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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How the Hostess company is being divided up
You may have heard that Hostess Bakery plants shut down due to a workers' strike. But you may not have heard how It was split up.
The State Department hired all the Twinkies, the Secret Service hired all the HoHos, the generals are sleeping with the Cupcakes and the voters sent all the Ding Dongs to Congress.
Sure get a kick out....Unions this,unions that....blah,blah..
Ripplewood H. will lose $150 million, they injected,,,,,,Think you might be pretty naive?
What do you think Hostess as a total entity might be worth ??
Don't really think Ripple and/or other Bond and Loan holders are going to get hurt..?
This has been a long term plan of Vulture Capitalist to seize Competition and proprietary Brands and Information...Then shidt can the deal, walking away with 100s of millions in liquidation of assets.
And no obligations to the workers that kept the Company running,while taking one concession after another to keep their jobs over the last few years...Wait till they buy out your Company next.
> Unfortunately, all 18,500 workers will lose their jobs at a company that
> should have been managed better.
> Hostess is unfairly pushing all the blame for its troubles on the unions.
From what ONE source are you getting your information? Have you followed the work ethics and union worker tactics for years gathering data?
Nice fair & balanced reporting.....
Things you won't hear from they state controlled media:
The unions killed Hostess and every other industry they touch.
Ripplewood Holdings injected a total $150 million as Hostess sank deeper into trouble. It lost every dollar
Hostess paid out almost $100 million in health benefits for retirees last year, but over half of it covered workers who never had worked at Hostess. The Teamsters’ onerous and antiquated “multi-employer pension plan” foists the pension obligations of a bankrupt company on to the balance sheets of surviving rivals—ensuring a steady death spiral in any declining industry.
Union rules forced Hostess to run separate truck fleets for delivering bread vs. sweets. A sweets driver, serving a 7-11 store, was forbidden from restocking shelves with breads already delivered and waiting in the back—he had to call for a bread driver to swing by and handle.
The union restrictions on the 5,500 distribution routes at Hostess made it unprofitable to serve tiny outlets, yet Hostess was barred from using smaller, sleeker—and non-union—distributors.
Rayburn rescinded the raises making the brass work for a dollar a year apiece
I cannot help but feel that the families of the 112 people who died in that foreign clothing factory wish that they had a union looking after their worker safety. I haven't actually read the article, only the headline, but my imagination tells me that there were hundreds of people packed into a sweatshop with insufficient ventilation and not enough exits and fire fighting equipment.
Unions do have a useful purpose and it is a shame that they are no better sometimes than the management they oppose in that they become greedy and corrupt just as easily. The result is that everybody suffers when that happens and businesses like Hostess wind up closing. Too bad.
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The company plans to close stores and lay off employees, and says it needs to make some deeper changes.
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