average worker at Hostess (former worker actually). If you were in the shareholder's shoes you'd insist on the same thing.
And that's why the judge approved.
MeDeFe wrote:After all, one truck full of Twinkies and one truck full of Wonderbread is no different from two trucks loaded with a mix of the two products.
Not true. Say a store has an order for wonderbread and twinkies. Hostess would have to send two trucks. Two trips where it could be done in one.
No matter how you slice it (heh heh), it's woefully inefficient. But hey, if that's what Hostess does, then that's their decision I suppose. Probably why they are in the mess they are in now. Because they are woefully stupid.
The unions do what they do, the management does what they do, the shareholders do what they do and regardless of what their agendas are, all of them are at the whims and fickleness of the consumer. Guess who has the real power?