Unions Shut Down Hostess

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Re: Unions Shut Down Hostess

Postby MeDeFe on Tue Nov 27, 2012 4:30 am

Phatscotty wrote:
The work rules imposed in union contracts required the company that makes Twinkies, which also makes Wonder Bread, to deliver these two products to stores in separate trucks. Moreover, truck drivers were not allowed to load either of these products into their trucks. And the people who did load Twinkies into trucks were not allowed to load Wonder Bread, and vice versa.


multiply the trucks, the fuel, the maintenance and constant upkeep of the trucks (oil changes, flat tires, head gaskets transmissions and engine replacements), the commercial insurance on the trucks, the permits required by cities to operate on their roads, the virtual double wages paid for 2 employees to do the same job that 1 employee can and should be doing, meaning double healthcare and double benefit packages (bereavement pay etc) by 6,500.....makes CEO pay chump change....

even when it's 1$

None of what you quoted necessarily leads to the conclusion you drew, namely that the company had to pay twice as much as strictly required. 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. The truck drivers can probably do something else while their trucks are being loaded. Finally, as with the trucks, 2 people handling the Twinkies and 2 people handling the Wonderbread is no different from 4 people handling either product.

I actually agree with you that it's a silly requirement, and I don't think it could be fulfilled perfectly without some additional cost. But I don't for a moment believe that it actually doubled the costs for the company as you say.
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Re: Unions Shut Down Hostess

Postby Phatscotty on Tue Nov 27, 2012 4:40 am

MeDeFe wrote:
Phatscotty wrote:
The work rules imposed in union contracts required the company that makes Twinkies, which also makes Wonder Bread, to deliver these two products to stores in separate trucks. Moreover, truck drivers were not allowed to load either of these products into their trucks. And the people who did load Twinkies into trucks were not allowed to load Wonder Bread, and vice versa.


multiply the trucks, the fuel, the maintenance and constant upkeep of the trucks (oil changes, flat tires, head gaskets transmissions and engine replacements), the commercial insurance on the trucks, the permits required by cities to operate on their roads, the virtual double wages paid for 2 employees to do the same job that 1 employee can and should be doing, meaning double healthcare and double benefit packages (bereavement pay etc) by 6,500.....makes CEO pay chump change....

even when it's 1$

None of what you quoted necessarily leads to the conclusion you drew, namely that the company had to pay twice as much as strictly required. 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. The truck drivers can probably do something else while their trucks are being loaded. Finally, as with the trucks, 2 people handling the Twinkies and 2 people handling the Wonderbread is no different from 4 people handling either product.

I actually agree with you that it's a silly requirement, and I don't think it could be fulfilled perfectly without some additional cost. But I don't for a moment believe that it actually doubled the costs for the company as you say.


I spent many years in a couple of unions, and I understand that language.

Sure, you are right. But it shows the overall picture quite well.
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Re: Unions Shut Down Hostess

Postby Dukasaur on Tue Nov 27, 2012 10:00 am

MeDeFe wrote:
Phatscotty wrote:
The work rules imposed in union contracts required the company that makes Twinkies, which also makes Wonder Bread, to deliver these two products to stores in separate trucks. Moreover, truck drivers were not allowed to load either of these products into their trucks. And the people who did load Twinkies into trucks were not allowed to load Wonder Bread, and vice versa.


multiply the trucks, the fuel, the maintenance and constant upkeep of the trucks (oil changes, flat tires, head gaskets transmissions and engine replacements), the commercial insurance on the trucks, the permits required by cities to operate on their roads, the virtual double wages paid for 2 employees to do the same job that 1 employee can and should be doing, meaning double healthcare and double benefit packages (bereavement pay etc) by 6,500.....makes CEO pay chump change....

even when it's 1$

None of what you quoted necessarily leads to the conclusion you drew, namely that the company had to pay twice as much as strictly required. 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. The truck drivers can probably do something else while their trucks are being loaded. Finally, as with the trucks, 2 people handling the Twinkies and 2 people handling the Wonderbread is no different from 4 people handling either product.

