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Hostess Saves Twinkies By Automating, Fires 94% Of Their Workforce (washingtonpost.com)
An anonymous Slashdot reader writes:
Where Twinkie once employed 22,000 workers in more than 40 bakeries, their workforce is now down to just 1,170, reports the Washington Post, relying mostly on robotic arms and other forms of automation. "This 500-person plant produces more than 1 million Twinkies a day, 400 million a year. That's 80% of Hostess' total output -- output that under the old regime required 14 plants and 9,000 employees."
"We like to think of ourselves as a billion-dollar startup," Hostess chief executive Bill Toler said Tuesday, announcing that Hostess Brands, which had twice filed for bankruptcy, now plans to become a publicly-listed company valued at $2.3 billion.
"We like to think of ourselves as a billion-dollar startup," Hostess chief executive Bill Toler said Tuesday, announcing that Hostess Brands, which had twice filed for bankruptcy, now plans to become a publicly-listed company valued at $2.3 billion.
bloody 'ell mate they taste like cardboard now.
You do realise that the computer you're using is mostly made via automated processes, don't you? Are you going to boycott that as well?
If you're going to boycott everything that's made by a machine you're going to find yourself living in a cave and reverting to a hunter scavenger state.
Automation poses a lot of challenges for our society, but employing people just to give them something to do is not the answer. Personally I think we should reduce the standard working week by one hour per year until we reach a 20 hour standard week. That would allow society to adapt to the changes progressively over the period of a couple of decades while ensuring there are enough jobs for those who have been left unemployed due to automation.
Yep, it's better to have 22,000 laid off because they went out of business than it is to have 1,170 employed directly at Hostess, and others indirectly employed at the robot manufacturers, ingredient suppliers, shipping companies, distributors, packaging suppliers, insurance companies, and all the other entities that support a running business.
What's passed along is the cost of supporting the thousands of unemployed.
The old company went belly up, so those jobs were gone anyway. This is a new company and new hires, so nobody is "passing along" anything.
Even if that weren't the case and this had been accomplished by restructuring the old company, that's still good. Productivity gains are achieved by getting the same or more output using fewer resources.
And yet did any of the executives cut their salaries, stock options and bonuses to help out? How dare those greedy people in labor want living wages, that were probably 1/50th of what the CEO made, instead of being content living in poverty!
I don't get this attitude that Unions destroy everything, was management sitting on their hands. Looking into shenanigans of management.
The raises management gave themselves right before the bankruptcy
Brian Driscoll, CEO, around $750,000 to $2,550,000
Gary Wandschneider, EVP, $500,000 to $900,000
John Stewart, EVP, $400,000 to $700,000
David Loeser, EVP, $375,000 to $656,256
Kent Magill, EVP, $375,000 to $656,256
Richard Seban, EVP, $375,000 to $656,256
John Akeson, SVP, $300,000 to $480,000
Steven Birgfeld, SVP, $240,000 to $360,000
Martha Ross, SVP, $240,000 to $360,000
Rob Kissick, SVP, $182,000 to $273,008
Personal responsibility, capitalism edition: if you're succesful, it's your genius, if you're not, it's your employee's fault. Extra points if you imply those employees should work for free and are unethical if they don't.
As opposed to workers losing straight away so the management can keep getting their bonuses?
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
Let's assume you could cut 20 million out of executive salaries. Divide that by the 22,000 employees, and you end up with about $900 a piece. Realistically, you wouldn't be able to take that much from the executives. When the employees outnumber the executive by 10,000 to 1, it really doesn't matter how much you cut off executive pay, because the cost of the labour will vastly outweigh the cost of executive salaries.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
Let's assume they're all at the max. Total salary for that list is $6,351,508.
Now let's assume a "living wage" for factory workers of $35,000. That gives us $6,351,508 / $35,000 = 181 factory jobs.
You can complain about their salary, but where are you going to get the other $300,000,000 that was going to the 8500 workers who were laid off?
Management destroyed that company.
Nuh uh.
Axiom: unions are evil.
Therefore unions destroyed the company.
See?
SJW n. One who posts facts.
Shorter version: Management is bad and they get huge paychecks -- therefore, anything the union does is flawless and perfectly justified, regardless of the outcome. You can always justify anything by criticizing someone else.
Thanks for letting us know.
You do realize our unemployment rate (U3) is at 5%, right?
You might say, "but what about the people who are underemployed or who have dropped out of the labor force? They aren't counted, so the real unemployment rate is much much, higher."
That's measured, also. It's called U6, and it's at 10%. The lowest U6 has been in the last 40 years was 9%.
