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The Glorious Return of the Twinkie
iggymanz writes "The geek food staple the Twinkie is coming back. The sturdy main component of the foundation to the geek four food groups of sugar, fat, caffeine and bacon — with rumored shelf life on the order of the time span to cool a white dwarf to room temperature — the Twinkie, along with Ding-Dongs, Ho-Ho's and Cupcakes, will be returning 15 July 2013 to the shelves under new management of Apollo Global Management and C. Dean Metropoulous & Co which paid over 400 mega dollars (U.S.) for the brands."
with rumored shelf life on the order of the time span to cool a white dwarf to room temperature
From the AP:
During bankruptcy proceedings, Hostess had said that its overall sales had been declining, although the company didn't give a breakout on the performance of individual brands. But Seban is confident Twinkies will have staying power beyond its re-launch.
As for the literal shelf-life, Seban is quick to refute the snack cake's fabled indestructibility.
"Forty-five days - that's it," he said. "They don't last forever."
The reason that Hostess went under is that management refused to play nice with their unionized workforce, and they decided that they'd rather have no company than a union shop. Now that the union is busted, they've restarted production with a non-unionized workforce, "generously" allowing those workers to return to their old jobs at about 1/3 what they were paid before.
And if you're wondering which side to blame: Before the strike that ended Hostess, there were a couple rounds of the union taking pay and benefit cuts followed by management giving themselves bonuses for convincing the union to accept the cuts. That's why the union didn't buy the "but if you don't take the cuts, the company will go under" argument.
I am officially gone from
This is another case of corporate S.O.P: declare bankruptcy for one reason; to void any and all obligations to current - and especially - retired employees.
So as you gorge on your new Twinkiees, try to ignore that no doubt they were made by newly or re-hired workers from the now-permanent underclass: longer hours, lower wages, little or no benefits, and laughable health insurance.
Not that much of this will matter to the increasingly Randian crowd on Slashdot.
The union took cuts twice, and each time management gave themselves huge bonuses (million +), . SO after that, why would the union cut yet again?
The union stepped up and did their part, and management screwed them, and refused to make an actual management changes.
The Kruger Dunning explains most post on
It seems wrong that a brand discontinued by its owner should sell for $400 million.
Perhaps I just don't understand the consumer business.
Maybe that's why I'm a hardware designer...
It's not really the consumer business, it's the corporate chop-shop/knacker business.
"Hostess Brands" has reasonably strong product lines and revenue; but it was having trouble with those pesky 'employees' who wanted 'the wages and benefits specified in their contracts', like some kind of parasitic commies or something. Some of them even had the temerity to suggest that demanding that they take major cuts when the 'Chief restructuring officer' and other higher ups had received 80% raises was a show of rather bad faith.
By chopping up the company for parts, the various brands, which are valuable, can be divorced from any "legacy pension and medical benefit obligations and restrictive work rules"(as the company describes them, in the self-pitying tones of one who has conveniently forgotten agreeing to them...) and turned into sweet, sweet cash, any facilities worth keeping can be sold off, and operations and creditors who actually matter can continue as normal. (Thanks to a little strategic-under-funding of the pension plan, American taxpayers will get to do their part to ensure that real creditors come out unscathed.
Nice rewrite of what actually happened. One of the two major reason that Hostess escaped bankruptcy in 2009 was that the union allowed thousands in job cuts and agreed to benefit cuts to the tune of $110 million. So to act like the unions did nothing is utter nonsense. They only threatened striking after the incompetent management told them that they had to make even deeper concessions
The union stepped up and did their part, and management screwed them, and refused to make an actual management changes.
Actually, no.
I followed this story. The way it actually worked:
Hostess went into bankruptcy in 2004. It found investors who bailed it out and it kept going.
http://en.wikipedia.org/wiki/Hostess_Brands#Bankruptcy_.282004.29
Hostess went into bankruptcy again. It found additional investors who bailed it out and it kept going.
http://en.wikipedia.org/wiki/Hostess_Brands#Bankruptcy_and_liquidation_.282012.29
Hostess was running out of money. Management set up a deal that would cut costs by paying workers less. This was not what the workers wanted, but according to management, it was essential to save the jobs.
