No more ding dongs!

[aforrest4]

I was always partial to Ho-Ho's!

[Disclaimer]

Yep, unions to blame

https://en.wikipedia.org/wiki/Hostess_Brands#Bankruptcy_and_liquidation_.282012.29

How much would you bend until you break?

Bankruptcy (2004)

On September 22, 2004, Interstate Bakeries filed for Chapter 11 bankruptcy. The company also named a new chief executive, Tony Alvarez. Interstate Bakery's stock, which had been at one time $34/share, fell to $2.05/share as they declared bankruptcy. At the time it was the longest bankruptcy in U.S. history. During bankruptcy, Interstate fought a 2007 bid from Mexican baked goods giant Grupo Bimbo and Ron Burkle of the Yucaipa Companies.[13]

With the leadership of Craig Jung, the company emerged from bankruptcy as a private company on February 3, 2009.[14] 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.[15]

During the 2004–2009 bankruptcy period, Interstate closed nine of its 54 bakeries and more than 300 outlet stores. Interstate's work force declined from 32,000 to 22,000 employees. The company also dropped some regional brands and operating agreements, such as the agreement to produce Sunbeam Bread for the northeastern U.S. (now produced by LePage Bakeries of Auburn, Maine).[15]

So, it couldn't compete in 2004 and yet, here we are in 2012 and it's the unions fault, after they made concessions back then for company equity because they believed it was worth it. The company also had the opportunity to sell itself to Bimbo and Yucaipa, but no. So there's the "fool me once"...

Bankruptcy and liquidation (2012)

By December 2011 it was reported that Hostess Brands was on the verge of filing for bankruptcy a second time after it suspended payments for union pensions and was struggling to remain current on its $700 million loan.[17]

On January 10, 2012, Hostess Brands filed for Chapter 11 Bankruptcy for the second time. In a statement in its filing, the company said it "is not competitive, primarily due to legacy pension and medical benefit obligations and restrictive work rules." The company said it employs 19,000 people and carries more than $860 million in debt. The company said it would continue to operate with $75 million debtor-in-possession financing from Monarch Alternative Capital, Silver Point Capital and other investors.[4]

...

In March 2012, Brian Driscoll resigned from his position as CEO.[20] Gregory Rayburn, who had been hired and named Chief Restructuring Officer only nine days earlier, assumed the leadership position. Fortune reported that unions within the organization had been unhappy with Driscoll's proposed compensation package of $1.5 million, plus cash incentives and a $1.95 million "long term compensation" package. Additionally, the court had discovered that Hostess executives had received raises of up to 80% the year prior. In an effort to restore relations, Rayburn cut the salaries of the four top Hostess executives to $1, to be restored on January 1 the following year.[21]

There's "fool me twice"

In July 2012, the New York Post reported that negotiations (lead by Silver Point Capital) with the Teamsters Union were close to a possible agreement that could allow Hostess Brands to cut employee pay and benefits, if the company maintained funding of existing pension plans.[22]

"Alright, we're trying to work with you here, we'll take a pay and benefit cut if you can at least guarantee the pension you've promised us"

In May, all 19,000 workers had been warned (as required by the Worker Adjustment and Retraining Notification Act) that they could face a mass layoff. In an email to the Appeal-Democrat Hostess spokesman Erik Halvorson said that the May notices were to alert employees to possible sale or wind down of the company, but that "our goal is still to emerge from bankruptcy as a growing company with a strong future."[23] These layoff notices listed the dates as July 7–21, but on July 5 another company spokesman told the Financial News & Daily Record that there were no immediate plans to start laying off Hostess employees.[24]

In November 2012, Hostess employees nationwide went on strike. The Bakery, Confectionery, Tobacco Workers and Grain Millers' International Union, which represents 6,600 Hostess employees, took the strike action after the latest contract proposal from Hostess Brands was rejected by 92 percent of its members.

Hmm... 92% of members rejected it. 92%. One might surmise there's some reason why an overwhelming majority said no... because 92% of the unionized workforce (over 5000 employees) are all lazy greedy scum? Not like the CEO with the $1.5M compensation package and other execs with the 80% raise... right? They all deserve it because they ran the company into bankruptcy, AGAIN.

In response, Hostess Brands issued the following statement: "A widespread strike will cause Hostess brands to liquidate if we are unable to produce or deliver products. If that's the case, the company will move promptly to lay off most of its 18,300-member workforce and focus on selling its assets to the highest bidders. We urge our employees to remain on the job to rebuild the company."[25]

On November 16, 2012, Hostess announced that it was ceasing plant operations and laying off most of its 18,500 employees. It stated that it intended to sell off all of its assets, including the well known brand names, and liquidate.[26][27] The CEO, Gregory F. Rayburn stated, "Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders."[28][29]

However, in order to actually liquidate, it needs the permission of U.S. Bankruptcy Court Judge Robert Drain.[30]

And that brings us to today...

Blame the unions all you want because it's their fault the CEOs signed up for contract they couldn't make good on... even after the unions tried to work with them and made concessions, only to find out the execs gave themselves raises on the way out the door... likely knowing the whole time that the company was nose-diving. They grabbed theirs while the getting was good and then left the unions holding the bag. Shame on those unions for wanting what's due to them.

