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Unions, huh?
2 years ago

Fox Ignores Hostess' Array Of Troubles To Scapegoat Union For Liquidation
November 16, 2012 4:20 PM EST ››› DAVID SHERE

Fox Blames Bakers Union For Hostess Liquidation
 

Fox News Anchors Blame The Union And A "Labor Dispute" For Putting "18,000 Jobs On The Line." Martha MacCallum, co-host of Fox News' America's Newsroom, introduced a segment on the Hostess bankruptcy by saying the company is "blaming a worker's strike for crippling their ability to make and deliver their products." At the end of the report, co-host Bill Hemmer blamed the coming job losses at the company on "a labor dispute," suggesting that the union had put "18,000 jobs on the line." MacCallum said the employees were "paying dues to the union and then the union won't make a deal." [Fox News, America's Newsroom, 11/16/12]
 

But Hostess Was A Troubled Company That Had Recently Emerged From A Previous Bankruptcy
 

Reuters: Hostess Filed For Its First Bankruptcy In 2004. In March, Reuters reported that Hostess "filed for its first bankruptcy in 2004, citing declining sales, high food costs, excess capacity and worker benefit expenses." [Reuters, 3/6/12]
 

Forbes: The Company Exited Bankruptcy In 2009. In July, Forbes reported that "Hostess was able to exit bankruptcy in 2009" because of an "equity infusion of $130 million" from a private equity firm, as well as "substantial concessions by the two big unions" and lenders that "agreed to say in the game rather than drive Hostess into liquidation." [Forbes, 7/26/12]

Huffington Post: Hostess Re-Entered Bankruptcy In 2012. In January, The Huffington Post reported that "Hostess Brands is hoping to cut its high costs as it heads back into bankruptcy protection for the second time in less than a decade." [The Huffington Post, 1/11/12]
 

Hostess' First Bankruptcy Was Expensive And Did Not Improve The Company's Prospects

Reuters: Hostess' Entered "First Bankruptcy With $648.5 Million In Debt, And Came Out With More Than $800 Million." Reuters reported that after Hostess filed for its first bankruptcy in 2004, "it did not deal with its debt":
 

It tackled some issues -- closing bakeries and simplifying some union contracts -- but it did not deal with its debt. It went into the first bankruptcy with $648.5 million in debt, and came out with more than $800 million, according to court documents. [Reuters, 3/6/12]

Reuters: Hostess "Spent More Than $170 Million On Professional Fees" In Its First Bankruptcy. Reuters further reported that in its first bankruptcy, Hostess spent more than $170 million on professional fees:
 

Each time a company goes bankrupt, it must pay for lawyers and advisers not only for itself, but for its major creditors. In its first bankruptcy, Hostess spent more than $170 million on professional fees, based on its monthly operating reports. [Reuters, 3/6/12]
 

NY Times: Hostess Entered Bankruptcy In 2012 With Debts And Liabilities That Exceeded Its Assets. In January, The New York Times' DealBook reported that Hostess had "more than $850 million of secured debt outstanding" as well as "$180 million in accrued workers compensation liabilities." The Times further reported that "[a]nother $50 million to $60 million is outstanding to trade creditors, plus $36 million in lease obligation" and that the company was "going to lay a $75 million debtor-in-possession loan on top of that." The Times added that "all this from a company with assets of just over $980 million." [The New York Times, Dealbook, 1/13/12]
 

Hostess Asked Unions For More Pay Cuts Despite "Substantial Concessions" In The Past

Forbes: Hostess Exited Bankruptcy Because Of "Substantial Concessions By The Two Big Unions." Forbes explained that Hostess was able to exit bankruptcy in 2009 for three reasons, including that "substantial concessions" were made "by the two big unions" -- the Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union. Forbes further explained that "annual labor cost savings to the company were about $110 million" and that "thousands of union members lost their jobs." [Forbes, 7/26/12]
 

Hostess Had Stopped Contributing To Pensions And Wanted To Cut Worker Pay Further. According to The Kansas City Star, union leaders reported that Hostess had stopped contributing to workers' pensions and wanted to cut wages and benefits "by 27 to 32 percent":
 

The bakery workers union said the contract would cut wages and benefits by 27 to 32 percent, including an immediate 8 percent wage cut.

Continued:

 

2 years ago

Union officials said the company stopped contributing to the workers' pensions last year, and 92 percent of union members voted to reject the contract in September. A bankruptcy court judge allowed the company to force the union to accept the new collective bargaining agreement.
 

