Hostess' tough road out of bankruptcy
Employees at the embattled company are being asked to take an 8% wage cut this year.
"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."
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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."
| Tags: | Jonathan Berr |
As long as the execs are taking equal or bigger cuts, afterall they are running the company.
I agree with other here though, their snacks are so full of overprocessed garbage it's not even funny. Let alone not even having any real good flavor or taste. Couple that with a growing segment that is trying to eat better and is also getting tired of these companies filling our foods with all this artifical crap (alot of which is banned in other countries) and this is not a surprise. Like others have said, we know its a twinkie and is not going to be good for you, but drop the fake crap and go back to real ingredients. Being one of a handful of items that would still be around after a nuclear war is not a positive marketing feature when it comes to food. The solution (while not a complete cure all) is obvious, just whether or not they want to implement it.
I think its time
They need to go back to the days where Hostess snacks were actually tasty. Twinkees used to have a shelf life of 2-5 days because they were made with actual cake and real cream filling--something that current versions of Twinkees could only dream of.
Two years ago when my wife was pregnant with our little girl, I got a chance to try all the various Hostess products and I couldn't stand any of them. Cupcakes, Ho-Ho's, Twinkees, Ding-Dongs, Donettes (chocolate and powdered versions) and Snow-Balls were all sickly sweet, bland and flavorless, hollow and empty tasting. The chocolate (if you want to call it that) drizzle on top of the cupcakes and donettes, for instance, would flake off like paint and it tasted terrible as well.
Hostess needs to go back and start over with all of it's products. Ingredients and preservatives need to be completely reformulated. Use adults as taste testers instead of children. Kids will eat anything sweet and tell you it's good. That's not an honest assessment of the products if you ask me.
Of course unions are part of the problem. Route Sales Reps belonging to the Teamsters have a 30 year and out pension, in most locals it is 2500 per month. Inside baking and shipping employees are hitting 20-25 per hour with full benefits.
But this is only a small piece of the problem. When Wonder/ Hostess was purchasd by Interstate Baking some years ago, Interstate was 1/3 the size and overpaid dramatically for the company. So much so, they could not service the debt they incurred. It was a power play by the CEO of Interstate, and not to be missed, it was his parting gift to a company he had worked for 30 years that had never been more than marginally profitable it's entire existence. They misused the Brands of Hostess and Wonder to the point they lost value.
Little Debbie is the low cost producer in the snack cake industry because they have Superplants and ship all over the US. Debbie also owns no route trucks as they are distributed by independent contractors, non union, they are business owners. Interstate tried to stay with many regional bakeries based on the old adage that bakery products could not be shipped long distances. Wrong again.
I speak with authority on this subject as I spent over 35 years in the industry as a manager and Regional VP
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