Twinkies Dead

[hambone]

so what

[sped372]

[ruckman101]

Choke. Little Debbie product seems less sorta kinda passable as deserving of the moniker of "food" than even the toxic sorta kinda food-like product Hostess has been foisting on us. Hostess, gag. Little Debbie, I'm sorry, double gag. I speak from the experience of weaker moments of culinary and budgetary food purchasing experiences.

The issue I have is that Hostess is blaming the unions for the demise of their company rather than owning up to the fact their product is toxic to ingest.


neal

[satchmo]

The issue I have is that Hostess is blaming the unions for the demise of their company rather than owning up to the fact their product is toxic to ingest.


neal

I agree that Twinkies are toxic. But what about Wonder Bread? It builds strong bodies 12 ways, right?

Tim

[ruckman101]

A concept burnt into my psyche. Twelve different directions to launch conspiratorial conjecture. I bet you could die of starvation on a diet of only Wonder Bread™.


neal

[Reid]

Wonder Bread doesn't seem to have the ability to mold. Maybe that's the Wonder in it, but I don't think it deserves to be called bread.

[Hippie]

I though this thread was going to be about some young, effeminate, skinny gay male passing away.

[TrollFromDownBelow]

I read an article or two about this, kinda interesting. They were in bankruptsy and trying to renogotiate with the unions. Primary sticking point was over pension liability. What was unique with this situation is several unions had consolidated, so the pension $$ liability ballooned to include many more workers than what Hostess employed. The management team running Hostess said they could not afford a strike during the bankruptsy period (I believe there may have been a court order to this affect, but don't quote me), the biggest union which had 2/3 of the employees struck anyways. After a few days they had to shut it down. I know i'm missing a lot of facts here...but that is the gist.

However, never fear, I'm sure someone will pickup the name(s) of their popular products and you will soon again be able to enjoy those golden delicious snacks that have a shelf life of 20 years. :)

[Sylvester]

I was still surrounded by my Republican teammates when this came up. My vocal co-worker blamed this squarely on the unions and how things have and will progress under Obama. The ten second Fox Friends sound bytes really do stick in some heads as "opinions".

Alas poor Twinkie the Kid, currently unemployed. I ate quite a few of you as a kid, ya cake.



Is this the end of the Twinkie Cake?

[Velokid1]

Get your Twinkies and your Wonder Bread now, because what you see in stores is the last of them. (At least until the brands are sold at auction and revived.) Hostess Brands has announced that it will liquidate, blaming a strike by workers in one of its unions as they rejected a contract that called for them to make major concessions on wages and benefits. The workers had taken concessions to help the company survive a previous bankruptcy, and this time around when the call for cuts came, members of the Teamsters narrowly accepted them while members of the Bakery, Confectionery, Tobacco Workers, and Grain Millers union overwhelmingly said no and went on strike. According to the company, it's all the workers' fault:

"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," said CEO Gregory Rayburn in a statement.

Of course, Hostess management had already claimed that the strike would be responsible for the closings of specific plants—when it had already planned to close plants even if the workers accepted the cuts and stayed at work. BCTGM President Frank Hurt says the workers understood who they were dealing with:

Our members know that the plans all along of the Wall Street investors currently in control of this company did not include the operation of Hostess Brands any longer than it takes to sell the company in whole—or in part—in a way that will maximize the profits of these vulture capitalists regardless of the impact on the workforce.

Workers were being asked to accept cuts, but top executives had gotten massive raises as Hostess was about to enter bankruptcy. Investments in the company's future that had been promised as part of restructuring after the previous bankruptcy were never made. And as for the management, put in place by the private equity companies that now own Hostess, Hurt says:

Unfortunately however, for the past eight years management of the company has been in the hands of Wall Street investors, "restructuring experts", third-tier managers from other non-baking food companies and currently a "liquidation specialist". Six CEO’s in eight years, none of whom with any bread and cake baking industry experience, was the prescription for failure.

This is a Mitt Romney-style deal. Throughout the campaign, we read about Romney's past deals that went very much like what's happening to Hostess. Now we're watching it in real time—and seeing how when workers fight back, they're targeted for blame.

