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Union Kills the Twinkie

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MOAR FEDERAL BAIL OUT NEEDED
 
MOAR FEDERAL BAIL OUT NEEDED

Some of the bailout was necessary, a company the size of hostess with little impact on the economy as a whole needs to be let go. I know this was a joke, but most people arent educated enough to understand why many of the bailouts have been needed, especially AIG which had the potential to crumble our entire economy.
 
If i never hear the term Corporate Greed again it would not be soon enough. Since when did the "American" dream become "corporate greed?"

I am not saying it is the union's fault, I am not saying its not. I am just saying just because they make allot of money doesnt make them Greedy. I would better most of the people quitting their job's so they could occupy wall street had either iphones or ipods in their pocket and Steve Jobs was one of the greediest of them all.

Hypocrisy at its finest.

But if they made a lot of money, would they have filed for bankruptcy? Twice? I keep going back to the fact this company was selling a crappy, outdated product. People eat healthier these days. This is simple high school economics because the demand has changed since the 1980s.
 
No, we're talking about Hostess.

That presupposes Tornicade lied to us.

You didn't make up statistics, did you, T-cade? DID YOU?
 
Keys will defend the union at all costs..
 
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No, we're talking about Hostess.

That presupposes Tornicade lied to us.

You didn't make up statistics, did you, T-cade? DID YOU?

Then about a year ago Hostess quit making their contractual contributions to the worker's pension plans and filed yet another bankruptcy reorganization. And just before pleading poverty before the bankruptcy court, Hostess executives tripled their salaries.
Hostess then had the gall to ask the court to tear up the union contracts, but the unions fought back, the Teamsters taking the lead and negotiating a less severe concession contract that was narrowly approved by the Teamster Hostess employees.

http://www.dailykos.com/story/2012/11/09/1159864/-Hostess-Bakers-Strike#

http://www.teamster.org/content/dow...ng-hostess-amid-talk-‘shared-sacrifice’-execs

Hostess's then-CEO, Brian Driscoll, saw his salary rise to $2.55 million from $750,000--a 300% increase.
"Other executives' salaries were increased by from 35% to 80%," the creditors said.
While Driscoll--who abruptly abandoned his post at Hostess's helm last month, leaving a restructuring expert to take his place--ultimately refused a portion of the salary bump, others seem to have kept the funds, the creditors said. They noted that the company continues to pay the prebankruptcy salary increases, no piece of which was "made contingent upon any aspect of the debtors' business performance or operations."
Hostess's own compensation consultant noted "that the increased salaries were not incentive compensation at all," the creditors said, and urged the company to tie the payments to company performance and wrap them into an incentive plan once Hostess filed for bankruptcy. But Hostess "disregarded" the suggestion, the creditors said, and also failed to disclose that it had tweaked the executives' pay in the six months leading up to the bankruptcy. The creditors only learned of the changes during a February deposition of the human resources executive.

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


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.
[...]
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]


THE GUYS ARE CROOKS AND WILL PROBABLY END UP GOING TO JAIL FOR BANKRUPTCY FRAUD !!!!
 
How did you go bankrupt?” Bill asked. “Two ways,” Mike said. “Gradually and then suddenly.” - The Sun Also Rises

Hostess went CH 11 bankrupt gradually due to business decisions, union contracts and liabilities and change in customer behavior. They went CH 7 bankrupt suddenly due to the union strike.

Quoting Daily KOS for unbiased editorials?

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]

So the company wanted to cut some excess bakeries (with a possibility of a third of the 36 closed or sold), the Baker's union said no and struck, and now all will be closed or sold.

For all the times I have heard union people tell management how to run their business, I find it ironic the only way they can run their business (their unions) is by forced membership and dues.

Corporate compensation is often raised for companies going through a bankruptcy or merger, either in actual salary or stock options after coming out of bankruptcy protection so executives won't dash to other companies. It is a lot harder to bring in people new to a situation in bankruptcy (which you would still have to pay a higher salary to the new guys due to the situation) and steer it to reorganization than to increase salaries for current management. There is still high attrition rate during bankruptcies or mergers. With the company being privately owned, actual salary is the normal choice. I'm not judging if it is right or wrong, but that is pretty standard.

Highlighting that debs and liabilities is greater than assets is why companies file for bunkruptcy protection to either reorganize or close shop.

Were Hostess' labor and benefit costs higher than industry average? I haven't heard the Teamsters say that their contract was 20% less than competitors. http://www.glassdoor.com/Salary/Hostess-Brands-Salaries-E329177.htm If the average income/benefits was $50,000/year, 8% savings in year one would be $72 million for 18,000 employees, quite a difference than a couple of million increase in executive compensation.
 
How did you go bankrupt?” Bill asked. “Two ways,” Mike said. “Gradually and then suddenly.” - The Sun Also Rises

Hostess went CH 11 bankrupt gradually due to business decisions, union contracts and liabilities and change in customer behavior. They went CH 7 bankrupt suddenly due to the union strike.

Corporate compensation is often raised for companies going through bankruptcy, either in actual salary or stock options after coming out of bankruptcy protection so executives won't dash to other companies. It is a lot harder to bring in people new to a situation in bankruptcy (which you would still have to pay a higher salary to the new guys due to the situation) and steer it to reorganization than to increase salaries for current management. With the company being privately owned, actual salary is the normal choice.

have you seen their monthly reports

its all right there.
http://www.hostesscommittee.com/index.php
The company turned downed more money to take less from the hedge funds. They hiked their executive salaries to defraud the the bankruptcy court and collect their bonuses.

they left money on the table with an 8 percent labor cut when the unions would of gave in more for the same deal that they gave the hedge funds.

the bakery portion accounted for 17 percent of their revenue and 25% of their employees. you do the math those people in the afl union would of lost their jobs in the next two years regardless.

