In my opinion the company failed due to poor management. The unions made huge compromises, management did not. As a business owner I'm aware that if my company fails it is my responsibility, not my workers.
Gonna be pretty funny when they sell the rights to the name and another bakery starts churning out identical Twinkies, and all the people that stockpiled hoping to get rich on ebay are stuck with a pile of out of date baked goods.
In my opinion the company failed due to poor management. The unions made huge compromises, management did not. As a business owner I'm aware that if my company fails it is my responsibility, not my workers.
I agree with this, with an interesting distinction being between the first sentence and last one.
The management in this company were not owners, were they? Wasn't the owner of the company a hedge fund?
OWNERS care about their businesses. Hedge fund managers are not owners of the businesses within their portfolios. Their "company" is simply the money which can be generated out of the resource, the companies they keep.
I looked at the Facebook page of hostess the other day and they had the nerve - raw nerve - to say they were closing DUE TO the strike. What a bunch of carp.
Only a fool would have seen the books on Hostess over the years and not known exactly how this story would play out, and money people generally are not fools. They are like bookies, and sometimes better for the loser makes them the winner.
We support this sort of behavior, overtly and tacitly, by giving our money to these sorts of entities. When someone doesn't understand that, it's one thing. But to be aware of how it works, and continue to support them by buying their goods - that is a choice we make.
In this case, buying the Twinkies is not what I am talking about, but investing in the fund which ate Hostess.
“I think we’ll find buyers,” CEO Gregory F. Rayburn told ABC News on Sunday. ”A few have surfaced already since Friday expressing interest in the brand to acquire them.”
Con Agra and Flowers Foods are among the companies that have expressed interest in Hostess, but Mexican company El Grupo Bimbo may have an edge, the Christian Science Monitor reported Saturday. Grupo Bimbo, headed by Mexican billionaire Daniel Servitje Montull, is the largest bread-baking company in the world.
Economists say part of the reason Hostess struggled was due to high sugar tariffs meant to protect local producers, the Monitor reported. Grupo Bimbo could take advantage of lower sugar prices in Mexico."
It is ironic that the Republicans would be whining about lost jobs as fallout from the great Twinkie failure. An understanding of basic economics would show that consumer dollars normally spent on Twinkies will now be spent on another food product (if you want to call Twinkies food). There is no net loss of jobs, just a shift of jobs to a company that can operate more effeciently. Seems like capitalism doing its job. The only loser is the investor who financed the buyout.
Edit, jobs shifting to Mexico would be a negative effect
There is no net loss of jobs, just a shift of jobs to a company that can operate more effeciently
You're ignoring the important part: the new jobs will be in a company with lower pay and worse employee working conditions and the industry as a whole will be shifted to an expectation of more income for the execs vs. the lowly workers.
I don't like unions, but I think they are a necessary opposing force against corporations. The hope is that these two behemoths, both of which suck, will somehow balance out to something that seems rational and fair and creates jobs with liveable wages and products of reasonable quality and efficiency.
Creditors of Hostess Brands Inc. said in court papers the company may have "manipulated" its executives' salaries higher in the months leading up to its Chapter 11 filing, in what the creditors called a possible effort by Hostess to "sidestep" Bankruptcy Code compensation provisions.
BCTGM International Union President Frank Hurt stated, "The recent claim by Hostess CEO Greg Rayburn that our strike is the reason for the closure of the three bakeries is simply not true. That statement is a continuation of a disturbing pattern by the company of issuing public statements that are erroneous at best and disingenuous at worst.
"Our members rejected the company's outrageous proposal by 92 percent in September. Rejection came from every corner of the country. They were being asked to vote on a proposal with massive concessions, knowing that their plant could very well be one of those to be closed.
"Our members are on strike because they have had enough. They are not willing to take draconian wage and benefit cuts on top of the significant concessions they made in 2004 and give up their pension so that the Wall Street vulture capitalists in control of this company can walk away with millions of dollars."
Over the past eight years since the first Hostess bankruptcy, BCTGM members have watched as money from previous concessions that was supposed to go towards capital investment, product development, plant improvement and new equipment, was squandered in executive bonuses, payouts to Wall Street investors and payments to high-priced attorneys and consultants.
BCTGM members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.
Over the past 15 months, Hostess workers have seen the company unilaterally end contractually-obligated payments to their pension plan. Despite saving more than $160 million with this action, the company continues to fall deeper and deeper into debt. A mountain of debt and gross mismanagement by a string of failed CEO's with no true experience in the wholesale baking business have left this company unable to compete or survive.
Blaming the union is like Capt Edward Smith blaming the iceberg for sinking the Titanic.
Hostess owns 29 brands. This will likely be a classic case of the sum of the parts exceeding the whole.
When was the last time I consumed a product from one of those brands?
The only one I can think of in at least several years is Parisian Bread.
From wikipedia it seems as if the unions have already made concessions
...February 3, 2009.[15] The plan included a 50 percent equity stake by Ripplewood Holdings and lines/loans by General Electric Capital and GE Capital Markets, Silver Point Finance and Monarch Master Funding. Interstate's union workers made contract concessions in exchange for equity
There may be hope for Twinkies after all: Hostess Brands Inc. and its striking union agreed to a mediation that will forestall the company’s planned liquidation for the time being.
At a bankruptcy court hearing Monday in New York, 82-year-old Hostess had planned to ask permission to start shutting down its business. Instead, Judge Robert Drain urged the company and the Bakery, Confectionery, Tobacco Workers and Grain Millers International union to consider mediation.
Both sides agreed to try to work through their conflict, which would preserve more than 18,000 jobs that will otherwise disappear if the Irving, Texas-based company closes its doors. Mediation hearings will begin in private on Tuesday.
Just arrived in the mail is a package from the Bakery Union and Industry Pension Fund. It details the steps being made to get the fund back on firm financial footing.
This includes decreasing the pension pay out. It was already a modest sum. After 30 years in the industry you got $1300 per month. Now it's less.
Hostess was collecting pension funds, but not turning those funds over to the pension board.
They not only screwed over the employees, but their fellow baking companies. The baking companies will now have to increase their contributions 5 to 10% to make up for the shenanigans Hostess pulled.
Let us know!