I actually agree with you that it's a silly requirement, and I don't think it could be fulfilled perfectly without some additional cost. But I don't for a moment believe that it actually doubled the costs for the company as you say.

Wouldn't have doubled the costs, of course, but would have added to it substantially. A lot of retail outlets have very small orders, and of course they tend to be in urban areas, so the fuel wasted in traffic and the time required to drive to them is quite high. Overall, the cost of delivery relative to the value of the product is very high.

I know that when Hostess bought Frito-Lay, the savings in distribution costs was the top reason cited as motivating the merger. Why didn't they apply the same reasoning to other product lines?

Still, none of this excuses the management. If union work rules were the largest problem, why didn't they ask the union for work rules concessions instead of wage concessions?

Especially vis-a-vis the delivery situation. If I'm a business owner, and I have two delivery trucks running and I suspect one truck could do both routes, I'll think something like this: Each driver costs me $200/day, but each truck costs me $300/day, for a total of $1000/day. The drivers are going to be pissed off if I fire either one of them. (Obviously the one I fire, but even the other one will show a morale drop.) On the other hand, the trucks don't really care if I keep them or not. So, here's a plan. I'll combine the routes, sell one of the trucks, but keep both drivers. Each one can work half the week and spend the other half on standby at full pay. I'll be trimming my costs from $1000 to $700, which might not be as good as getting all the way to $500 but it's still a big savings. And the $200 is not pure loss; I'm getting an experienced fill-in if the other other calls in sick or quits unexpectedly, or in case business picks up. This kind of compromise is indeed possible and in some companies has been done successfully, but it requires a little bit of creative thinking. Oh, and it also requires thinking about your employees as being rational people instead of stereotyping them as "those union assholes."
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Re: Unions Shut Down Hostess

Postby oVo on Tue Nov 27, 2012 5:05 pm

Unions didn't shut down Hostess,
Corporate greed did.
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Re: Unions Shut Down Hostess

Postby thegreekdog on Tue Nov 27, 2012 5:08 pm

oVo wrote:Unions didn't shut down Hostess,
Corporate greed did.


I'm pretty sure it was corporate incompetence, unions, and a hostess of other factors. Not sure corporate greed was what did it. Plenty of successful companies pay their shareholders nice dividends and their officers high salaries and don't go out of business.
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Re: Unions Shut Down Hostess

Postby oVo on Tue Nov 27, 2012 5:18 pm

thegreekdog wrote:Plenty of successful companies pay their shareholders nice dividends and their officers high salaries and don't go out of business.

True, Wal-Mart is a prime example.
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Re: Unions Shut Down Hostess

Postby thegreekdog on Tue Nov 27, 2012 5:54 pm

oVo wrote:
thegreekdog wrote:Plenty of successful companies pay their shareholders nice dividends and their officers high salaries and don't go out of business.

True, Wal-Mart is a prime example.


Right. You're probably trying to make a point, but I'm not sure what it is.
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Re: Unions Shut Down Hostess

Postby stahrgazer on Fri Nov 30, 2012 7:32 pm

Tom Sullivan did a show on the Twinkies and the Wal-Mart "Black Thursday Walkout" the other night. A woman called in comparing Unionized Macy's 5-20 years ago (she worked there 15 years but left them 5 years ago) to non-Unionized Wal-Mart. As late as 5 years ago, Unionized-Macy's was paying minimum wage (just over $7), no benefits, and and employee had to be there for 18 months to get a (small) raise. While non-unionized Wal-Mart in the same city was paying over $9 an hour.

Not all unions are bad, and not all companies are good.

I heard today, the Hostess management is wanting its bonuses - I think they said it totals over $1billion worth of bonuses - that the guys who mis-managed the company are putting in a claim for with the bankruptcy court.

Hearing that makes me think, nope, Unions didn't shut down Hostess, management greed did.
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Re: Unions Shut Down Hostess

Postby Evil Semp on Fri Nov 30, 2012 10:31 pm

stahrgazer wrote:Tom Sullivan did a show on the Twinkies and the Wal-Mart "Black Thursday Walkout" the other night. A woman called in comparing Unionized Macy's 5-20 years ago (she worked there 15 years but left them 5 years ago) to non-Unionized Wal-Mart. As late as 5 years ago, Unionized-Macy's was paying minimum wage (just over $7), no benefits, and and employee had to be there for 18 months to get a (small) raise. While non-unionized Wal-Mart in the same city was paying over $9 an hour.