"Hostess Brands is making a mockery of the labor relations system that has been in place for nearly 100 years," said Frank Hurt, international president of the union. [The Kansas City Star, 11/12/12]
 

Hostess Raised Executive Salary By 35% To 80%. According to The Wall Street Journal, in April Hostess' creditors noted that Hostess had dramatically increased executive pay, including increasing CEO compensation from $750,000 to $2.25 million. According to the Journal, Hostess' creditors called the move "a possible effort to 'sidestep' Bankruptcy Code compensation programs":
 

Last July, the court documents said, the compensation committee of Hostess's board approved an increase in then-chief executive Brian Driscoll's salary from to $2.55 million from around $750,000. The company had hired restructuring lawyers in March 2011, the creditors said, and filed for bankruptcy protection on Jan. 11.
 

Besides Mr. Driscoll, "other executives' salaries were increased by from 35% to 80%," the creditors said. The documents said that Mr. Driscoll subsequently renounced a portion of the increase while "other executives did not appear to have done so." Besides Mr. Driscoll, two other executives who saw their salaries increase have also left the company, according to the spokesman.[The Wall Street Journal, 4/4/12]
 

Hostess Had Many Problems Beyond Labor Costs

 

CNBC: After Bankruptcy Hostess' "Sales Declined And Attempts To Roll-Out New Products More In Line With Changing Consumer Tastes Flopped." CNBC reported that the first round of bankruptcy "wasn't enough to save" Hostess, adding: "The company's sales declined and attempts to roll-out new products more in line with changing consumer tastes flopped." [CNBC, 11/16/12]
 

Forbes: Hostess Has Had Six CEOs In A Decade. When CEO Greg Rayburn took over Hostess in March 2012, he became the sixth CEO of the company in a decade. [Forbes, 7/26/12]
 

Associated Press: "Hostess' Snacks Don't Neatly Fit Into The U.S. Trend Toward A Healthier Lifestyle." In a report on the second bankruptcy, the Associated Press reported that "health-conscious Americans favor yogurt and energy bars over the dessert cakes and white bread they devoured 30 years ago." AP further noted that "Hostess' snacks don't neatly fit into the U.S. trend toward a healthier lifestyle that includes a diet rich in whole wheat foods, fruits and vegetables." [Associated Press, 1/11/12, via The Huffington Post]
 

Wash. Post: Hostess Has Been "Rife With ... Problems" Beyond Labor Issues, Including "Management's Failure To Freshen Up A Stale Product Line." In January, The Washington Post reported that the "failure of the [Hostess] brand, for decades a staple of American kids' diets, is a parable, rife with the problems that have plagued some of the country's oldest and most famous brands -- a combination of pension burdens, labor rules, crippling debt from financial engineers and management's failure to freshen up a stale product line and keep up with consumers' changing tastes." [The Washington Post, 1/11/12]
 

Wash. Post: January Bankruptcy Filing Shows Hostess "Would Have Lost Money Without Any Pension Costs At All." The Washington Post reported in January that Hostess "lost $250 million in the less than three years since it emerged from its previous bankruptcy. That means it would have lost money without any pension costs at all." The Post noted that Hostess "lost money in 30 of the past 37 quarters." [The Washington Post, 1/11/12]
 

NY Times: Hostess "Does Not Have Much Of A Finance Department." In a report on the second bankruptcy, The New York Times' DealBook noted that "something is a bit odd at Hostess." The Times reported:
 

The issue here is the corporation itself. The first clue that something is a bit odd at Hostess comes from the company's description of its chief financial officer, whom we are told:
 

is responsible for driving the planned priorities of the finance organization in both the front and back office and regularly collaborates with the marketing, sales and operations departments.
 

Resist the temptation to mock the consulting-firm-speak ("driving the planned priorities?"), and ask yourself what's missing. Don't C.F.O.'s normally work closely with the treasury departments, too?
 

Turns out that Hostess has no treasury department. It apparently doesn't have anyone who can perform treasury functions at all.
 

The company has asked the bankruptcy court for permission to hire FTI Consulting to do the work. Apparently Hostess does not have much of a finance department either, since FTI is also providing employees for that department. [The New York Times, Dealbook, 1/13/12]
 

http://mediamatters.org/mobile/research/2012/11/16/fox-ignores-hostess-array-of-troubles-to-scapeg/191440
 



This post was modified from its original form on 18 Nov, 9:41
2 years ago


Associated Press: "Hostess' Snacks Don't Neatly Fit Into The U.S. Trend Toward A Healthier Lifestyle." In a report on the second bankruptcy, the Associated Press reported that "health-conscious Americans favor yogurt and energy bars over the dessert cakes and white bread they devoured 30 years ago." AP further noted that "Hostess' snacks don't neatly fit into the U.S. trend toward a healthier lifestyle that includes a diet rich in whole wheat foods, fruits and vegetables." [Associated Press, 1/11/12, via The Huffington Post]

2 years ago


Last July, the court documents said, the compensation committee of Hostess's board approved an increase in then-chief executive Brian Driscoll's salary from to $2.55 million from around $750,000.

