22
   

Days of the Twinkie may be numbered

 
 
Cycloptichorn
 
  4  
Reply Fri 16 Nov, 2012 05:16 pm
Wow, this here is some sad **** - the company triples the pay of it's CEO and raises other executive pay by 80%, while simultaneously forcing the worker base to accept pay cuts and benefit cuts. And it's the WORKERS fault that the company is going under???

Cycloptichorn
edgarblythe
 
  1  
Reply Fri 16 Nov, 2012 05:17 pm
@Cycloptichorn,
Damn straight. That's job makers heaven.
0 Replies
 
edgarblythe
 
  3  
Reply Fri 16 Nov, 2012 08:52 pm
Hostess blamed heavy debt and burdensome wage and pension obligations for its financial woes. It said a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), which began Nov. 9, was part of a long series of battles between labor and management that contributed to the company's inability to restructure its finances and produce and deliver products at several facilities.

But union officials and line workers said union workers had already agreed to a series of concessions over the years and the company had failed to invest in brand marketing and modernization of plants and trucks and had focused instead on enriching owners such as private equity firm Ripplewood Holdings and hedge funds Silver Point Capital and Monarch Alternative Capital.

Officials at the three firms declined to comment.

"Our members decided... they were not going to agree to another round of outrageous wage and benefit cuts and give up their pension only to see yet another management team fail and Wall Street vulture capitalists and 'restructuring specialists' walk away with untold millions of dollars," said BCTGM International Union President Frank Hurt.

Picketing workers echoed the sentiment.
ossobuco
 
  1  
Reply Fri 16 Nov, 2012 09:07 pm
@edgarblythe,
I just bet their twinkie jokes are more horrendo than ours.
0 Replies
 
hawkeye10
 
  0  
Reply Fri 16 Nov, 2012 09:15 pm
this is a classic example of greed and mismanagement. i dont eat this stuff anymore but back in the day all the cool parents packed Hostest products in their kids lunchbox. many of the products will be made going forward, as the recipes and trade names are sold off.
hawkeye10
 
  -1  
Reply Sat 17 Nov, 2012 12:24 am
@hawkeye10,
the more i read into this the more I am convinced that the two hedge funds who own the company decided some time ago that their exit plan was to kill the company and auction off the assets. this is great news, now the brands have the opportunity to find competent management under a new owner, management who will almost certainly improve the product. there is no reason, for example, that the Twinkie brand would not take off if they got the Oreo treatment of new and seasonal fillings.

i am a socialist but we live under capitalism.....in this system bankruptcy and closing bad companies is essential to good health. what is happening to Hostess is what should have happened to GMC. We would have all been better off had this happened to them too, diseased companies must be killed for the greater good.
0 Replies
 
Ceili
 
  2  
Reply Sat 17 Nov, 2012 12:31 am
They're still making twinkies in Canada. So if you need a fix, find a Canuck friend.
I've only ever had one, in my entire life. I wouldn't miss them if they disappeared but I do feel for the employees. I hope a new company comes in and saves the day.
hawkeye10
 
  0  
Reply Sat 17 Nov, 2012 12:41 am
@Ceili,
Ceili wrote:

They're still making twinkies in Canada. So if you need a fix, find a Canuck friend.
I've only ever had one, in my entire life. I wouldn't miss them if they disappeared but I do feel for the employees. I hope a new company comes in and saves the day.


there will be twinkies, but they will not be made by former hostess workers nor will they be made in the former hostess plants.
hawkeye10
 
  -1  
Reply Sat 17 Nov, 2012 12:44 am
@hawkeye10,
Quote:
Both takes are exceptionally reductive. Let's look at Wall street first. The private equity guys will likely lose most of their investment, since their stake in the company will be worthless. It's also not clear that the hedge funds and other lenders that supplied Hostess with its mountain of loans will fare much better. When it entered Chapter 11 this year, the company owed around $935 million, if you include the additional loan it took out to keep the lights on and creme flowing. Meanwhile, Reuters reports that the company listed $981.6 million worth of assets in its bankruptcy filing. There's virtually no chance they'll sell for that much in a liquidation. One of the failed bids to buy the whole company out of its last bankruptcy valued it at just $580 million. And that was when it was a going operation. If you factor in the interest payments Hostess has been making on its loans, some of the creditors might end up making out ok. But it doesn't seem likely anybody will make a killing.

