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.

By Kim Peterson Nov 23, 2012 3:36PM
Cheer up, Twinkies fans. The famous yellow snack could probably survive a nuclear attack, so making it through bankruptcy court is a cakewalk.

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.Credit: Philip A. Dwyer/Bellingham Herald/MCT via Getty Images
Caption: Andy Wagar loads Twinkies, Ho-Hos and cupcakes into a van outside the Wonder Bakery Thrift Shop in Bellingham, Washington, on Friday, November 16, 2012

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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279Comments
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Other bakeries make Twinkie clones.  I was in Safeway today and there are several variations on twinkies; lemon cream and more.

Nov 24, 2012 12:32AM
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i said it before unions are good and bad....get rid of the unions and companies go back to barely paying the employees ....and paying the board of directors and ceo to much ..well the board and ceo will always get overpaid and everyone else will get blamed for shutting it down
Nov 23, 2012 11:49PM
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I am desperate, I am looking for my twinkie fix.
Nov 23, 2012 11:43PM
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Greed has taken over a lot of things in the country! The opposite of greed is giving! If  one hundred million people would give ten dollars each week or each month to help the people who are struggling to recover from this recession, they could change this country overnight! ten dollars a week from one hundred million people would be a billion dollars a week or four billion dollars a month! It would also be 48 billion dollars a year if they gave ten dollars each week! This money could pay off a lot of debt for these people who are struggling to survive! In a short year the money they would give  could get the economy back on track and help a lot of people!  It does not matter if it is ten dollars a week or ten dollars a month or who gets the money it would change the country and help a lot of people! I would like to see the American people stand up and do something like this! I think it would help the people who would give as much as the ones they would be giving to!   
Nov 23, 2012 11:42PM
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What were the demands made by management, as they gave themselves bonuses and double digit pay increases? A Hostess baker writes:
What are the cuts demanded by the company?
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 self-funded pension and retiree insurance contributions for ever, over $4 per hour.
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.Why did the Union turn down the offer?
1) To force the company to negotiate in a serious manner that did not steal years worth of unpaid pension funds. We will risk closure for our pensions.
2) If the company will not take our pension off the table then we intend to help force the sale through liquidation in hopes of finding new, more reasonable, owners.Some "greedy" unions! Nobody in their right minds would accept this! Would you?

Nov 23, 2012 11:38PM
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A union is nesseary because of coparate greed period.
Nov 23, 2012 11:28PM
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Look at Kimberly-Clark, they make Kleenes, depends, Huggies, etc.  They sent all their production in Mexico.  It is sickening, you use to b able to pick up a package of Depends, for e.g.  it said Made In the USA, now in small letters barely noticable, made in mexico.  And the quality from mexico sucks.  Most Artificial Christmas trees are manufactured in mexico.  This crap needs to stop, start making things in Americ again!!!  I Only Support American made stuff.
Nov 23, 2012 11:17PM
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Okay, so, I'm having a hard time lamenting the failing of a company whose products kill the human pancreas. I'm alarmed to read these nasty chemical laden blood sugar spiking things are going to live on.

I just verified with an Elder the Unions have done nothing for about ten years. I asked, if my Elder thought the Unions could evolve to be useful right now, the answer? No.

 

I spent about 10 years with four different unions and found within all four, three private & one public, large numbers of workers that really sincerely hated their jobs but decided to stay stuck in hate and continue doing bad work rather than give up the so-called 'benefits.' I also found the Unions to be largely useless to me, one with low or no seniority. In fact, the lack of seniority lead me to be bumped and to claim Unemployment Insurance for the first time ever in my two decades of paid work career.

Historically, I understand the importance of Unions, but these days, when the extra monies of the Corporate Citizens are going into SuperPacs and Lobbyists and CEO Pay rather then living wages for those that actually produce the product the company makes its money off of, the Unions just seem to be another way to siphon money away from the Human Citizens. Especially when, because of a lack of living wages, workers are forced to turn to the government supposed to be Of the People For the People By the People for help buying food, becoming more educated, or even simply heating or cooling the house. Most recently, We the People even have to take care of our own Healthcare...

These days, I am sad to report, it seems, Corporate Citizens & Union Citizens really suck.

Nov 23, 2012 11:09PM
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"Hostess also plans to award bonuses to the officers and managers that helped run the company into the ground."