2 years ago


Hostess files for bankruptcy almost ten years ago, sales keep slowing due to healthier lifestyles that don't include Hostess products, CEOs don't keep up with the times by creating healthier products, the union takes pay cuts to help save their jobs, but then, near the end, the CEO's salary increases from $750,000 to $2.55 million, other executives' salaries were increased by 35% to 80%, and it's the union's fault the company went down?

What ignorant jackass actually believes the union was at fault after they already took pay and benefit cuts of over 30% with thousands already having lost their jobs, and CEOs walking away with massive pay increases?
 
Let's hear what the ignorant jackasses have to say.
 

2 years ago



hostess.jpg

2 years ago

Wow.  Great research, Christian.  

Let's also blame the national trend towards healthier eating and weight watching.  That probably affected sales.

2 years ago


Already mentioned that. That's probably one of the greatest contributing factors, and it's pretty much why Wonder Bread had to shut down a factory in California years ago.

Hostess should have introduced healthier snacks years ago. McDonald's and other fast food chains have already improved their menus, as have vending machines, grocery stores and other companies. People are more eductated about food these days then they were decades ago, and are making healthier choices.
 

Union Bashing...no run the company right
2 years ago

Thanks Christian,
Most companies do fine with Unions, and personally I feel Unions are much more responsible then CEOs, (Would you trust the CEO of BP to do the right thing after the sill in the gulf coast?)
A lot of folks on the right, Fox an excellent example have a problem with Unions because it seems Union members have good pay and benefits, to which I simply respond that is what Unions are about; they advocate for working men and women. I am a big advocate of rather than pulling the workforce down to save money, expand benefits and wages to working men and women. Unions do that I would not count on management doing it on their own.
The example above cites mismanagement as the problem the vast majority of companies do fine with Unions. The company fails and the blame is on the UNION? NO treat people with respect, make a good product at a fair price, are the basics.
How is Wonder Bread doing? They have a Union


Best Wishes,
Michael

The link is not linking sorry....
2 years ago

www.huffingtonpost.com/2012/11/16/gregory-rayburn-raise_n_2147043.html

Union Claims Hostess Executives Received Raises In Advance Of Bankruptcy (CORRECTION)

Posted: 11/16/2012 5:54 pm EST Updated: 11/17/2012 10:01 am EST

CORRECTION: An earlier version of as well as an earlier headline of this post incorrectly stated that Greg Rayburn received a 300 percent raise as CEO of Hostess as the company approached bankruptcy. Rayburn wasn't CEO of Hostess until after the company filed for bankruptcy. The post also incorrectly stated that he was paid a salary of up to $2,550,000 per year. His salary when he joined the company was $100,000 per month, according to a company spokesman.

Hostess could have ensured the Twinkie's survival simply by paying the executives less, one of the unions organizing company workers alleges.


Of course, to hear the company tell it, the maker of Wonder Bread and Twinkies simply can’t survive ongoing worker strikes at its plants. The company claims its hand was forced when it only came to an agreement with one of its two unions after several months in negotiations.


The union says there’s another way the Twinkie-maker could have avoided liquidating and laying off all of its 18,500 workers: by paying the executives less money.


Hostess’ creditors accused the company in April of manipulating executive salaries with the aim of getting around bankruptcy compensation rules, the Wall Street Journal reported at the time. In response, Rayburn announced he would cut his pay and that of other executives to $1 until Dec. 31 or whenever Hostess came out of bankruptcy.


That was after Hostess had already awarded the company's top four executives raises of between 75 and 80 percent, even though the company had already hired restructuring lawyers, according to the WSJ

.The situation isn't specific to Hostess. Over the last 30 years, CEO pay grew 127 times faster than worker pay, according to a July report.

2 years ago


I wouldn't be surprised if Hostess or some other company re-opens in a right-to-work state.
 

2 years ago

Now, I am not saying executives and management did not reap great reward.  I am just posting it here for your reference.

$100,000 a month is a nice chunk of change.   I wouldn't mind that for a yearly salary. 

I think the market for this product diminished, everyone should have accomodated that in order to keep jobs for all.  I think what bothers me the most is that a 5,000 member strong union decided the fate of 18,500-19,000 workers including teamster members.  That's alot of power.

I have been trying to find out what the average pay/benefit package was for the workers but have been unable to locate anything on that at all.  I have also been trying to find out the same information for management and that is not so readily available either.

I think it is a shame for anyone to be out of work right now.  This effects another 300 or so people here in New Jersey.  I don't need more competition in the looking for work area at all.  Nobody is really doing direct hiring, mostly temporary if full time.  Many are offering only part-time work.  Not easy.

Seems a shame something couldn't be worked out.



This post was modified from its original form on 18 Nov, 11:40
2 years ago

http://abcnews.go.com/Business/wireStory/twinkies-survive-sale-hostess-17755021#.UKoVhIaaPF8



Twinkies Likely to Survive Sale of Hostess
PHOTO: A photo of a twin pack of Hostess Twinkies.