http://www.theatlantic.com/business/archive/2012/11/whos-to-blame-for-the-hostess-bankruptcy-wall-street-unions-or-carbs/265357/

the thing this guy does not understand in my opinion is that the brands are going to be worth a lot more after being severed from the diseased company that previously owned them.
hawkeye10
 
  0  
Reply Sat 17 Nov, 2012 12:57 am
@hawkeye10,
the new owner?

http://4.bp.blogspot.com/_ljhroY9cQb4/TOBxMRUbfzI/AAAAAAAAAoU/BXbYg0tXiDw/s1600/47281bimbo.jpg
0 Replies
 
Finn dAbuzz
 
  0  
Reply Sat 17 Nov, 2012 01:36 am
@rosborne979,
You can't go home again.

Actually your tastebuds were quite different 30 years ago then they are today.
0 Replies
 
Finn dAbuzz
 
  0  
Reply Sat 17 Nov, 2012 01:38 am
@Enzo,
Enzo wrote:

How many times have Hostess Brands been in and out of bankruptcy in the last 20 years? I can think of at least two times from the top of my head. Poor management, that's all.
And apparently, union goons in this case who don't think ahead believe that no job is better than a job. I guess the bakers just want more dough.


Exactly.

Lousy management and union parasites make for a deadly combination.

This was a brand and product line that should have assured profits for decades to come.
0 Replies
 
Finn dAbuzz
 
  0  
Reply Sat 17 Nov, 2012 01:39 am
@djjd62,
So wrong
0 Replies
 
Finn dAbuzz
 
  0  
Reply Sat 17 Nov, 2012 01:45 am
The hell with Hostess (although I will will miss their creme filled cupcakes) and the horrendous Little Debbie plasti-treats, the real tragedy is that Hostess bought Drakes and so Yankee Doodles, Devil Dogs, and little crumb cakes will, apparently, be no more.

hawkeye10
 
  0  
Reply Sat 17 Nov, 2012 01:59 am
@Finn dAbuzz,
Finn dAbuzz wrote:

The hell with Hostess (although I will will miss their creme filled cupcakes) and the horrendous Little Debbie plasti-treats, the real tragedy is that Hostess bought Drakes and so Yankee Doodles, Devil Dogs, and little crumb cakes will, apparently, be no more.



bimbo and the other majors will not be interested, but there are small companies who will buy the good regional brands. hell, they might even buy a hostess plant though not likely. Bimbo will not as they already have enough plants. the US bakery sector has a lot of excess capacity, generally the hostess plants are not needed and will be scrapped. this is capitalism at work. the workers are not needed either so it is bye bye for them. their pension funds are under capitalized by $2 billion, so God help them.
hawkeye10
 
  0  
Reply Sat 17 Nov, 2012 02:07 pm
@hawkeye10,
Quote:
C. Dean Metropoulos & Co., the private equity firm that owns Pabst Brewing Co., is considering an offer to buy Hostess Brands Inc., which said today it plans to liquidate its business.
“Our family would love to purchase these iconic brands,” said Daren Metropoulos, a principal at the Greenwich, Connecticut-based firm, which paid $250 million for Pabst in 2010. “We are actively pursuing this deal as no doubt strategics will also.”
C. Dean Metropoulos, founder of the firm, has specialized in purchasing struggling brands, such as Chef Boyardee and Bumble Bee Tuna and turning them around. The firm paid close attention to the maker of Twinkies and Wonder Bread during its bankruptcy proceedings, Daren Metropoulos has said.
“We have analyzed this opportunity very carefully for a few years now,” Metropoulos said in an e-mail. “Shedding the complications of the unions and old plants makes it even more attractive.”
The 82-year-old company also makes Hostess CupCakes, Ding Dongs and Ho Hos. The private equity firm is “fully prepared to participate in any process involving selling the brands,” Daren Metropoulos said.
Hostess said today it will fire more than 18,000 workers and liquidate after a nationwide strike by bakery workers crippled operations. The company struggled after changes in American diets led to years of declining sales while ingredient costs and labor expenses climbed.
The company, based in Irving, Texas, plans to sell its products until supplies are exhausted. The decision to liquidate capped a weeklong standoff between Hostess, once the largest U.S. wholesale baker, and a union that called its proposed labor contract “horrendous.”