When Obama took office, 66+% of the US population worked.
Now, almost 8 years later, 62+% of the US population has a job.
Thanks, Obama.
I think you might want to reread that.
The unions made plenty of concessions over the years until near the end only to have the management take them, raise their own wages and then ask for them to be lowered more.
The Unions didn't negotiate themselves out of a job, the management mismanaged the company into the ground and now they are making it out of it by throwing those whom actually did their jobs under the bus while those who threw the company away are getting away with it.
The fact they were about to automate that much away should tell more people the direction the world is going and the reality they must wake up to. Where they can't expect everyone to work the jobs that don't exist at wages too low to live on and must transition to one where not everyone has to work to live a decent life. Or we can go the Elysium route.
I mean look at it,
The farmers professions are nowhere near as prevalent as they used to be and no longer considered "Real Work" unless you are the ones running the place,
Manufacturing professions are nowhere near as prevalent as they used to be and no longer considered "Real Work" for many and a growing level of them,
The service sector is shrinking due to automation and such and they aren't considered "Real Work" for the majority of them and is growing.
At this rate, we won't any hardly any "Real Jobs" left which a bunch of old fucks wondering why their kids can't get the jobs they used to have and instead of accepting the reality of the situations, they will just continue to lie to themselves and call them "Lazy" rather than accept the fact that their generation collectively threw their children under the bus.
The company went through 10 CEO's in 10 years!
If they tried 10 different CEOs, and none of them were able to fix the problem, then that would indicate that the CEO wasn't the issue. Then they got rid of the union (via Chapter 11), and now they are profitable.
>"The productivity gain is 18 times given the reduction in the number of employees given. I do not suppose that the current employees earn 18 times what the old employees earned. So who did get the benefit of the 18 fold increase in productivity? Answer me that you thieving bastards."
I don't think the actual numbers are 18 fold. It is far more complicated than that. But in any case, say it was a 9 fold increase overall.... the reason the company failed is they priced themselves out of the market. They couldn't afford to operate [the way they were] on what they were able to charge for what they marketed. Now, apparently they can. That is a good thing. And they can now afford to charge less to stimulate demand and re-establish a market. So that is lost revenue. Plus there is a great risk, they NEED to make a lot more money to pay for all the new machinery and setup. They can build reserves, invest in themselves, and spend on researching and creating new products to be diversified so they can continue to survive in the long term.
Simple capitalism.
There is absolutely nothing wrong with them making lots more profit than before. That should be the goal of ALL companies. If a competitor comes along (which should happen if there is enough demand in an elastic market), it will force the prices down.
Of course they don't. The old company WENT BANKRUPT at the rate they were paying for labor. The old ways don't work any more. If the new company paid the same total but just paid it to fewer people it would also not exist.
Who exactly are the thieving bastards you are referring to? The old management that did not invest in modern production methods and instead shut the place down? (resulting in all 22k jobs gone) Do you mean the new owners that put up their money to buy machines and make the business feasible? (resulting in at least some new jobs)
The only thieving bastards I see is the ones that expect to reap the rewards from other peoples investment. The ones that expect something for nothing.
I do not suppose that the current employees earn 18 times what the old employees earned.
Of course not. Productivity gains don't stay concentrated in one company, they are spread through society. Overall, American productivity has improved by a factor of 20 since the late 1800s. So has the average worker seen their standard of living improved by that much? Yes, mostly they have. Improvements in productivity not only improve living standards, they are the ONLY thing that improves living standards.
If you really feel otherwise, then you can go live in a country that has not seen productivity improvements. Somalia, Ethiopia, Congo, and Afghanistan are good choices. None of those have greedy rich people suppressing the workers by investing in capital to make them more productive.
Society has failed structurally to provide many with the opportunities and tools to keep a viable career path open for their working lifetime.
Why is it society's responsibility to teach you job skills? Society (by which you obviously mean the government) already gives everyone 13 years of education (K-12), and if you walk away from that with no job skill that can't be better done with a servo motor, that is your own fault. I don't think there will be a big revolutionary change if we change the schools to teach for, say, 13 and a half years. People that are willing to learn will continue to do well, and the rest won't.
When Obama took office, 66+% of the US population worked.
Now, almost 8 years later, 62+% of the US population has a job.
So it is Obama's fault that the baby boomers are retiring?
What 'skills' do you think a factory worker needs to keep up to date precisely?
Starting a business on the side that can eventually become a full-time business.
No. Those three states where the layoffs took place are all "right-to-work" states. Indiana, Kansas and Georgia.
You are welcome on my lawn.