Twinkie lovers, relax.

The tasty cream-filled golden spongecakes are likely to survive, even though their maker will be sold in bankruptcy court.


Hostess Brands Inc., baker of Wonder Bread as well as Twinkies, Ding Dongs and Ho Ho's, will be in a New York bankruptcy courtroom Monday to start the process of selling itself.



The company, weighed down by debt, management turmoil, rising labor costs and the changing tastes of America, decided on Friday that it no longer could make it through a conventional Chapter 11 bankruptcy restructuring. Instead, it's asking the court for permission to sell assets and go out of business.



But with high brand recognition and $2.5 billion in revenue per year, other companies are interested in bidding for at least pieces of Hostess. Twinkies alone have brought in $68 million in revenue so far this year, which would look good to another snack-maker.



"There's a huge amount of goodwill with the commercial brand name," said John Pottow, a University of Michigan Law School professor who specializes in bankruptcy. "It's quite conceivable that they can sell the name and recipe for Twinkies to a company that wants to make them."



Hostess has said it's received inquiries about buying parts of the company. But spokesman Lance Ignon would not comment on analysts' reports that Thomasville, Ga.-based Flowers Foods Inc. and private equity food investment firm Metropoulos & Co. are likely suitors. Metropoulos owns Pabst Brewing Co., while Flowers Foods makes Nature's Own bread, Tastykake treats and other baked goods. Messages were left for spokesmen for both companies on Sunday.



"We think there's a lot of value in the brands, and we'll certainly be trying to maximize value, both of the brands and the physical assets," Ignon said Sunday. He said it's possible some of Hostess' bakeries will never return to operation because the industry has too much bakery capacity.



Little will be decided at Monday afternoon's hearing before Bankruptcy Judge Robert Drain, Pottow said. The judge eventually will appoint a company that specializes in liquidation to sell the assets, and the sale probably will take six months to a year to complete, Pottow said.



Irving, Texas-based Hostess filed for Chapter 11 bankruptcy protection in January for the second time in less than a decade. Its predecessor company, Interstate Bakeries, sought bankruptcy protection in 2004 and changed its name to Hostess after emerging in 2009.

The company said it was saddled with costs related to its unionized workforce. The company had been contributing $100 million a year in pension costs for workers; the new contract offer would've slashed that to $25 million a year, in addition to wage cuts and a 17 percent reduction in health benefits.



Management missteps were another problem. Hostess came under fire this spring after it was revealed that nearly a dozen executives received pay hikes of up to 80 percent last year even as the company was struggling.


Then last week thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike after rejecting the company's latest contract offer. The bakers union represents about 30 percent of the company's workforce.



By that time, the company had reached a contract agreement with its largest union, the International Brotherhood of Teamsters, which this week urged the bakery union to hold a secret ballot on whether to continue striking. Although many bakery workers decided to cross picket lines this week, Hostess said it wasn't enough to keep operations at normal levels.



The company filed a motion to liquidate Friday. The shuttering means the loss of about 18,500 jobs. Hostess said employees at its 33 factories were sent home and operations suspended. Its roughly 500 bakery outlet stores will stay open for several days to sell remaining products.


News of the decision caused a run on Hostess snacks at many stores around the country, and the snacks started appearing on the Internet at inflated prices.

2 years ago

So 30%, which is probably less than that because some of those union workers didn't want to lose their jobs decided for 100% of the work force.  Does anyone else think that this union may not have represented its workers and those other workers in the company very well?


Yup, I'm an ignorant union basher. 

This is one of the things I don't like about unions and the way they operate.

2 years ago

But - when the union negotiated and got higher pay and better working conditions in the past for their workers, 100% benefitted from the actions of the 30%.  

2 years ago

What happened to the rest of my post?  

Anyway, Twinkie obviously had a great deal of money at one time to distribute among it's employees in terms of salaries and benefits.  And they did and that is commendable. You never hear about Twinkies anymore.   I don't know anyone who eats them now.  The nostaligia over the fact that they won't be around in the future is driving sales now.  

What I am curious about is why there is a separate employees union for bakers at the Twinkie company.  Perhaps if other employees were on board in that union, the union would have negotiated a little more carefully so that everyone could have kept their jobs.

But the fact remains - people just don't eat Twinkies anymore like they used to.

2 years ago

Angelica, I would imagine each union negotiated their own terms when it came to salary and benefits.  So the Bakers Union more than likely took care of their members not others in regard to their pay and benefits.  Unfortunately, their decision not to negotiate did have drastic results for the 100% though.  


There are different unions for different job descriptions.  The Teamsters more than likely were the trucking end of it.  I would imagine the Bakers Union doesn't want to deal with that end and that end doesn't want to deal with the Bakers.  They are different.  That's the way it works.  Even in school systems not all are in say the NJEA.  There are other workers under different unions.  You also have private employees working among them as well.


