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No more Twinkies????

Re: No more Twinkies????

Here is a very good story about the "behind the scenes" details with Hostess and bankruptcy case. While superficially it appears that the bakers' union triggered the problem, it seems as if the real problem was with the Teamsters' Union's refusal to modify work rules:

Under the latest turnaround plan, the sticking point was Hostess's distribution operations, source of the Hostess horror stories filling the media. Union-imposed work rules stopped drivers from helping to load their trucks. A separate worker, arriving at the store in a separate vehicle, had to be employed to shift goods from a storage area to a retailer's shelf. Wonder Bread and Twinkies couldn't ride on the same truck.

Hostess has spent eight of the past 11 years in bankruptcy. [emphasis added] As the company explained to its latest judge, the Hostess brands "have not been able to profit from many of their existing delivery stops and have been unable to enter potentially profitable markets, such as dollar stores, vending services and movie theaters."

If Hostess were able to rationalize or outsource delivery to serve these customers, ready to go are "new products based on its best-selling cake items that have a longer shelf-life and can withstand freezing en route to customers over longer transportation hauls."

....

[G]iven the circumstances that actually exist, the bakers might well prefer to hold back further concessions, let the company liquidate, and try their luck with a new owner or owners who might materialize for its bakery operations.

These new owners presumably would be in a position to invest cash in marketing and promotion (which Hostess hasn't done in a decade). They would benefit from the deluge in free media that has befallen the Twinkies brand this week.

All the more so given that Hostess plans to close or sell some of the bakery plants anyway, that unemployment benefits are generous, that bakery jobs have become crummy-paying thanks to previous givebacks, that the government-run Pension Benefit Guaranty Corp. will be assuming the Hostess pensions in any case....
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Re: No more Twinkies????

FreshFish said:
Here is a very good story about the "behind the scenes" details with Hostess and bankruptcy case. While superficially it appears that the bakers' union triggered the problem, it seems as if the real problem was with the Teamsters' Union's refusal to modify work rules:
Click to expand...

Just curious...how much of the blame goes to the Job Creators that responded to the impending bankruptcy by jacking up their own salaries and stopping payment to the pension to the tune of $160M?

533829_10151146995187773_439907222_n.jpg
 
Re: No more Twinkies????

If that's true, that's ridiculous. But, I would like to see some sources before I believe a fancy picture on the internet.
 
Re: No more Twinkies????

After just reading this page, I think we should start a new comic book superhero series: Captain Fingerpoint! :p
 
Re: No more Twinkies????

Holman Jenkins has an excellent summary of the overall situation in today's Wall St. Journal:

Everything about Hostess is valuable to someone as long as they can shed the Teamsters' Union restrictions on loading and delivering the wares to get them from bakery to customer. The only way to do that is to sell off all but one part of Hostess to other buyers, and close down the delivery system.

[O]ne of the major parties to the Twinkie bankruptcy, the bakery union, has been unstinting in explaining the company’s trouble in written and spoken word to anyone who wants to listen. The Hostess brands are valuable. The Hostess bakery and packaging operations are reasonably competitive and efficient, and while some reorganization and downsizing are inevitable, these properties are still worth owning.

Hostess’s problem, as the bakers point out in bankruptcy filings printed in legible English, and as Hostess management has pointed out in its own equally readable filings, is that Hostess’s valuable parts are held back by Hostess’s high-cost, Teamster-staffed system for moving Twinkies and other delights from production facility to store shelf. [emphasis added]

This high-cost distribution system means the company doesn’t make money on many of its existing sales. It means it can’t profitably extend sales to new customers and new geographical markets that might keep Hostess factories busier than ever.

Now, as we said, a good bet is that people act rationally where their material interests are concerned. The bakers make a perfectly rational judgment, in rejecting further concessions and triggering the liquidation of Hostess, that their members would be better off if no longer wedded to Hostess’s Teamster-dominated delivery network.

The Teamsters, who swallowed hard and agreed to concessions in hopes of avoiding liquidation, are telling you something too. The Teamsters are telling you, quite rationally, that nothing of value would likely remain in the Hostess distribution system in a liquidation. Look at the buyers lining up for the Hostess brands, such as Tastykake owner Flower Foods and the investment fund that owns Pabst Blue Ribbon, who slaver after an opportunity to roll Twinkies and related indulgences into their own existing delivery networks. They slaver after Hostess’s distribution operations not at all.
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Re: No more Twinkies????

FreshFish said:
Holman Jenkins has an excellent summary of the overall situation in today's Wall St. Journal:

Everything about Hostess is valuable to someone as long as they can shed the Teamsters' Union restrictions on loading and delivering the wares to get them from bakery to customer. The only way to do that is to sell off all but one part of Hostess to other buyers, and close down the delivery system.
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You're so cute. Trying to act like the Wall Street Journal is a credible, unbiased source of information.
 
Re: No more Twinkies????

Priceless said:
Just curious...how much of the blame goes to the Job Creators that responded to the impending bankruptcy by jacking up their own salaries and stopping payment to the pension to the tune of $160M?

533829_10151146995187773_439907222_n.jpg
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$20 per hour x 2000 hours per year x 18,000 bakers x 8% = $57,800,000, not to mention the benefits cuts. So let's say that Hostess had a $100M problem, ballpark. The total value of the executive raises (per Snopes) was $3.8M.

So while it is obnoxious that they got those raises, the raises are not the reason the company went bankrupt.
 
Re: No more Twinkies????

FlagDUDE08 said:
You're so cute. Trying to act like an internet picture is a credible, unbiased source of information.
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If you click the link provided you would see the sourcing for the facts presented in the picture.

LynahFan said:
$20 per hour x 2000 hours per year x 18,000 bakers x 8% = $57,800,000, not to mention the benefits cuts. So let's say that Hostess had a $100M problem, ballpark. The total value of the executive raises (per Snopes) was $3.8M.
So while it is obnoxious that they got those raises, the raises are not the reason the company went bankrupt.
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And if your boss stopped paying into your retirement to the tune of $160B I'm sure you'd be fine with that.

The union already agreed to concessions up the wazoo and the company still cratered. Exactly how much do you think workers should give up? Should they work for free? For minimum wage? How much is enough for management?
 
Re: No more Twinkies????

Priceless said:
If you click the link provided you would see the sourcing for the facts presented in the picture.



And if your boss stopped paying into your retirement to the tune of $160B I'm sure you'd be fine with that.

The union already agreed to concessions up the wazoo and the company still cratered. Exactly how much do you think workers should give up? Should they work for free? For minimum wage? How much is enough for management?
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Well, people with a lot more knowledge of the situation than I have worked out that the cut would need to be from $20 to $18.40 per hour. Not exactly "free" or "minimum wage," Mr. Hyperbole.
 
Re: No more Twinkies????

LynahFan said:
Well, people with a lot more knowledge of the situation than I have worked out that the cut would need to be from $20 to $18.40 per hour. Not exactly "free" or "minimum wage," Mr. Hyperbole.
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So $4.6M would solve their problems? And how much did the executives drain out of the company?

Their word is as solid as the creme filling of a Twinkee. They have promised numerous times that if the union just gave them a little more the company would be fine. So, how much would it be next year? Oh, and that money that's due in the retirement fund? I suppose we just write that off?
 
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