So it's society's responsibility when it's a matter of deference to business friendliness, but it's the fault of individual when they can't second-guess the desires of employers?
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
You'll will note I started by indicting the individuals before I suggested society has failed. You are assuming by society I mean government. Government might be part of it but it isn't the whole of it.
The new economic reality for most people is you won't just not spend your whole career at the same company, you also won't do it working the same type of job. So yes have to continue to learn to do well, you have to be willing to take appropriate risks and exercise opportunities that come along. So why did these people not do that, why were they still aboard the sinking ship that was a bankrupt company when the doors closed?
Was that 13 years of government education not effective? I think we have to start there actually, my feeling is despite the fact there are a number of good dedicated teachers out there our 19th century education model isn't a good fit for the education requirements of today. I am not an expert in education so I don't have solutions but I can see that its broken. I also don't think just more and longer education is the answer either otherwise many people with 4 year degrees would not have been hit so hard. Maybe in fact primary and secondary school should be shorter and it should be normal to go to work for a time before higher education?
Has society come a part to the point where people can't get additional education. Do people not know and trust anyone enough around them to watch their kids for the evening so they can take a class? Have we broken up families, family units and the idea of familiar responsibility to the point people have no resources to turn to? Has the risk become to great, do people not have enough savings to risk taking a job that might not work out and having to find another? Why don't we having savings as a nation? Could it be the central bank keeps rates to low for two long? Have wages been flat because of to much regulation sucking profitability out? Do we now mandate individuals divert to much of there income to things that might not be appropriate for them like certain forms of insurance? Are we asking young people who should be building wealth early and as fast as possible so they can benefit form compounding to shoulder crushing tax burdens and provide subsidies to previous generations?
I am a conservative small government guy, many would label me radically so in fact. I am also not naive government is already big, and therefore the policies it makes have real consequences. Yes I would love to sign on to a plan of starve it until its small enough to fit in a bath tub so we can than drown it but we need to take some steps along the way. We need to identify what statist policy of the the last 60 years has broken in our society and stitch some of that back to together. We need to identify policy that does work so we don't throw the baby out with the bath. We need to look at how the economy has changed and make sure we are designing and offering solutions for 2016 and not 1976.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
Less than that, even. You forgot the 7+% for employer's part of FICA and Medicare. You forgot whatever unemployment insurance costs in the states of operation. You forgot whatever the employer's portion of various health insurance or other benefits. Taking the general rule of thumb that employer costs are 1.25 to 1.5 times the salary, That $6.3M is only 120 to 144 jobs at $35k- so significantly fewer than your estimate even.
I think most of the complaints about executive salaries aren't really because that money could be used to pay employees more or pay more employees, because those numbers don't really add up; I think the complaint is more just in order of magnitude - 10 times might be palatable, but someone making 100 times the salary of another means that person earns effectively an entire lifetime of the lower salary in a single year.
"There are a dozen opinions on a matter until you know the truth. Then there is only one." - CS Lewis (paraprhase)
You left out the third option.
1,100 jobs where saved by automation. Hostess went out of business and several other companies bought up the rights to the products that Hostess made.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
You can't say that for certain. Running machines requires skilled labor to maintain and program them. Pulling trays out of an oven all day doesn't. Programming and maintenance skills have a higher value, not to mention that the employee generates more revenue per hour than the manual laborer.
"Well, good luck finding a judge that doesn't run a bestiality site."
Another benefit not mentioned:
Now there are less humans stuck in a mundane dehumanizing job. Their Quality of Life will improve as they look for a more fulfilling job.
It sucks to be in the path of progress; that's why we have welfare. Unemployment is transitional, and it sucks to lose your job and wonder if you're going to spend 5 months or 5 years trying to find a new one; at the same time, unemployment tends to stay in the 4%-8% range, and 5% unemployment means either you or someone else is that guy wondering about where you're getting your next paycheck.
The difference is whether you stay in your comfortable seat and we all stay as poor as we are, or you get moved out of your comfortable seat and the other 95% of society enjoys growing wealth. The middle-class get to buy more toys (e.g. computers, cell phones, the things that made your programming job worth $144k/year in the first place); the poor get to eat more frequently, and maybe get access to medical care; you get to look for a new job, and a highly-wealthy society can supply better welfare to keep you from ending up as a beggar on the street with no job and no food while you do that. Probably less-good for you than not losing your job, but a lot better for everyone else at that moment, and better for *everyone* over time.
You would be wearing a loincloth and hunting in the wilderness right now, probably ill, with no healthcare and the constant uncertainty of where your next meal is coming from, if we didn't progress in this way. Your comfortable life today is built on the cycle of technical unemployment.
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