I am surprised you weren't aware of that.  It gets muddled working with so many different unions and contracts.  That's business though.

I haven't eaten twinkies in at least 30 years.  They were one of my favorite crap foods though. 



This post was modified from its original form on 19 Nov, 5:51
2 years ago

Every once in awhile, that amchine at work would end up with my coins in it and the Twinkie button would get pushed.  Once they came out of the machine, what could I do?

2 years ago

HWat's worse is that the CEOs will network with their buddies and end up in jobs where they will be apid even more and will ruin yet another commpany.  The workers will have the hard time.

2 years ago


Suzanne, the workers already made concessions and took pay and benefit cuts. I suppose they could have taken more cuts, but then when you look at how the top brass drastically increased their pay and benefits AFTER workers' pay and benefits were cut, and AFTER the company started struggling just to stay afloat, all sympathy for the top brass quickly disappears. At the very least, it is difficult to lay blame at the workers' feet in that situation. If the top brass had cut their salaries and benefits first, as well as cutting costs, but the unions refused to take cuts, then maybe some blame could be placed on the unions, but that's not how it happened at all.

It's just like how it was difficult to feel sorry for all the banks and other financial companies who took Bush's $700 billion bailout money and then awarded themselves a huge portion of that money in bonuses instead of putting that money where it should have gone.
 

2 years ago

I am not saying the executives didn't pay themselves well at all.  If you read the above article though since April of this year, they have been earning $1 per year as salary.  I am sure once the bankruptcy proceedings were finalized they would have definitely grabbed at their salaries again though.

Do you have any idea what the salaries and benefit packages accrued to for each employee?  I have no idea what they were making, what they gave back, and what this new request would have meant to them in dollars and cents.  I really would like to have that information because it plays a big part in the whole picture.

What I do know is that a Union that represented 30% of the workforce made a decision that they would not negotiate any longer and the results are 100% of the workforce is now out of work with no healthcare or any benefits or paychecks.

These are really tough times.  Is it better to have nothing or a little less of something?

Unfortunately, 70% of the workforce had no say in any of it.

2 years ago


They already took a huge pay and benefit cut years before. I get your point, and I know you always side with CEOs, but honestly. 
 

2 years ago


Did I already mention that the fact that CEOs gave themselves hefty salary increases before asking workers to take pay and benefit cuts completely negates fault or blame on the unions?
 

2 years ago

And I wonder how much the executives will get when the company sells?

2 years ago

I get that years before they took a big paycut.  Private sector has been taking pay and benefits cuts for years and years themselves.  It sucks.  Sometimes if you want to have a job this needs to take place unfortunately.



I also would like some evidence of me always supporting CEO's.  That's funny because generally I am not a big fan of corporations, due to the uneveness of the payscale of executive to employee.  I really am an advocate for small business who suffers being lumped in with corporations. 



You also mentioned above briefly about the bank bailouts.  I never supported that under Bush or under Obama.  Fuk them is how I felt.  If you recall my story with Bank of America and my divorce from them.  It should show evidence I do not appreciate their tactics.  I recently divorced myself from Wells Fargo for similar nickel and dime tactics they choose to perpetrate on their clients.  No, I am not a fan.


What I am saying is many of those offenders of high salaries walked back in the spring.  The new guy although his salary is extremely large is not taking it and neither are the other executives.  They were taking one dollar for the year as salary until the bankruptcy went through and the company was solvent again.


It seems to me that management finally showed some sacrifice and effort. This union that represents 30% of the workforce decided to not negotiate because of the past which wasn't involving the new players in management and decided that 100% of the workers do not need a job.


Maybe you don't have a problem with some messing it up for all. 

So yeah, I blame management, market place and that particular union for this final blow.

Management was wrong, the bakers union was wrong.  Now noone has work.



This post was modified from its original form on 19 Nov, 8:24
2 years ago

You know some in the Bakers Union did cross the picket line.  The Teamsters asked the Bakers Union to hold a secret ballot amongst their membership to see what the numbers were in support of negotiating or not.  They didn't do it.  Some in their membership wanted to keep their jobs even if for less.

Union management is as bad as Corporate management many times.

2 years ago

(I did see that you (Suzanne)  wrote about the $1 salary.  I do appalud them for that).

2 years ago

I didn't write it Nancy, it's in the article and the links within the article.

Honestly, I just think it is a shame for 19,000 people to be without work.

2 years ago


Yeah, $1 in salary, millions in stock options and bonuses. Are you not paying attention?
 

2 years ago

Sounds like they were going to be out of work anyway. The company was going bankrupt ... again.
 

2 years ago

I didn't read anything about the millions in stock options and bonuses.  Can you show me where it says that.  I don't really doubt it, but I didn't see it either.


As far as they were going to be out of work anyway, maybe, maybe not.  They were trying to restructure, which probably would have involved some losing jobs but not all.  Now they are just closing up completely.

