Unions Shut Down Hostess

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Unions Shut Down Hostess

Postby Night Strike on Fri Nov 16, 2012 10:04 am

What's absolutely ridiculous is that all these strikers will just get to live off the government for a long time. They chose to quit their jobs, so they shouldn't get unemployment checks. But congrats to the unions: they'd rather be out of a job than working for lower pay.

Hostess, the makers of Twinkies, Ding Dongs and Wonder Bread, is going out of business after striking workers failed to heed a Thursday deadline to return to work, the company said.

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Hostess CEO Gregory F. Rayburn said in announcing that the firm had filed a motion with the U.S. Bankruptcy Court to shutter its business. “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”

Hostess Brands Inc. had earlier warned employees that it would file to unwind its business and sell off assets if plant operations didn't return to normal levels by 5 p.m. Thursday. In announcing its decision, Hostess said its wind down would mean the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores in the United States.

Hostess suspended bakery operations at all its factories and said its stores will remain open for several days to sell already-baked products.

The Irving, Texas-based company had already reached a contract agreement with its largest union, the International Brotherhood of Teamsters. But thousands of members in its second-biggest union went on strike late last week after rejecting in September a contract offer that cut wages and benefits. Officials for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union say the company stopped contributing to workers' pensions last year.

NBC's Savannah Guthrie read a statement on "Today" from the bakers' union that said: “Despite Greg Rayburn’s insulting and disingenuous statements of the last several months, the truth is that Hostess workers and the union have absolutely no responsibility for the failure of this company. That responsibility rests squarely on the shoulders of the company’s decision makers.”

Rayburn responded that he had been “pretty straightforward in all the town hall meetings I’ve done at our plants to say that in this situation I think there is blame that goes around for everyone.”

He denied that the decision to shut down could be a last ditch negotiation tactic to get the union back to the table.

“It’s over,” he said. “This is it.”

Rayburn, who first joined Hostess earlier this year as a restructuring expert, had earlier said that many workers crossed picket lines this week to go back to work despite warnings by union leadership that they'd be fined.

"The problem is we don't have enough crossing those lines to maintain normal production," Rayburn told Fox Business.

Hostess said that production at about a dozen of the company's 33 plants had been seriously affected by the strike. Three plants were closed earlier this week.

The privately held company filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade. The company cited increasing pension and medical costs for employees as one of the drivers behind its latest filing. Hostess had argued that workers must make concessions for it to exit bankruptcy and improve its financial position.

The company, founded in 1930, was fighting battles beyond labor costs, however. Competition is increasing in the snack space and Americans are increasingly conscious about healthy eating. Hostess also makes Dolly Madison, Drake's and Nature's Pride snacks.

If the motion is granted, Hostess would begin closing operations as early as Tuesday.

"Most employees who lose their jobs should be eligible for government-provided unemployment benefits," Hostess said.

http://www.nbcdfw.com/news/national-international/NATL-Twinkies-Maker-Hostess-Going-Out-of-Business-179643161.html
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Re: Unions Shut Down Hostess

Postby AndyDufresne on Fri Nov 16, 2012 10:27 am

Hasn't Hostess been on rocks for like...a decade? I thought I recalled them declaring bankruptcy earlier in the 2000's. It also sounds like they took out a loan and couldn't pay it back, and have been wallowing in the red for a while. It sounds less like the fault of their workers, and more about those running the company, especially the new folk who took over when they declared bankruptcy the first time a decade ago.


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Re: Unions Shut Down Hostess

Postby Night Strike on Fri Nov 16, 2012 10:35 am

Yep, they've had several money problems over the years, especially as people became more health-conscience. However, that doesn't mean they had to immediately close their doors and stop production. The union workers that refused to restructure were the final nail the coffin.
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Re: Unions Shut Down Hostess

Postby AndyDufresne on Fri Nov 16, 2012 10:42 am

So it sounds the headline should be: "Hostess Run Into the Ground by a Changing America, though Unions Give it a Little Kick" Haha.


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Re: Unions Shut Down Hostess

Postby Metsfanmax on Fri Nov 16, 2012 11:23 am

No great loss to America. We can live with fewer things that contribute to obesity.
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Re: Unions Shut Down Hostess

Postby aad0906 on Fri Nov 16, 2012 11:29 am

You are aware that the unions already gave substantial concessions to the company in 2009 resulting in $110 million savings, right? And that management then rewarded themselves with 80% salary raises? And that the company is owned by private equity firms and it has a highly leveraged capital structure which give little margin for changes in market conditions such as increasing commodity prices (flour, corn)? And that the company rejected a bid from a competitor? Hostess's problems mainly lies in lack of innovation and modernization and falling sales which they could not afford given the highly leveraged capital structure.