2.5 billion net revenue in a down year and they couldnt get their house in order for 15 years. what happened to the 800 million they came out of their last bankruptcy in that didnt go to address any of their debt.

Richwood got into a business they didnt understand. so they took a clear course to milk out what they could.
 
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The unions were also getting 25% equity stake in the company and 2 seats on the board of directors.

So the company didn't want to take on extra debt to get out of debt? I wish the federal government knew that philosophy. $2.5b net income? I think you meant gross income. Their total liabilities were barely $1b. Many industries run on +/-2% margins, and higher fuel and raw ingredient costs would hurt a baking business quicker than other industries.

How could all the bakers lose their jobs if the company's main revenue source are BAKED products?
 
My father in law worked for wonder bread / hostess for 15 years. He is a certified mechanic abd he worked on all of their semi trucks and so forth. Also had his cdl license. He was a member of the teamsters union and did cote for the paycut. He said that a pay cutis better than no job at all.

Pretty shitty how 5000 bakers went on strike and ruined it for everybody. It's also really shitty they did this the week of thanksgiving.
 
I'm curious why you think me saying you're going to defend the unions at all costs is a personal attack? Are you ashamed of defending the unions? It seems like you should/would take it as an attack against you if you aren't proud to defend them.

When I read your post I thought it came off as an insult. I can see why keys said that to you.
 
If that's true, that has to be the dumbest thing I've seen in quite a while.

I work for Nestle and came from the Edy's division. We just integrated with the Digiorno guys. This would be the equivalent of us still sending separate trucks to all the stores.

There's absolutely no point wasting all that $ when there's no need to.

That's what unions do. They negotiate the dumbest damn things, they guarantee an adverserial relationship between union guy and management, the union has very little interest in the well being of the company.

Before LTV folded, their machinists were guaranteed 64 hours a week. 20 hours were at time and a half....4 were at 2x. These guys were making over 100K a year. Here's the kicker, they were only working 40 hours a week....but guaranteed the 64!!!
It gets worse. The union negotiated that the laborers couldn't multi-task. A machinist couldn't operate more than one machine....the floor sweeper could only sweep floors.
It was despicable. A machinist on a big 20 foot roll lathe would show up at work. He'd start the machine which would take hours to make a pass down these massive steel rolls. While the machine was working its way down the roll for several hours the machinist would do nothing until the machine finished making a pass. Then he'd make an adjustment which took 5 minutes and the machine would start it's next pass. Some of the operators had recliners and lamps next to their machines....it was insane. Literally, a guy could be there 8 hours and do less than 10 minutes of work....and get paid for being there 12+ hours...and making over 100K!!! The unions held American Steel companies hostage and raped them at the same time. The unions are the reason so many of the greatest steel companies in the world have shut their doors in America. The unions are the reason that so many Northern Ohio manufacturers fled Ohio for Right to Work states or China.

I sold LTV $2M of equipment before it closed. My machines were making parts in 45mins that were taking 16 hours to make on pre-war archaic equipment. The union was throwing a fit through the entire process. They claimed my equipment was too fast and dangerous, they did everything they could to kill the project. LTV was sending out tens of millions worth of work because they couldn't do it in-house. I sat in meetings and listened to management explain over and over to union reps how beneficial it was to bring that work back into LTV and that they couldnt compete othewise....the union would hear none of it. In the end I got the order, the union workers were furious. A month in I got a call that my machines weren't doing what i had promised. I sat in a meeting and was told that my machines were underproducing by a significant amount. I told them that was impossible. My machines were computer controlled, whatever my estimates were to make the parts are always within 5% of the actual production rate. We walked out to the machines. In 5 seconds I knew there was a problem...the machines were all crawling slow. On the machines there is a dial that allows you to slow the machines down for setup purposes. All the machines were turned down to 10%. I turned them all back to 100%, problem solved. The operators started bitching that the machines were too fast, that they were afraid to operate them, that they were dangerous and that they couldn't keep up. Keep in mind, they only had to work every 45 minutes unloading a finished part and loading a new peice of material...the rest of the time the operator sat and did nothing. Anyhow, the union wanted me to supply an engineer for 30 days to get the operators "comfortable" with the machines. I said sure even though I had no clue how my guy was supposed to get these clowns more "comfortable" than they already were. My guy did literally nothing for those 30 days down there. The machines ran themselves, made more money for LTV, made the operator do an hour of work per shift instead of 10 minutes of work on the older equipment. It was a win-win...the union didn't care and did everything they could to sabatoge the project. The union clowns also keyed my engineer's car...awesome.

In the end the union killed the golden goose. Same thing will eventually happen to the automotive industry. The best thing that could ever happen to Ohio would be if they became a right to work state and ended forced unionization.
 
But if they made a lot of money, would they have filed for bankruptcy? Twice? I keep going back to the fact this company was selling a crappy, outdated product. People eat healthier these days. This is simple high school economics because the demand has changed since the 1980s.

Pure hot garbage!!! People eat healthier??? Are you fricking kidding me? Our obesity rate has never been higher!

Hostess's biggest rival, Little Debbie, makes the same unhealthy crappy products...they've been profitable every year since 1960!! They are non-union. The crappy outdated union leaders are the reason 18,500 people from Hostess don't have jobs today. Simple economics is that the non-union company will be in better financial shape than the company being held hostage by a union every time.

Hostess made Twinkies...Little Debbie makes these -
Little%2BDebbie%2BCloud%2BCakes-706566.jpg


Hostess made Ho-Ho's...Little Debbie makes these -
4344984.gif



Little Debbie has been profitable every single year since 1960.
Hostess just closed it's doors.
 

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