2 years ago


You actually think they walk away with one, single dollar? Do you not know how that works? I can make myself a corporation and pay myself $1 a year to avoid personal taxes. All other profits go to my "corporation" (which is really just me), and if the "corporation" fails, only the "corporation" is responsible for any debt, leaving me, personally, in the clear, because I only made $1 for the whole year, and the "corporation" doesn't exist anymore to pay the debts.

CEOs do that shite all the time. They get paid $1, and then take home millions in stocks and bonuses which are not subject to the same taxes as personal income.

If you think the Hostess CEOs are literally being paid a single dollar and nothing else, you're living in a fantasy world.



 

2 years ago

Christian, do you have proof through this bankruptcy that that is indeed what was taking place.  I don't live in a fantasy world by any means and I don't really doubt it as I said above.  Do you know this as a fact for this situation as it is occurring now?



I haven't personally seen information on that.  I also cannot find relative salaries for management or employees for that matter.

I still think it is pretty %#&!*% that 70% had no say in keeping their jobs or not.



This post was modified from its original form on 19 Nov, 8:50
2 years ago


I think you're missing the point entirely, Suzanne (as usual). If the unions keep taking pay cut after pay cut, then all other companies all over North America will pull the same scam. If you repeatedly bargain yourself down, it will eventually have a ripple effect through all industry. Bargaining yourself down one or two times, temporarily, in good faith, during a legitimate crisis is one thing, but selling yourself out completely on a permanent basis is another. Sometimes, you just have to give up entirely and start again somewhere else.

The Hostess situation looked like it was going nowhere. I doubt they would have risen back up to a level in which they could have gone back to paying normal wages and benefits. The world is changing, and sometimes, tough choices need to be made by both sides.

Snack foods is not the only industry that's suffering. Look at record companies,photographers, journalists, newspapers, etc. There's little money to be made in the old models of those businesses. Change is happening and people have to adjust. 
 

2 years ago

walmart-michael-duke.jpg

2 years ago

"I didn't write it Nancy, it's in the article and the links within the article."

Didn't mean to imply that you had authored it or made it up.  I do realize it was from a cerdible source.  I had read it elsewhere myself.

2 years ago


Then there are the misguided whiners who complain about the plight of people losing their jobs when a missile factory is shut down in some rinky-dink town in the south. 

"But the whole town is dependent on that factory for jobs! You can't shut down the missile factory!"

But you make fukking missiles. Create some other industry in that town, then. One that doesn't destroy the world. Grow and process hemp or something. Whatever.

Trying to hang on to outmoded industry just to save jobs is stupid and short-sighted, and costs people more in the long run.  
 

2 years ago

"Yeah, $1 in salary, millions in stock options and bonuses. Are you not paying attention?"

Chrisitan, it is a privately owned company.  That doesn't mean there isn't some type of stock but if so, it is privately held stock and not offered on the ,market.

of course stock options don't mean much if the stock is worht $0.

2 years ago

Christian, I am talking to you in a repesctful way.  You never seem to be able to do the same (as usual). 

I understand that you can not bargain away your future over and over.  Quite often that is not the case when it comes to negotiations with the unions however.  Many times when things were better the unions got themselves some sweet deals and I find that now in these harder days, they do not want to give an inch.  Of course, I am referring to something else with that thought.  I just find that unions can be as greedy as any corporation.

Still it does bother me that a decision was made based on management and 30% of the workforce.  There is no fairness in that at all.

I also understand the need to move along with the times.  There is always a portion that loses out in that scenario as well.

2 years ago

Okay a lot of posts came while writing my last one.

Are we going to discuss Hostess and all other corporations as the same now.  They are all slighlty different beasts and to bring Walmart into this just doesn't seem like a good fit to me.

I have to run for a bit.  I'll be back though.

Try reading this, Suzanne:
2 years ago

" ...
 

When I received my first paycheck from then Interstate Bakeries in 1999 it had a memo stapled to it. The memo announced that Wonder had just had the most productive quarter in baking history. It stated that the health of the company and brand had never been better. The break room was buzzing with excitement because our contract was soon to be up for renegotiation and this would surely mean smooth sailing. A few weeks later we got the 'oops' letter. Turns out it was all an 'accounting' error and the company was failing miserably.
 

Conveniently though, CEO Charles Sullivan and the board managed to sell their stock before word got out about the bad news. No jail time of course. In fact, Sullivan was brought back as a consultant after his resignation. Enron happened a few years later and at the bakery we were amazed how much attention they got compared to us.
 

The company of course used it's 'oops' letter to justify asking for concessions from the Union. We gave nothing and gained nothing that year after a 45 minute strike. The status quo continued and I proudly joined the middle class for the first time in my life. I made $14 an hour and had insurance. I even went on vacations for the first time. I had great pride in my job, and the products. We bought a new car for the first and only time in my life. In 2003 I transferred to the Lenexa, KS bakery.
 

