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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Other bakeries make Twinkie clones. I was in Safeway today and there are several variations on twinkies; lemon cream and more.
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?
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.
Nope, this wasn't another entitlement based argument slanted towards making the owners look like the villain.
Another chapter in the history of the american worker pricing itself out of a job. Then they whine for Mr Obama to "fix it".
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.
What you are all missing is we have to pay for the 18,000. They go on the welfare line. 47% wasnt enough.
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