Not all unions are bad, and not all companies are good.

I heard today, the Hostess management is wanting its bonuses - I think they said it totals over $1billion worth of bonuses - that the guys who mis-managed the company are putting in a claim for with the bankruptcy court.

Hearing that makes me think, nope, Unions didn't shut down Hostess, management greed did.


The amount was $1.8 million.
http://www.jdjournal.com/2012/11/30/hos ... 8-million/

"Hostess claims that the bonuses for the top executives are needed in order to retain them as the liquidation process plays out for the company."

It's a shame the executives don't have the same frame of mind as scotty. They should be thankful that they have a job for another year but what they heck give them extra money.

Phatscotty wrote:Well, it's not very illogical for me. If my job wanted to cut me 5%, I wouldn't walk out. Maybe I would start looking around or something, but when I worked at a union job, we were taking cuts every year. Cuts in pay, cuts in benefits, giving up raises. the main reason it wasn't a big deal to me was because I was earning a damn good wage,
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Re: Unions Shut Down Hostess

Postby stahrgazer on Sat Dec 01, 2012 3:59 am

Evil Semp wrote:
stahrgazer wrote:Tom Sullivan did a show on the Twinkies and the Wal-Mart "Black Thursday Walkout" the other night. A woman called in comparing Unionized Macy's 5-20 years ago (she worked there 15 years but left them 5 years ago) to non-Unionized Wal-Mart. As late as 5 years ago, Unionized-Macy's was paying minimum wage (just over $7), no benefits, and and employee had to be there for 18 months to get a (small) raise. While non-unionized Wal-Mart in the same city was paying over $9 an hour.

Not all unions are bad, and not all companies are good.

I heard today, the Hostess management is wanting its bonuses - I think they said it totals over $1billion worth of bonuses - that the guys who mis-managed the company are putting in a claim for with the bankruptcy court.

Hearing that makes me think, nope, Unions didn't shut down Hostess, management greed did.


The amount was $1.8 million.
http://www.jdjournal.com/2012/11/30/hos ... 8-million/

"Hostess claims that the bonuses for the top executives are needed in order to retain them as the liquidation process plays out for the company."

It's a shame the executives don't have the same frame of mind as scotty. They should be thankful that they have a job for another year but what they heck give them extra money.

Phatscotty wrote:Well, it's not very illogical for me. If my job wanted to cut me 5%, I wouldn't walk out. Maybe I would start looking around or something, but when I worked at a union job, we were taking cuts every year. Cuts in pay, cuts in benefits, giving up raises. the main reason it wasn't a big deal to me was because I was earning a damn good wage,


Okay, 1.8million, it's still a lot of money for a company that's going under. I think the situation is worse even than, "be thankful to have a job for another year." The mindset of "get in, get mine, and frig everyone else," No company loyalty, no country loyalty - from guys at the top. Precisely why I'm no longer as conservative/pro-capitalism as I once was - seeing how "no morals, no ethics, no loyalty," is praised by far too many pro-capitalists.

With those types of guys in power as an example, can you really, really, blame "unions" or "union workers" for wanting to band together to be powerful to do what they can to "get in, get mine, and frig everyone else." ??? Aren't they just playing "follow the leader" when they do that?

I mean, really, why should the low level worker be more loyal, more willing to sacrifice, than the top dogs there? Is the exec who took a $1 "salary" in for some of that bonus, and if so, doesn't that change the supposed "sacrifice" he made? "No, no, don't worry about my salary, just give me a nice big bonus at the end of the year."

Hey, I'd work for a dollar "salary" if I'd get a million dollars (oh, excuse me, $1.8 million) even if I ran my company under the river, wouldn't you?

