Slashdot Mirror
Hostess To Close; No More Twinkies
RenderSeven writes "In a press release issued today, baker Hostess Brands asked a bankruptcy court for permission to close all of its plants and sell off their assets, immediately laying off 18,500 workers. Citing high labor and rising health care costs, increasing competition and growing consumer awareness of healthy foods, Hostess says it can no longer operate without union concessions. A crippling strike has already shut down operations at all facilities, and while the Teamsters Union has ratified a new contract to keep Hostess in business, the Bakers Union has refused saying they would rather see the company closed than accept pension cuts. The Teamsters union is urging the bakers union to hold a secret ballot on whether to continue striking; citing its financial experts who had access to the company's books, the Teamsters say that Hostess' warning of liquidation is 'not an empty threat or a negotiating tactic' but a certain outcome if workers keep striking. If your late-night programming is fueled by Twinkies, Ding Dongs and Zingers, better stock up now."
[Editor's note: A whole bunch of users submitted this news. I worry about our readership's cholesterol levels.]
Bimbo Bakery, a 10 billion dollar Mexican multinational conglomerate baking company, is looking to purchase them (for the second time.) in fact, Bimbo could have easily purchased the entire thing while hostess was on the ropes, as hostess is only worth 2.7 billion in revenue, but hostess (headquartered in texas) declined to do so.
Good people go to bed earlier.
Actually if you read some of the comments from the CEO. He admitted at townhalls with the employees that there was plenty of blame for the company's current circumstances to go all around (including management and the unions.) He was brought in during the bankruptcy to restructure the company and get it back on its feet. It was hemorrhaging money and he laid the case out for everyone. Surprisingly the Teamsters actually agreed to the pay cuts because they understood they'd be without jobs entirely otherwise. The bakers refused to acknowledge that the company was in such dire straights. They seemed to think management was bluffing, well in this case management wasn't.
That being said, I've been on the receiving end of a pay cut before and it sucks. But, it was better for me at that time to have a pay cut and search for another job than to have gone entirely without a paycheck. As much as it would've hurt financially the bakers should've seen reason. 90% of a paycheck is definitely better than no paycheck.
it wasn't Hostess management that did this. it was the Baker's Union. Hostess was in the midst of a managed reorganization to try and save it. Even the Teamsters union was going along with Hostess because they could see that it was this or no more jobs.
The Baker's Union (and possibly you as well) is living in a Marxist fantasy land where behind every "evil proletariat oppressing capitalist" is an endless pile of money that he just won't share. Back in reality the money was gone and it was this, or liquidation. The Baker's union chose liquidation. Not just for themselves (about 5000 people) but for the OTHER 18000 employees (including Management) too! Don't blame management for something they didn't cause.
Hostess will now be entering a court-ordered liquidation, and the brand rights will (if fate has a sense of humor) be sold to a non-union company in a right-to-work state. As it should be.
Official Heretic from the "Church of Global Warming". Proven right thanks to whistle blowers. AGW = Flat Earth Theory
They could have stayed in business by cutting costs because their product wasn't as in demand. But just like our wonderful country's population, the bakers union would rather lose everything that take a cut.
hey if the unions have to take a cut, the management should too, but the truth there was they were getting a 80% RAISE. If we want to be 100% honest here, we should drop the anti-union rhetoric because the truth is they had nothing to do with it. Hostess is owned by a group of venture capitalist firms who put their own people in charge of the company and completely tore it up from the inside out. They eliminated their distribution network, and increased profits by dismantling production to the point that it was impossible to go forward, then used the Unions as a scape goat as they go to scrap the whole company. The Unions had nothing to do with what happened as much of this was done before their contract even went up, including the scrapping of 9 of the factories. Anyone saying the Unions did this is buying the PR line and not looking at FCC filings for the last 3 chapter 11s they issued. I mean they had 7 CEOs in TEN YEARS from Christs sake.
"Slashdot, where telling the truth is overrated but lying is insightful."
The workers thought management was bluffing but oddly they really did not have large bags of gold they slept on.
Some of them did:
"Within a month of taking over, Rayburn had to preside over a public-relations fiasco. Some unsecured creditors had informed the court that last summer -- as the company was crumbling -- four top Hostess executives received raises of up to 80%."
"Hostess pays Rayburn $125,000 a month, according to court filings. At the same time Rayburn became CEO, Gephardt's son Matthew, 41, the COO of the Gephardt Group, was put on the Hostess board as a $100,000-a-year independent director"
Source: http://management.fortune.cnn.com/2012/07/26/hostess-twinkies-bankrupt/
And this was going on last year at the same time that the company was headed into bankruptcy again and management was asking for even more deep concessions from workers. From this and other things I have read, I get the impression that Hostess is a typical large company dealing with typical liability and productivity problems that couldn't manage through it.
Think aboout what "cuts to pensions" means. You work until you're too old to work, and then Mr. Twinkie Man tells you "We actually CAN'T pay you what we'd promised to." The money you have literally spent your whole life expecting...
By the way, last time the same union agreed to a benefits cut, Hostess then welched on their word and went back into Chapter 11 hearings anyways...
http://m.washingtonpost.com/national/on-leadership/why-didnt-hostess-workers-believe-the-threats/2012/11/16/0638138e-302f-11e2-a30e-5ca76eeec857_story.html
Or a long series of unions taking a bigger and bigger piece of the pie till not enough was left to run the business on.
Your point of view is directly contradicted by reality, as the average American wage has stayed mostly flat since the late 60s and union membership has never been lower.
The claim that if unions went away today those laws would go away is totally wrong. That is what many people think. If unions would go away, companies would force their workers to work 20 hours a day 7 days a week for 30 hours of pay at a really low rate. Their pensions would go away. That is not going to happen. Unions keep on repeating this to get people to vote the union way.
The economy has grown in leaps and bounds since [arbitrary date], the stock market is higher than ever, unions are weaker than ever,
pensions are almost entirely nonexistent, and out of all that wealth... workers have been paid just enough to keep up with inflation.
Oh yea, worker productivity has almost doubled over the same period of time and black lung is making a comeback in amongst coal miners.
Something is rotten in the state of Denmark and it ain't the unions.
[Fuck Beta]
o0t!