One thing that riled up the workers: management got paid a lot. In an effort to make the workers happier, the top four guys at Hostess had their salaries lowered to $1 per year for 2012.
http://management.fortune.cnn.com/2012/07/26/hostess-twinkies-bankrupt/
But the major costs at Hostess had to do with worker salaries, particularly with respect to delivery of Hostess products. Union rules required Hostess snack foods and Wonder bread foods to be delivered on different trucks, which had to be loaded by different people. A "Hostess" worker couldn't load a "Wonder" truck, a "Wonder" driver couldn't drive a "Hostess" truck, and the company couldn't contract out delivery. So, if a small town in a distant location wanted to buy Hostess cakes and Wonder bread, two trucks would have to drive out there, not one. Also, there is some complicated stuff I don't really understand about Hostess paying pensions to a whole bunch of workers, many of whom had never worked for Hostess.
http://news.investors.com/ibd-editorials-on-the-right/111912-633985-unions-dont-always-benefit-workers.htm?p=full
http://ohioansforworkplacefreedom.com/how-unions-killed-twinkies-and-wonderbread/
Now, pay attention, because here's the key part: the Teamsters Union had been fighting with Hostess management, and they had seen the accounting numbers, and they believed that (at least on this issue) management was not lying. If Hostess didn't cut labor costs, it was doomed.
I am not an expert on unions, but my impression is that the Teamsters Union is not exactly a shill for management.
It wasn't Teamsters Union workers who went on strike: it was workers of a smaller union called the Bakery, Confectionary, Tobacco and Grain Millers International Union (BCTGM). The Teamsters Union publicly told BCTGM not to strike. Check out this page from the Teamsters Union web site:
http://www.teamster.org/content/teamsters-bakery-workers-should-hold-secret-ballot-vote-hostess
The story gets even crazier. Management publicly told BCTGM that if the strike wasn't over by a specific date, they would shut down Hostess. BCTGM continued to strike. Management shut down the company. Then... a judge ordered both sides into an extra round of negotiations, and I thought to myself, "Here is where BCTGM can back down yet save face. They were unwavering in the face of a threat, they can proudly tell their members that they didn't back down until they were forced to, but they can still save all the jobs." But it was not to be. BCTGM continued to strike and Hostess shut down.
lf(1): it's like ls(1) but sorts filenames by extension, tersely
Unions had already agreed to $100 million in concessions during the previous bankruptcy. The bakers union was being asked for something like an additional 25% in cuts over 5 years, while there were reports of raises and bonuses for management. On top of all that, management had stopped contributing to the pension fund and there is still a lawsuit over that. Agreeing to the cuts would have taken wages well under the market average could have depressed wages for the entire bakers industry. So let's not try to play this as a one-sided "unions are dumb" argument. There were good reasons for the unions to reject the concessions management proposed.
Wrong.
Private equity backers had loaded the company with debt, That was the problem. The trivial saving that might have happened if they combined the two entities(breads and cakes) has just become an knee reaction from anti-union groups.
lets not that division went up into management. Upper Management tried play the unions off each other to take the light off the private equity shenanigans.
The Kruger Dunning explains most post on
It would be nice if internet feudalists didn't offer totally blind support for every robber baron.
I mean, are you denying that the union accepted several wage consessions before striking? Are you denying that management then gave themselves raises? Are these not facts?
Tell me, in what way is my support blind? It appears to be supported by facts.
Give me Classic Slashdot or give me death!
I've got MOD points but I can't let this slide. The management was very, very competent. It's just they were after something other than a successful company. To wit: The Pension Fund. The hard part about stealing a pension fund is doing it legally. It requires enormous skill, business and legal knowledge to do it.
What Hostess' management did wasn't just mismanagement, it was a complete lack of management. The bought the company, paid themselves just well enough to stay within the bounds of legality, and then ignored the company entirely. They put no effort into expanding, into controlling and managing the supply chain, or into anything else. Then they sat back, waiting for the company to die and used the pension to pay back the creditors they'd racked up debt with.
The last part that makes it all nice and legal is when a judge ruled that the creditors get paid before employees do. If you paid your own cash money into your pension while working at Hostess you literally got robbed. As an added bonus they killed a major Union without any bad press.
But nobody talks about that. All they talk about is playing an imaginary game of chicken. FYI: You can't win a game that the other side isn't really playing.
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