No, of course the workers are at fault, they would rather go on benefits then keep their job right? Lest you forget that if the company goes bankrupt, the employees can say goodbye to their $2 billion UNFUNDED pension rights? But if the company shuts down, they will simply sell the assets (brandname, recipe's, trademarks) and the Private Equity secured loans will be repaid. Too bad for the retirees and the 1,00's of unsecured creditors.

Welcome to the world of private equity
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Re: Unions Shut Down Hostess

Postby Dukasaur on Fri Nov 16, 2012 11:35 am

Metsfanmax wrote:No great loss to America. We can live with fewer things that contribute to obesity.

Shutting down Hostess won't reduce obesity, any more than shutting down Seagrams would reduce alcoholism.

If people want a product they will get it from somewhere. (Even if you were to ban the product, a black market for it would emerge.) It's always fun to paint a target on someone (like MacDonalds a few years back) but ultimately the consumer makes the decision of what to consume, and the vendor is just scrambling to fill the demand.
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Re: Unions Shut Down Hostess

Postby thegreekdog on Fri Nov 16, 2012 11:36 am

Hostess was failing miserably for years. I don't blame the union.
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Re: Unions Shut Down Hostess

Postby Frigidus on Fri Nov 16, 2012 12:47 pm

Ultimately the relationship between union and company is a two way street. I'd need to know more information about the situation before I could tell which side is more at fault.
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Re: Unions Shut Down Hostess

Postby Metsfanmax on Fri Nov 16, 2012 12:56 pm

Dukasaur wrote:
Metsfanmax wrote:No great loss to America. We can live with fewer things that contribute to obesity.

Shutting down Hostess won't reduce obesity, any more than shutting down Seagrams would reduce alcoholism.

If people want a product they will get it from somewhere. (Even if you were to ban the product, a black market for it would emerge.) It's always fun to paint a target on someone (like MacDonalds a few years back) but ultimately the consumer makes the decision of what to consume, and the vendor is just scrambling to fill the demand.


No one that I know of demands access to Twinkies like people demand access to alcohol (except for Woody Harrelson's character in Zombieland). Most people buy Twinkies because they're easy to buy in a grocery store, and cheap, not because they particularly love Twinkies. If you banned Twinkies, my bet is there would be no public outrage and consequent Twinkie black market.
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Re: Unions Shut Down Hostess

Postby Dukasaur on Fri Nov 16, 2012 1:25 pm

Metsfanmax wrote:
Dukasaur wrote:
Metsfanmax wrote:No great loss to America. We can live with fewer things that contribute to obesity.

Shutting down Hostess won't reduce obesity, any more than shutting down Seagrams would reduce alcoholism.

If people want a product they will get it from somewhere. (Even if you were to ban the product, a black market for it would emerge.) It's always fun to paint a target on someone (like MacDonalds a few years back) but ultimately the consumer makes the decision of what to consume, and the vendor is just scrambling to fill the demand.


No one that I know of demands access to Twinkies like people demand access to alcohol (except for Woody Harrelson's character in Zombieland). Most people buy Twinkies because they're easy to buy in a grocery store, and cheap, not because they particularly love Twinkies. If you banned Twinkies, my bet is there would be no public outrage and consequent Twinkie black market.

I wonder if a timely Twinkie ban would have saved Harvey Milk...:)
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Re: Unions Shut Down Hostess

Postby Nola_Lifer on Fri Nov 16, 2012 1:49 pm

Competition is increasing in the snack space and Americans are increasingly conscious about healthy eating.


To be honest, who eats that processed crap?

Another notes, they filed for chapter 11 in January
Hostess Brands was acquired in 1995 by Interstate and today employs 22,000 people in 41 bakeries. But Interstate succumbed in September 2004 to various ailments, including the low-carb Atkins and South Beach Diets.


Why the hate on the Unions?
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Re: Unions Shut Down Hostess

Postby Baron Von PWN on Fri Nov 16, 2012 2:35 pm

Nola_Lifer wrote:
Competition is increasing in the snack space and Americans are increasingly conscious about healthy eating.


To be honest, who eats that processed crap?

Another notes, they filed for chapter 11 in January
Hostess Brands was acquired in 1995 by Interstate and today employs 22,000 people in 41 bakeries. But Interstate succumbed in September 2004 to various ailments, including the low-carb Atkins and South Beach Diets.