Also, if those execs were in for that "bonus" whether the company went under or not, how much did they really work at "bargaining" with the union? How much of that, "What do I care, I get a huge bonus whether we stay open or not," came to the bargaining table?
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Re: Unions Shut Down Hostess

Postby aad0906 on Sat Dec 01, 2012 10:02 am

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.
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Re: Unions Shut Down Hostess

Postby spurgistan on Sat Dec 01, 2012 2:51 pm

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.


The story says the $1.8 million is split among 19 senior execs.
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Re: Unions Shut Down Hostess

Postby Evil Semp on Sat Dec 01, 2012 4:04 pm

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.
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Re: Unions Shut Down Hostess

Postby patches70 on Sat Dec 01, 2012 5:38 pm

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.
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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?
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Re: Unions Shut Down Hostess

Postby Phatscotty on Sat Dec 01, 2012 6:45 pm

great post. Just reminding that the separate truck regulation where hostess and wonderbread cannot be mixed in the same truck is a union regulation (amongst other things). Sure, Hostess put up with it (no credit given) so in the end I agree that is how Hostess did it.

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Re: Unions Shut Down Hostess

Postby aad0906 on Sat Dec 01, 2012 7:54 pm

patches70 wrote:
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).


A company that is bankrupt can not simply cherrypick who they pay what and who they don't. They can't one hand hand default on the $2Bn pension obligations to employees and on the other hand pay bonuses to executives. If these bonuses were in fact retention bonuses needed to keep people around for the liquidation then the judge was 100% correct in approving it but I just want to make the point that bankrupt companies DO by law have to justify their payments.
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Re: Unions Shut Down Hostess

Postby Phatscotty on Sat Dec 01, 2012 8:02 pm

aad0906 wrote:
patches70 wrote:
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).


A company that is bankrupt can not simply cherrypick who they pay what and who they don't. They can't one hand hand default on the $2Bn pension obligations to employees and on the other hand pay bonuses to executives. If these bonuses were in fact retention bonuses needed to keep people around for the liquidation then the judge was 100% correct in approving it but I just want to make the point that bankrupt companies DO by law have to justify their payments.


I thought it was the case the employees decided they would rather not continue working or getting paid 5% less.... ( by Hostess anyways).
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Re: Unions Shut Down Hostess

Postby patches70 on Sat Dec 01, 2012 8:20 pm

aad0906 wrote:
patches70 wrote:
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).


A company that is bankrupt can not simply cherrypick who they pay what and who they don't. They can't one hand hand default on the $2Bn pension obligations to employees and on the other hand pay bonuses to executives. If these bonuses were in fact retention bonuses needed to keep people around for the liquidation then the judge was 100% correct in approving it but I just want to make the point that bankrupt companies DO by law have to justify their payments.


Of course they can't cherrypick. There is established bankruptcy law. Creditors come first. That's what certain people seem to forget or ignore. Those creditors being the those who are secured creditors (that includes shareholders) and they are first in line. Then come the unsecured creditors, that being the vendors (often) who get stuck real good often enough. Somewhere down the line after that is the union and the pension funds, who are pretty much fucked.
The sale propositions are contingent that the union is not included. For obvious reasons.
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Re: Unions Shut Down Hostess

Postby stahrgazer on Sun Dec 02, 2012 4:39 am

patches70 wrote: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.


OR
Management does what it was hired to do, and manage the company, including coming up with ideas that WILL work with today's model.

patches70 wrote:I'll tell you why-
Guess who is really paying those bonuses anyway? The creditors. Not you.


Well, yes and no. Those unemployed workers will now be going on unemployment, foodstamps, medicaid, housing aid, etc. and who pays that? We do.

Further, because the company will be defaulting on its debts and instead, paying its faulty management extra incentive to stick around and "manage the bankruptcy" that their poor decision-making//lack of appropriate forsight and market planning caused, those creditors will be claiming losses instead of income, so they won't be paying the taxes they would have been paying, so who takes up the slack? We do. Plus, those creidtors themselves, missing out on the 1.8million in debt that will instead be paid to the piss-poor managers, may have to lay off some workers (who will then be going on unemployment, foodstamps, medicaid, housing aid, etc.). And who pays for that? We do.

