Hostess' tough road out of bankruptcy

Employees at the embattled company are being asked to take an 8% wage cut this year.

By Jonathan Berr Aug 23, 2012 1:13PM
Hostess, the maker of Twinkies, Sno Balls and Wonder Bread, is trying to work its way out of its second bankruptcy in four years, and CEO Greg Rayburn told CNBC it's not going to be easy.

"We have a path to emerge, but it's a difficult one and it's a painful one," he says in the following video. "It's painful for the employee because it requires wage concessions and pension concessions. They have been through this wringer once already."

Post continues below.
All employees at Hostess are being asked to take an 8% wage cut this year, Rayburn said. The company's cost structure is the problem, as revenue remains "solid" thanks to the company's powerful brands. Though it may be tempting to blame unions for the company's woes, Rayburn doesn't buy that argument.

"I don't think unions bring down companies," he said. "In Hostess' case, there is plenty of blame for everyone."
448Comments
Nov 16, 2012 12:53PM
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No Johathan Berr, 

Management is to blame and responsibility always rests on managements shoulders.

Go take a course on Total Quality Management and you will know what I am talking about.
Aug 26, 2012 3:12PM
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Why not give us a list of salaries, numbers at each, and the company's annual losses so we can judge.  Before Reagan, I bet Hostesses CEO made the typical salary of the time, about 29x his average workers pay.  I bet the CEO makes 400x avg. workers pay now with several other top dogs making similar multiples.
Aug 25, 2012 12:51PM
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Lets not forget that Bimbo bakery co. from Mexico came into the US. and they are able bake their products in Mexico cheaper than Hostess or any other US baker. Hostess wonder bread has had some poor management in the past. Having the unionized employees take a 8% pay cut without management taking a like pay cut is unfair and won't work. It seem like every company that is in trouble the first thing do is cut hourly employee pay, when they stay in trouble a year or two later they go broke and out of business. Hourly people and white collar office help lose their jobs but upper management bails with a large golden parachute paid for by the pay cuts that hourly and office help took in the recent past.
Aug 25, 2012 10:18AM
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They are going broke because they make garbage products that few want anymore. 
Aug 24, 2012 11:11AM
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If  CEO take a small cut from his Millions dollar salary, everything should be ok

Aug 24, 2012 10:23AM
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Apparently some one who doesn't like Mormons answered. I don't know what mormons had to do with this, maybe this person sees mormons behind every tree. Harry Reid is a mormon, does that make him bad? I think religion shouldn't be an issue in anything.
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Painful but Hostess has great products they will get through this SAVE THE TWINKEE. 
Aug 24, 2012 8:29AM
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Windy City Guy,

A republican in the White House created the problems with jobs we have today (don't get me wrong- BOTH parties are to blame or the sad state of the country)- they aren't going to be the ones to solve them- solving our nations problems includes actually TAXING those who have money (instead of heaping more taxes on the midde class), actually TAXING companies that send jobs OUT of the US, and actually TAXING China to import its craptastic gabage (even the Chinese couldn't believe how badly thy screwed us when they were in Chicago). And remember, Government doesn't create jobs, companies do. And CEOs are going to do whatever puts more money in their own pockets. You want the jobs back? Raise taxes the companies that would rather pay the equivilent of $1.50 per hour for craptastic support in India- make that "cheap support & labor" so expensive compaies have no choice BUT to bring it back to the US. Tax the hell out of Imported goods to make it cheaper to be Made in America. And finall, and most importantly, get every lazy @$$ American off their kiesters and back into theAmerican Pride mindset- every worker who won't take a job because its "beneath them" or because they can make the same amount of money on Unemployment doing nothing, all the families who have spent GENERATIONS on welfare- cut off these people's support and MAKE them work- bring QUALITY and PRIDE back to American labor- American products should be the BEST QUALITY and instead are typically known for being craptastic itself.

Aug 24, 2012 8:19AM
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I hope that this country can try to save ths company. I remember as a small child having Daddy time with my Dad and out came the Twinkies, Sno Balls, etc. They are memories worth saving!!! Now I am a Mother (proud) and I have these moments with my three children (1 boy 2 girls) who are 11 and 4 and they squill with excitment every time I wipe out the Hostess Box and we sit outside, at the park, beach or on the couch for some good old QUALITY time talking about the day past or the day to come  with a great snack that is delicious at any age. DO nOt let this just Go Away like this country has with so many other great things that should have been cherished and shared with the youth of today and tomorrow. 
Aug 24, 2012 8:14AM
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The CEO and all the rest of the executives should be the first ones to take a pay cut!!
Aug 24, 2012 8:11AM
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to Weaselboy 77, I bet you eat tofu and yogurt.  What a waste of a life.
Aug 24, 2012 8:07AM
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yup here we go the usual... screw the workers give the ceo more pay
Aug 24, 2012 8:02AM
Aug 24, 2012 8:00AM
Aug 24, 2012 7:59AM
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mgmt is takin the same cuts, this is take a cut or go home and find another job. Plenty of jobs out there right?
Aug 24, 2012 7:59AM
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I am going to buy one box of Twinkies every week.  To imagine a country without Twinkies is akin to imagining a country without beer.  Come on Hostess, keep the Twinkies coming.  It's a basic food group, it's Americana.  America needs certain basic items to survive as a happy healthy nation, beer, hot dogs, and Twinkies.   A Repblican in the White House creating jobs will also help.
Aug 24, 2012 7:58AM
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the employees  have taken a 5,000  dollar pay cut  afew years back  now they want more  how much more blood do they need from the workers
Aug 24, 2012 7:47AM
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If the employees are being asked to take an 8% cut, what % are the cuts are the executive management taking???  And if they are taking a cut are they also getting the same deal as the rank and file???  It should be across the board.  All benefits for executives should be ceased until they are profitable.  And if they get their benefits back, so too should the rank and file, damn any union negotiations.

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