Why the hate on the Unions?


it fits into his ongoing narrative of "entitlement" ruining america and other conservative tropes.
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Re: Unions Shut Down Hostess

Postby saxitoxin on Fri Nov 16, 2012 3:35 pm

Metsfanmax wrote:
Dukasaur wrote:
Metsfanmax wrote:No great loss to America. We can live with fewer things that contribute to obesity.

Shutting down Hostess won't reduce obesity, any more than shutting down Seagrams would reduce alcoholism.

If people want a product they will get it from somewhere. (Even if you were to ban the product, a black market for it would emerge.) It's always fun to paint a target on someone (like MacDonalds a few years back) but ultimately the consumer makes the decision of what to consume, and the vendor is just scrambling to fill the demand.


No one that I know of demands access to Twinkies like people demand access to alcohol (except for Woody Harrelson's character in Zombieland). Most people buy Twinkies because they're easy to buy in a grocery store, and cheap, not because they particularly love Twinkies. If you banned Twinkies, my bet is there would be no public outrage and consequent Twinkie black market.


There's a premium endcap display next to the register right now at every 7-11 for Hostess. I'm sure Li'l Debbie would love to get her whore hands on that endcap. Now that Hostess is gone it just means Li'l Debbie will be able to increase her market penetration, not that 7-11 is going to start selling carrots. Most likely, as Hostess is auctioning their assets they'll sell the Twinkie name and recipe to Li'l Debbie and the only thing that will change is that Li'l Debbies smug, ginger mug will appear on Twinkie packaging.

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The Twinkie and Snowball brands are definitely not going away. They'll just be whipped up in a different bakery.
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Re: Unions Shut Down Hostess

Postby Funkyterrance on Fri Nov 16, 2012 5:23 pm

saxitoxin wrote:There's a premium endcap display next to the register right now at every 7-11 for Hostess. I'm sure Li'l Debbie would love to get her whore hands on that endcap.



Don't you EVER talk about her that way. I've got half a mind to pimp slap you across this thread.

I'm sure that the hostess workers cracked all kinds of sexist jokes about Debbie in the breakroom at the hostess plant but who's laughing now?
Tbh, I think it's even somewhat comical that the hostess workers went on strike in the first place. Did they think that their job of producing rot-gut pastries was that important? They'll loaf for a while until their unemployment runs out and then come crawling on their hands and knees to to Little Debbie's doorstep. Ginger-SNAP.
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Postby 2dimes on Fri Nov 16, 2012 5:47 pm

Dude that's a totally old picture. She's 52 now.
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Re: Unions Shut Down Hostess

Postby Phatscotty on Fri Nov 16, 2012 6:31 pm

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Re: Unions Shut Down Hostess

Postby Metsfanmax on Fri Nov 16, 2012 7:05 pm

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Re: Unions Shut Down Hostess

Postby notyou2 on Fri Nov 16, 2012 7:06 pm

Be thankful. Vachon will move into the void and their products are far superior to Hostess.

http://www.vachon.com/en/history/#1990 Look to the lower left.
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Re: Unions Shut Down Hostess

Postby nietzsche on Fri Nov 16, 2012 7:11 pm

Unions can be frivolous, whats the point of being the final nail in the company's coffin? Who's gonna give them a job now?
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Re: Unions Shut Down Hostess

Postby saxitoxin on Fri Nov 16, 2012 7:15 pm

notyou2 wrote:Be thankful. Vachon will move into the void and their products are far superior to Hostess.

http://www.vachon.com/en/history/#1990 Look to the lower left.


too late; word on the street is that nietzsche is at the front of a convoy of Bimbo Brands trucks queued at the Nuevo Laredo border crossing and ready to roll

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coming soon to the 7-11 ... pick-up a Bimbo snack cake and a Piñata ...

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Re: Unions Shut Down Hostess

Postby nietzsche on Fri Nov 16, 2012 7:54 pm

Bimbo's bakery has not as much frisco for American's taste.
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Re: Unions Shut Down Hostess

Postby Phatscotty on Fri Nov 16, 2012 9:18 pm

Tell me if this is right or not. The offer from the company, they say to stay in business, was a 5% pay cut. And the unions turned it down.

How much is 5% of 28k? about $1400? What's the difference than if their health insurance costs rose 5% and were asked to pay? Certainly, health insurance average costs rose 10% last year....so.....

If I have this right, why did they turn down the 5% paycut? when the alternative is unemployment and yet another major blow to the American economy?
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Re: Unions Shut Down Hostess

Postby notyou2 on Fri Nov 16, 2012 9:26 pm

Not sure how you see this as a major blow to the economy? Unless a great deal of the product they made was shipped outside of the US.
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Re: Unions Shut Down Hostess

Postby Phatscotty on Fri Nov 16, 2012 9:28 pm

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