Have no fear, the Twinkie will survive
Even though Hostess is going into bankruptcy, a line of suitors is interested in grabbing some of its brands. And the Twinkie is one of the hottest ones.
The phones at Hostess are ringing off the hook as companies line up to pursue the 30 brands that are for sale, now that the final mediation session between the company and its striking employees has failed.
Hostess has received "a flood of inquiries" from interested buyers, attorney Heather Lennox told a bankruptcy judge in court this week, according to The Wall Street Journal.
Unfortunately, all 18,500 workers will lose their jobs at a company that should have been managed better. Hostess has been in bankruptcy before, and emerged a few years ago loaded up with debt from its private equity backers. The company was so underwater, in fact, that it couldn't buy new equipment, The New York Times reports. Hostess had more than $860 million in debt earlier this year.
Hostess is unfairly pushing all the blame for its troubles on the unions. Still, the unions do bear some responsibility here. High labor costs doomed the company; employees had formed into 12 different unions by the time the end came.
At any rate, Hostess is keeping a "skeleton staff" of 3,200 people, The Journal reports. It's trying to find buyers for 30 brands and 36 factories, and from the way the suitors are lining up, it sounds like Hostess won't have a problem with some of those brands.
"We therefore think there could be very healthy competition," Lennox told the court. Hostess may start auctioning some of its assets soon.
Hostess also plans to award bonuses to the officers and managers that helped run the company into the ground. The company is seeking $1.75 million to distribute to 19 executives for a job well done.
Some potential buyers include international companies eager for a piece of the U.S. bakery business as well as big pastry names already familiar to Americans. Flowers Foods (FLO), which makes Nature's Own bread, has been mentioned as a buyer along with Groupo Bimbo, a Mexican company that also owns the Entenmann's pastry line.
So whoever made the single bid for a $5,000 Twinkie sold on eBay, you may have a great story to tell but you probably won't have one of the last Twinkies ever made. They'll be back.
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"Hostess is unfairly pushing all the blame for its troubles on the unions."
The snack giant endured $52 million in workers' comp claims in 2011, according to its bankruptcy filing this January. Hostess's 372 collective-bargaining agreements required the company to maintain 80 different health and benefit plans, 40 pension plans and mandated a $31 million increase in wages and health care and other benefits for 2012.
Union work rules usually required cake and bread products to be delivered to a single retail location using two separate trucks. Drivers weren't allowed to load their own vehicles, and the workers who loaded bread weren't allowed to load cake. On most delivery routes, another "pull up" employee moved products from back rooms to shelves.
Unfair to blame the unions indeed.
Unions brought you the weekend and 8 hour workdays. I'll bet you'd squeal like a pig if employers took those (and lots of other workers' rights) away.
Yeah, buddy: I yearn for the days of sweatshops and fire trap factories that worked children and women to death in the U.S.A.
"Those who cannot remember the past are doomed to repeat it" - Santayana
The workers already took a 8% cut in pay and pensions were frozen. Then they were asked to take another 8% after that with the upper management getting bonuses/raises. Now if your boss asked you to take a 16% pay cut and he got a raise....what would you do????
Then Hostess still has the nerve to try and give $1.75 million to the people who mismanaged it in the first place.
The employees should be commended for having the backbone to stand up to a big corporation and say enough is enough.
"Whoever it was that said..." Really aren't too observant are you DeeDee...So who's the MORON ??
I'm quite glad I never worked around you...But I do remember some similiar..They were crybabies.
And always the ones abusing the Company and the Union the most...Yeah I remember..
We wanted to fire you, and the Union wanted rid of you....You threatend everyone.
Even talked about going to the NLRB..
Do you have any idea what caused the last Depression or Our deep Recession...?
Yup, didn't think so.........
Whoever it was that said the union was a main reason Hostess is going out of business is so right. Americans in general want to make outrageous wages and still to be able to buy whatever they need at rock bottom prices. IT DOESN'T WORK LIKE THAT YOU UNION MORONS. I worked at a few companies that were held captive by unions. Union people act like the f*cking world revolves around them. Believe me unions will be the main cause of the next depression, and it's coming people.
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