Finally, because their pension plan is now gone, those who counted on it for income in their later years will be relying more heavily on social security, medicare, medicaid, food stamps, housing aid, and frequently seniors also get to apply for assistance with paying utilities (electric, water, gas, trash pickup) and who pays for that? We do.

patches70 wrote:Of course they can't cherrypick. There is established bankruptcy law. Creditors come first. That's what certain people seem to forget or ignore. Those creditors being the those who are secured creditors (that includes shareholders) and they are first in line. Then come the unsecured creditors, that being the vendors (often) who get stuck real good often enough.


Not quite.
First will come the judge-approved management bonuses. Then will come the lawyers. That will probably wipe out any remaining assets that aren't sold with the brand.
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Re: Unions Shut Down Hostess

Postby patches70 on Sun Dec 02, 2012 9:50 am

stahrgazer wrote:
OR
Management does what it was hired to do, and manage the company, including coming up with ideas that WILL work with today's model.


That ship has sailed, dude. I'm sorry you don't seem to understand the concept of the PSM, and that's how it becomes a trap. Because people don't see it in any other light than hindsight.

stahrgazer wrote:
Well, yes and no. Those unemployed workers will now be going on unemployment, foodstamps, medicaid, housing aid, etc. and who pays that? We do.


You want to cut unemployment, foodstamps and other entitlements? Welcome to the Republican Party!

stahrgazer wrote:Further, because the company will be defaulting on its debts and instead, paying its faulty management extra incentive to stick around and "manage the bankruptcy" that their poor decision-making//lack of appropriate forsight and market planning caused, those creditors will be claiming losses instead of income, so they won't be paying the taxes they would have been paying, so who takes up the slack? We do. Plus, those creidtors themselves, missing out on the 1.8million in debt that will instead be paid to the piss-poor managers, may have to lay off some workers (who will then be going on unemployment, foodstamps, medicaid, housing aid, etc.). And who pays for that? We do.


Welcome to the recession. Don't worry, taxes will be going up in a few weeks to make up for all this lost tax revenue.
LOL at "faulty management extra incentive to stick around and 'manage the bankruptcy'...."
You still aren't getting it, the judges decision is SOP in bankruptcy law.



stahrgazer wrote:Finally, because their pension plan is now gone, those who counted on it for income in their later years will be relying more heavily on social security, medicare, medicaid, food stamps, housing aid, and frequently seniors also get to apply for assistance with paying utilities (electric, water, gas, trash pickup) and who pays for that? We do.


Lemme guess, you would have supported a government bailout of Hostess instead? Again, here you are ignoring the shareholders and focusing only on the workers. Yeah, their situation sucks, but the shareholders with investments in Hostess are relying on having that money for their retirement as well.
That's what you don't get, the judge in a bankruptcy has to protect the legal parties. The creditors. Secured and unsecured, in that order.
Pensions are a benefit, not a secured debt. Don't you get that?
It's not like Hostess can just print money like government can to pay federal pensions.


stahrgazer wrote:Not quite.
First will come the judge-approved management bonuses. Then will come the lawyers. That will probably wipe out any remaining assets that aren't sold with the brand.


What part of "taking a haircut" don't you understand? Stop just repeating what I said and come up with an actual point or just say "I agree".
Looking at your ignorance of the process, is there any wonder lawyers and executives with experience in liquidation are needed? God forbid you were in charge of the liquidation, you'd be a disaster.
Hostess is a corpse, and like all corpses there is a picking order to the animals that feast on it. You don't have the wisdom nor the knowledge to reorder that picking order.

It would have been much worse for the long run if the government had stepped in and did for Hostess what it did for the auto industry.
Can you figure out why that would have been worse? If you can do that then you'll have answered your question (and illustrated my point) on why it's done like this.
It's for the best that it goes down like this. The sooner this dead company is liquidated the sooner someone new can step in and take over the niche. The former workers can then work for this new party, who hopefully will be better managed (and at the same time get off unemployment and all that other stuff your upset that "we"have to pay for).
The things you seemed worried about are short term, there is a bigger picture here that you can't seem to share because you are an ideologue. The class warfare BS is just noise and not at all close to be correct.
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Re: Unions Shut Down Hostess

Postby Timminz on Sun Dec 02, 2012 10:07 am

Point of order: shareholders are actually quite low on the list of those who will get anything back from a liquidated company. They are entitled to any residual equity after debts and other contractual obligations have been settled.
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Re: Unions Shut Down Hostess

Postby Phatscotty on Sun Dec 02, 2012 10:22 am

stahrgazer wrote:
patches70 wrote: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.