[TrollFromDownBelow]

it's not quite as simplistic as the article quoted above states.. below is an excerpt, you can read the whole article here...

http://management.fortune.cnn.com/2012/ ... -bankrupt/


"Finally, there are the woebegone Teamsters. They have plenty of skin as well -- and feel as if they've been fleeced out of almost $100 million from Hostess after the company "temporarily" ceased making union pension contributions last August. That move by Hostess was a breach of its collective-bargaining agreement with the unions. The Teamsters' leadership has fulminated to its membership about the hedge funds in particular. "The financial folks make a living of feeding off distressed companies," Hall says. "They lose sight of the fact that there are real families with livelihoods at stake." At local unions across the country, the hedgies have become the devil incarnate.

In trying to shed costs, Hostess is gunning for what are known as MEPPs -- multi-employer pension plans -- which it is required to participate in under its labor agreements with the unions.

MEPPs, which grew in popularity back in the union glory days of the 1950s and '60s, were designed for companies within an industry to share pension burdens. There are nearly 1,500 MEPPs in the country, covering more than 10 million workers. These mammoth defined-benefit plans -- employers, not workers, make the contributions -- were especially attractive to unions, as they allowed workers to move easily between companies.

Trouble with MEPPs is, if some employers go out of business, the remaining companies have to pick up the shortfall in funding benefits. When there are too few employers left standing, the fund is in trouble. According to a March research report by Credit Suisse, MEPPs are now underfunded by $369 billion. A third of the 40 MEPPs to which Hostess contributes are among the most underfunded plans in the country.

At the bargaining table, week after week, Hostess and the Teamsters have gone at it over the MEPPs, which Hostess contends are at the heart of its woes. Perella Weinberg's Michael Kramer has squared up against Harry Wilson, the financial adviser retained by the Teamsters. Monarch's Herenstein has been there. So has a representative from Silver Point. Though all are cordial -- somebody once served Hostess snacks -- they've yet to achieve a middle ground.
Gregory Rayburn, Hostess CEO

Gregory Rayburn, Hostess CEO

Hostess has proposed having workers themselves contribute to a single pension plan or, alternatively, switching to a pension arrangement in which Hostess would contribute to only a handful of MEPPs. In the latter proposal, Hostess's annual contributions would go down from the required $100 million to $25 million or so. (If Hostess is allowed to pull out of the MEPPs, the plans would have claims against the company, but as unsecured creditors they would come away with little or nothing.)

While the Teamsters have rejected that proposal, they've indicated a willingness to accept reduced contributions -- but only with the current MEPP structure in place. In April the Teamsters offered a pension holiday until next spring, and then a contribution level of 45% to 60% over the remaining three years of the collective-bargaining agreement. Hostess says that even that half a loaf is untenable. In May the bankruptcy judge appeared to share that view, ruling the current pension arrangement "creates too much uncertainty for any entity willing to commit substantial amounts of capital … to turn this company around."

Hostess has also complained that the Teamsters, who have 1.4 million members overall, might be sacrificing the interests of 7,900 Teamsters workers at Hostess to the long-term interests of the union as a whole. Even if the union can reach a deal with Hostess and investors, all parties would still have to turn to the wage concessions and work-rule changes that the company insists on -- and in return for which the Teamsters want a piece of the company. The Devil Dogs will be in the details.

It's a miserable state of affairs, even as both sides as recently as mid-July professed optimism that a settlement might be near. But despite the mercy that bankruptcy law permits, perhaps the staggering Hostess zombie in the financial graveyard ought not to be fed anymore. While Hostess may yet come out of bankruptcy again -- and Twinkies surely will still be made by somebody regardless -- a different conclusion seems right: At long last, Hostess may have reached its ultimate expiration date."

Oh yes, and before anyone brands me as a cold hearted, Republican/capitalist lemming.... I did vote for Obama the last two elections (although admit to doing a split ticket on other positions).

[Velokid1]

What is your take on the 9 executives who gave themselves 200-300% raises this year? The CEO gave himself a raise from $750,000 to $1.55 million. That's really hard for me to understand.

[Hippie]

What is your take on the 9 executives who gave themselves 200-300% raises this year? The CEO gave himself a raise from $750,000 to $1.55 million. That's really hard for me to understand.

It's not hard to understand. They essentially vote for their own pay. They are probably megalomaniacs who are used to stealing the fruits of other's labor and adding it to their own.
I see average American 21st century CEOs in that...but I am old enough to remember when Americans were good at business. That generation is dead or retired...and that's why we get spanked in the world markets.

[Velokid1]

Can anyone lay all or even most of the blame for this one on unions when we are talking about a company run by people who so obviously do not have the company's viability and financial health in mind?

Note that PBR is likely buying Hostess.

[RussellK]

How is it possible to negotiate withdrawal liability. I thought that was determined by ERISA.