Nope, this wasn't another entitlement based argument slanted towards making the owners look like the villain.
Nov 23, 2012 10:51PM
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"$1.75 million to distribute to 19 executives", exactly why this company and this country is doomed. Going out of business and still looking to waste money. The GREED in this country is unbelievable! Yea the unions had a hand in it but that wasn't the only factor. Hostess and countless other companies wouldn't have gotten to a jam if they didn't waste money by giving GREEDY executives millions worth of bonuses and sending them to 10,000 a day spas. This majority of this country's priorities and morales are so f**ked up, it's no wonder this country is in the shape its in. But hey America keep it up, we will see how you are living in 5-10 years when we are in the next GREAT DEPRESSION!
Nov 23, 2012 10:45PM
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Jobs are going away in the USA at a fast pace! Ten thousand people could form an investment group to invest their way into a secure future!  If they could form a plan and get together and do it! They could raise ten million dollars and start investing!  The sky would be the limit if they could get it done. These 18,000 people could start by pooling a thousand dollars, to get started; then invest one hundred dollars each month to keep it going and growing! many of them could find jobs within the groups investments. sometimes people need to do it themselves rather than wait for things to become more fair from outside sources!
Nov 23, 2012 10:43PM
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Brilliant job of negotiation here. 18,500 people out of a job, was it worth it? Couldn't accept a slight decrease in pay and have a job! The management at the union keep their jobs and the workers are collecting unemployment, again was it worth it? The management at Hostess do not deserve bonuses, however no one else does either. Being rewarded for driving a company into bankrupcy is not an act that should deserve a bonus.
Nov 23, 2012 10:38PM
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Unions weren't the problem it was mainly the management or mismanagement to be correct. Yes Unions are a necessary evil to large companies but that is because large companies have screwed their workers for years in the past. During the early 1900"s labor was used and threw away like and old tool while the companies made millions (today that would be billions with a B). Sorry but I noticed all 19 big clowns with divide up almost 2 million for running the company in the ground but that is standard operating procedure for business today management never looses for it's mistakes instead it is easier to blame the unions. Twinkies will be back hopefully the management won't.
Nov 23, 2012 10:29PM
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Aw, come on folks. The union leaders know far better than you  how to bargain with management. They will  call management's bluff and save the union jobs. Wait, what was plan 2 ?  The up side is there will be a lot of bakers available  to bake cookies for Santa.
Nov 23, 2012 9:54PM
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Another chapter in the history of the american worker pricing itself out of a job.  Then they whine for Mr Obama to "fix it". 

Nov 23, 2012 9:45PM
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The way I see it, Hostess was sacrificed by the unions. In the end, the outcome was similar to any number of ways unions sacrifice the interests of their junior members to protect the benefits, pensions, and interests of the senior members. This happens all the time. Relatively speaking, Hostess was a little fish compared to the other enterprises they have substantial power and control over. How much do you think a truck driver who delivers the NY Times makes? If the unions had caved in this small case, it would have set a precedent that put all their other larger positions at risk. They simply couldn’t afford to take the chance. The unions probably saw the company as a lost cause anyway. I mean, come on, look at its products and tell me which one a consumer wouldn’t be better off without from a health perspective. The stuff is more poisonous than crack cocaine. Even the Mafia has a conscience somewhere. So, why not use this case as an opportunity to demonstrate their prowess at a modest cost. The unions put on a show, fighting valiantly to the death, knowing all along the company would die. Never forget, it’s all about power. Maintaining the image and appearance of power and control and the willingness to die to protect it is more important than actually having it in any particular situation. Once you give that up, you’ve got nothing. The leverage is gone everywhere. It all starts to make much more sense to me when I look at this case from the perspective of a gang.

Nov 23, 2012 9:17PM
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What you are all missing is we have to pay for the 18,000.   They go on the welfare line.  47% wasnt enough.

 

Nov 23, 2012 9:11PM
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Leave it to the 12 unions to put the company out of business.  Now Obama will have more on the entitlement line and they do not have to look for a job and they will get a free phone.  I am sure we are over 47%. 
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These people are the stupidest people in the world because they just lost their job for thousands and no jobs in all the towns it will afect,I hope they realize how stupid unions really are when they can't find another job!.
Nov 23, 2012 9:00PM
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The writer of this article is obviously  just another union parasite. Kill the host that its sucking dry then blame the company for being greedy and heartless for trying to make a profit.
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