In 2005 it was another contract year and this time there was no way out of concessions. The Union negotiated a deal that would save the company $150 million a year in labor. It was a tough internal battle to get people to vote for it. We turned it down twice. Finally the Union told us it was in our best interest and something had to give. So many of us, including myself, changed our votes and took the offer. Remember that next time you see CEO Rayburn on tv stating that we haven't sacrificed for this company. The company then emerged from bankruptcy. In 2005 before concessions I made $48,000, last year I made $34,000. My pay changed dramatically but at least I was still contributing to my self-funded pension.
 

In July of 2011 we received a letter from the company. It said that the $3+ per hour that we as a Union contribute to the pension was going to be 'borrowed' by the company until they could be profitable again. Then they would pay it all back. The Union was notified of this the same time and method as the individual members. No contact from the company to the Union on a national level.
 

This money will never be paid back. The company filed for bankruptcy and the judge ruled that the $3+ per hour was a debt the company couldn't repay. The Union continued to work despite this theft of our self-funded pension contributions for over a year. I consider this money stolen. No other word in the English language describes what they have done to this money.
 

After securing our hourly cash from the bankruptcy judge they set out on getting approval to force a new contract on us. They had already refused to negotiate outside of court. They received approval from the judge to impose the contract then turned it over to the Union for a vote. You read that right, they got it approved by the judge before ever showing to the Union.
 

What was this last/best/final offer? You'd never know by watching the main stream media tell the story. So here you go...

1) 8% hourly pay cut in year 1 with additional cuts totaling 27% over 5 years. Currently, I make $16.12 an hour at TOP rate of pay in the bakery. I would drop to $11.26 in 5 years.

2) They get to keep our $3+ an hour forever.

3) Doubling of weekly insurance premium.

4) Lowering of overall quality of insurance plan.

5) TOTAL withdrawal from ALL pensions. If you don't have it now then you never will.
 

Remember how I said I made $48,000 in 2005 and $34,000 last year? I would make $25,000 in 5 years if I took their offer.

It will be hard to replace the job I had, but it will be easy to replace the job they were trying to give me.

That $3+ per hour they steal totaled $50 million last year that they never paid us. They sold $2.5 BILLION in product last year. If they can't make this profitable without stealing my money then good riddance.
 

I keep hearing how this strike forced them to liquidate. How we should just take it and be glad to have a job. What an unpatriotic view point. The reason these jobs provided me with a middle class opportunity is because people like my father in law and his father fought for my Union rights. I received that pay and those benefits because previous Union members fought for them. I won't sell them, or my coworkers, out.
 

We may have forced the companies hand but they were going to smack us with it anyway."
 

Full article:
 

http://www.dailykos.com/story/2012/11/18/1162786/-Inside-the-Hostess-Bankery
 



This post was modified from its original form on 19 Nov, 10:08
2 years ago


Still think it was the unions?
 

2 years ago

Great article Christian. 

2 years ago

Well seeing it through the eyes of this person.  I can understand why they acted as they did.  The deal was crazy bad.

The problem is many years of mismanagement has led them to a point of no return.  I do have to say back in 1999 that salary, with healthcare and benefits was not to shabby.  Now they have nothing to offer their employees because now they have more, much more, debt than equity.

It is a shame that 19,000 people are losing their jobs.  I wonder what the deal was that was offered to the Teamsters since they were willing to play. 

I read an article where the Bakers Union made a counter-offer to management to outsource the labor that the Teamsters provide and keep the Bakers Union employess intact as is.   It seems they were willing to throw the Teamsters under the bus, so to speak. 

I don't think anything good has come of this at all.

Just a little reminder Christian, I never said it was just the unions.  What bothered me most was that 30% of the workforce essentially made the decision for all.

2 years ago


You mean like in the 2000 US presidential election when the wishes of the minoriity were honoured over the wishes of the majority resulting in the installation by the Supreme Court of your hero and mentor George Bush?


<<Just a little reminder Christian, I never said it was just the unions.>> 

orlyhohoho rly.jpg


Didn't you say "Another 18,000 out of work. Yeah, Unions!" in another group?

Gimme a break.
 

2 years ago

Well, yes I did say that because ultimately that 30% was willing to throw the other 70% under the bus to outsourcing their labor to save their own ass.  When that didn't work ultimately there decision caused all to lose their jobs no matter how it boils down.

I have also said mismanagement in the past, plus market played a part.


And no it has nothing in common with that election.  That just goes to show the level of stupidity you operate at sometimes.  Will you ever grow up?

Gimme a break, I don't know why I even bother trying to talk respectfully to such a prick.

2 years ago

It's interesting how you always uncontrollably about how much you are being squeezed unfairly by taxes, the gub'mint, etc. but when bakers at a corporation get dealt a similar raw deal, you pull out your judge robes.
 