OR
Management does what it was hired to do, and manage the company, including coming up with ideas that WILL work with today's model.

patches70 wrote:I'll tell you why-
Guess who is really paying those bonuses anyway? The creditors. Not you.


Well, yes and no. Those unemployed workers will now be going on unemployment, foodstamps, medicaid, housing aid, etc. and who pays that? We do.


it is my understanding that the employees chose unemployment... kind of ruins your point
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Re: Unions Shut Down Hostess

Postby PLAYER57832 on Sun Dec 02, 2012 10:31 am

Phatscotty wrote:
aad0906 wrote:
patches70 wrote:
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).


A company that is bankrupt can not simply cherrypick who they pay what and who they don't. They can't one hand hand default on the $2Bn pension obligations to employees and on the other hand pay bonuses to executives. If these bonuses were in fact retention bonuses needed to keep people around for the liquidation then the judge was 100% correct in approving it but I just want to make the point that bankrupt companies DO by law have to justify their payments.


I thought it was the case the employees decided they would rather not continue working or getting paid 5% less.... ( by Hostess anyways).

They thought it unreasonable that Hostess decide to cut THEIR pay, claim they could not do better -- while at the same time giving hefty bonuses to the executives. From the data I have seen, even one of those bonuses would have covered the employee demands.

That debate is really about how much workers deserve versus executives. The idea seems to be growing that workers are expendable and not worthy of anything more than pittances, and only executives really deserve payment.

Beyond that.. Hostess failed because it sells products heavy on lard and sugar, when the public at large is asking for healthier options that ALSO taste good.

In short, like many companies, the compensation for exectives had more to do with stocks and stock profits than maintaining a good production and quality product.
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Re: Unions Shut Down Hostess

Postby Phatscotty on Sun Dec 02, 2012 11:00 am

PLAYER57832 wrote:
Phatscotty wrote:
aad0906 wrote:
patches70 wrote:
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).


A company that is bankrupt can not simply cherrypick who they pay what and who they don't. They can't one hand hand default on the $2Bn pension obligations to employees and on the other hand pay bonuses to executives. If these bonuses were in fact retention bonuses needed to keep people around for the liquidation then the judge was 100% correct in approving it but I just want to make the point that bankrupt companies DO by law have to justify their payments.


I thought it was the case the employees decided they would rather not continue working or getting paid 5% less.... ( by Hostess anyways).

They thought it unreasonable that Hostess decide to cut THEIR pay, claim they could not do better -- while at the same time giving hefty bonuses to the executives. From the data I have seen, even one of those bonuses would have covered the employee demands.

That debate is really about how much workers deserve versus executives. The idea seems to be growing that workers are expendable and not worthy of anything more than pittances, and only executives really deserve payment.

Beyond that.. Hostess failed because it sells products heavy on lard and sugar, when the public at large is asking for healthier options that ALSO taste good.

In short, like many companies, the compensation for exectives had more to do with stocks and stock profits than maintaining a good production and quality product.


Damnit! I'm not making a statement about what can or can't be justified, or who deserves what, or what is fair and what isn't!

The statement is that the employees CHOSE to stop working. It was in their hands, they made it this way, that is why they are unemployed. all that means is the guilt trips and the finger pointing doesn't matter. Maybe their decision was the right one (I don't see how) maybe it was the wrong one (I think so), but the company could have stayed open, and the employees could still have their jobs (even if it's just a matter of time for Hostess)

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Re: Unions Shut Down Hostess

Postby Phatscotty on Sun Dec 02, 2012 11:01 am

"I want you to remember that, to remind you to stay out of my way. In all the years to come, in all your most private moments, I want you to remember my hand at your throat. I want you to remember the one man who beat you."
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