http://www.bloomberg.com/news/2012-11-16/pabst-owner-metropoulos-is-considering-bid-for-hostess-brands.html

please let this not happen. these brands need competent management desperately. yet another private equity firm is not going to be able to put together a good enough team fast enough to get the job done. these brands need a bakery management team that is already in place and proven, like Bimbo Group.
hawkeye10
 
  0  
Reply Sat 17 Nov, 2012 02:26 pm
@hawkeye10,
Quote:
Grupo Bimbo, which owns the Arnold brand of bread and is currently the number one bread company in the U.S., would likely be banned from making a bid because of antitrust concerns, according to one of the bankers. Flowers Foods, the second largest U.S. bread company, could conceivably buy some of the bread division’s regional assets and operations in order to expand its Midwest operations, the banker said. Flowers owns the Nature’s Own brand of bread

http://fox8.com/2012/11/16/hostess-brands-closing-for-good/

bimbo already makes wonder bread in mexico, and will continue to do so, however nobody will make it in America now as there is no market for it, so antitrust issues about bread companies will not matter. Bimbo does only a small amount of snack cake production in the US so they should be free to buy all of the hostess and dolly madison products if they want them. flowers is a likey buyer for the brands that finn is concerned about, in which case they would be more than fine because flowers management knows what they are doing. flowers was up over 10% yesterday on speculation that they will buy hostess product lines and do good things with them.
hawkeye10
 
  0  
Reply Sat 17 Nov, 2012 02:54 pm
@hawkeye10,
Quote:
In a bankruptcy filing earlier this year, Hostess assessed the value of its trademarks and intellectual property at around $135 million. If the near-panic among junk food aficionados is any indication, it should be able to sell the brands easily.

http://www.huffingtonpost.com/2012/11/16/twinkies-wonder-bread-buyers_n_2146639.html?utm_hp_ref=business

hostess management being hostess management this is way off the mark. we have 100 year old brands which even after massive mismanagement over a decade still sold $2.5 billion in product in the USA last year but they are only worth $135 million??!!
0 Replies
 
Setanta
 
  1  
Reply Sun 18 Nov, 2012 04:06 am
Oh yeah, union parasites . . . Finn could make someone puke while eating their ho-ho. The union were being asked to take a pay cut equivalent to losing one month of their annual salary, at the stame time that management, who were driving the company into the ground, were given huge pay raises and bonuses.

And Finn whines about union parasites. That clown is so eaten up with rightwingnut, brain-dead, teabagger ideology that what few wits he ever had are now astray.
hawkeye10
 
  -1  
Reply Sun 18 Nov, 2012 04:20 am
@Setanta,
the consensus among educated observers is that at the very end both sides where to blame. I however think that this company was mismanaged
for a very long time, and the biggest roadblock to reaching a deal was falling sales thus less of a pie to split, which was 100% managements fault.
Quote:
Although it will be remembered for taking a hard line at the end, Hostess isn’t a typical union-busting employer. The website of consulting firm Gephardt Group — founded by former U.S. Rep. Richard Gephardt, a longtime friend of organized labor — lists Hostess as a client.

Some people are trying to assign white or black hats to the strikers in this saga, but neither variety of head wear really fits.

These aren’t noble workers who “have bravely taken a stand against the corporate race to the bottom,” as AFL-CIO President Richard Trumka said in a statement. Nor are they ungrateful louts who deserved to lose their jobs, as some right-wing commentators have implied.

They’re simply human beings who got caught in a conflict and couldn’t find a way out. For that failing, labor and management must share the blame

http://www.stltoday.com/business/columns/david-nicklaus/at-hostess-culture-of-confrontation-trumped-economics-and-common-sense/article_f8579f7e-c8f1-527d-bc00-763782e68568.html
 

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