2 years ago

I really fail to see the comparison you are trying to present.  One has nothing to do with the other.

All along I have been saying I'd like to see what the numbers were, that it plays into the whole scenario greatly.   My judge robes said it was a bad deal, if you read above.

The only problem is this corporation is not able to print more money to make a better deal at this time apparently.  The Executives are foregoing their pay at this point and there is still not enough money to give a better deal.  So they didn't accept what was offered the 30%.  Honestly I don't blame them, it was a bad contract.

Unfortunately the entire workforce fell under their decision and now noone has a job.  Whether it be good or bad, noone has work now.

2 years ago

"Just a little reminder Christian, I never said it was just the unions.  What bothered me most was that 30% of the workforce essentially made the decision for all."

Yeah, maybe it was the union who made the decision.  But it was managment, who had been mismanaging for at least 8 years, that put them in that position.  and that is also unofrtunate.

2 years ago

I don't disagree with management holding fault as well. I haven't said differently.

2 years ago

UPDATE:

The judge ruled that they must mediate again for a resolution.  Hostess will not close - at least, not immediately.

http://www.delawareonline.com/viewart/20121120/BUSINESS11/311200020/Judge-rules-mediation?odyssey=mod|newswell|text|Home|s

2 years ago

teabagger-twinkie.jpg

2 years ago

Change it to the teamsters and the Baker's union, and I will LOL.

UNIONS
2 years ago

Seems the CEO's and upper management get a contract with their employer but the workers aren't supposed to need or want one.
If you have been in a grocery-superstore lately....it has a complete aisle of bakery products so if a company isn't producing the kind of product the consumer wants...then it will fail....and what happened to Hostess. Plus, the store itself has a bakery.
This is free-market competition.

2 years ago

I read an article in the Huff Post about this.  Just leaves you shaking your head.  It's all wrong and questions if there is such a thing as having a conscience any more.

19,000 out of work.

2 years ago

OOps, didn't see it here.

Deal has been approved andI posted an article about it.

2 years ago


But Suzanne, you support all that. What exactly is your beef with the bonuses?
 

2 years ago

Christian, stop trying to speak for me. It is so boring and presumptious and generally wrong.


I don't think bonuses while crippling a company are the answer either.  I don't think failure deserves reward.


I also think there are many aspects to the demise of this corporation.  It is a combination of factors, much based on greed of different forces.  To me, I see many sides and not just one.


Continue to feel free to think you know what I think and that you can speak for me.  It's so predictable.

2 years ago


Blah blah blah.   You have zero credibility, Suzanne, because you always talk out of both sides of your mouth. First it's the unions, then it might be management. It's standard operating procedure for you. Whatever.
 

Nice try.

waffles.jpg 
 



This post was modified from its original form on 01 Dec, 18:35
2 years ago

Christian, you only find fault with one side and stick with that.  The truth is there are many causes to many things.   The Unions are not harmless and neither is management in this particular situation. 

You should look at an entire picture before speaking of others crediiblity.  Which in all honesty your opinion of mine means very little.


At least I don't talk out of my ass.



This post was modified from its original form on 02 Dec, 4:04
2 years ago

The thing that stands out, to me is that the employees had good suggestions for many years about ways to update the production of Hostess products.  The executives didn't take any of their suggestions for modernization, and basically, production hadn't changed in 65 years.  

Why would this kind of managerial incompetence be worth rewarding?  

I think it's time for us to forget the myth about upper management and CEOs being seen as "job creators" worthy of unlimited perks at the expense of workers.  Managerial incompetence, greed, and a contempt for workers are what drove Hostess into the ground.  It's becoming an old and familiar story. 

2 years ago


That's a far more accurate description of what happened.
 

2 years ago

I have heard of so many companies that are working owned and managed.  I have heard of co-operatives that are pretty much the same.

So here we have it-  managers that have mis-managed a company into bankruptcy and are being rewarded for it.

Workers that have made suggestions to improve the company and its productions, have been fired/laid off and lots their jobs and pensions.

And some Republicans (notice I say some) that think the workes have no skin in the game, that these CEOs should be rewarded for the risks they take (which is true in a small business), and that the workers aren't able to manage and thus don't deserve ti make much more than minimum wage.

This is the kind of thinking that will doom us as a nation.  YOu can't build an economy by continually lowering the bottom and sending the middle down so low that nobody can BUY anymore.

2 years ago

Very, very true, Nancy.  You would think that management could see that for themselves.  Maybe arrogance or entitlement gets in the way of vision.  Those workers should have been compensated.  

2 years ago

A lot of people are complicit in this with out even knowing. It is about stock prices and investments. How many people have a 401k? How many people invest savings? What do you think drives this practice..?

2 years ago


Nobody is forced to mismanage companies or collect massive bonuses for substandard peformance.
 

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