Like I said, I only hope the banks would work with people who can't make their mortgages as much as the unions tried to... but I'm not holding my breath.

Edited November 17, 2012 by JRMMiii

[Pokey]

Not much "unity" in many unions these days.

[Scruit]

That ship was doomed for a while. It is a product that doesn't sell these days.

What the union did was equivalent to tying one arm on a man struggling to tread water. He was already in trouble, but the union's actions finished him off.

[Scruit]

I just read the statement directly to employees:

- They are all told to stay home unless already specifically told they are part of the wind-down.

- 401k pensions are safe

- Accrued, unused vacation time is gone

- FSA accounts can be claimed against for expenses incurred before termination date, the remaining balances are forfeit.

- No severance

- Unemployment is available for most folks, however they point out that in some states striking workers will be denied unemployment.

- Expense claims not yet paid are forfeit.

Those folks are fucked.

[Scruit]

The expense claims bit is bullshit' date=' but the reason I wanted a company credit card vs using my own. Been down that road before and had it crammed up my ass. Live and learn...[/quote']

This is what they say:

I have submitted expense claims that have not been paid. How do I get reimbursed?

We have requested that the Bankruptcy Court allow the use of our lenders’ cash collateral to pay valid expense claims, but there can be no assurance that the request will be granted.

http://hostessbrands.info/employee-faq/

[Tpoppa]

http://money.cnn.com/video/news/2012/11/16/n-hostess-ceo-twinkies.cnnmoney/index.html?iid=HP_LN

[aforrest4]

I have been around long enough to watch over and over.

There are times a Union is extremely beneficial.

Believe it or not, owners/upper mgmt can get a little greedy.

But when they are around too long, they almost always go too far.

They always require a little more, rarely will settle for less.

Eventually you have to give or it will take the company that is feeding you down.

If labor costs, benefits, and retirement packages are so high, it makes it so they can't compete in the market. Or if the market demand drops, they have to take less until the company finds a new product to compete with.

This is a perfect example.

[Disclaimer]

That reporter was horribly fishing for the anti-union sentiment. She almost should've just came out and told the CEO to say "It's the union's fault".

But I like how when something goes wrong "there's plenty of blame to go around", but when things go right its because the CEO and leadership was great despite the union (the people that actually MAKE the product).

[ReconRat]

I was always partial to Ho-Ho's!

Indeed, I will miss Ho-Ho's.

edit: crap, I liked zingers even better.

Edited November 19, 2012 by ReconRat

[Limenine9r]

The only ding dong we have now is the one in the white house

[ninjachic]

The only ding dong we have now is the one in the white house

+1

[Disclaimer]

Hmm... still the unions fault.

Don’t Worry, Hostess’ Top Executives Still Got Richer As Company Collapsed

http://gawker.com/5961444/dont-worry-hostess-top-executives-still-got-richer-as-company-collapsed

[Pokey]

The only ding dong we have now is the one in the white house

And a dangerous ding dong at that.

[nautical1]

Twinkies are selling on ebay now and someone just bought 50 twinkies for $350..

http://www.ebay.com/itm/Hostess-Twinkies-5-Boxes-of-10-Individually-Packaged-Sponge-Cakes-/190755863128?pt=LH_DefaultDomain_0&hash=item2c69ef7a58

[QuikAccord]

Holy crap that is nuts. I'll be right back. I need to run up to Kroger for some, er.... Cigarettes. Yeah, that's it. Cigarettes......

[ReconRat]

http://www.zerohedge.com/news/2012-11-16/hostess-liquidation-curious-cast-characters-twinkie-tumbles

Very good article to read.

"primarily because of burgeoning interest obligations"

Basically the lenders called it quits.

They would recover a good amount of the equity.

Everybody else takes a loss.

I did not know that a Mexican bakery firm owned all those name brands.

[nautical1]

Holy crap that is nuts. I'll be right back. I need to run up to Kroger for some, er.... Cigarettes. Yeah, that's it. Cigarettes......

Good luck. There aren't any boxes left on the shelves here locally.

[wht_scorpion]

I has a big sad because this means no more Zingers! I used to eat a pack of raspberry zingers everyday in my younger less health conscious days. They are still a weak spot on occasion.

Dude Im with you and snow balls just bought about 10 packs and 1 pack of chocolate filled Twinkies I know where I can get more a 1.00 a pack.

Edited November 18, 2012 by wht_scorpion

[ninjachic]

[Disclaimer]

OMG, the job creators' secret recipe is out... how will they ever create more jobs?

What's next recipes for Outback Bloomin' Onions? It'll go under next.

[ReconRat]

Way too late. It started with the Big Mac, and nearly anything worth duplicating has been figured out. Many of the websites are trying to sell a book, but with little effort the books can be found on the internet.

All hail the mighty internet

http://www.topsecretrecipes.com/Top-Secret-Recipes.html

http://www.secretrecipes.com/

And just for fun, here's the secret recipe for Coca-Cola. Accidentally discovered in an old newspaper photograph of one of the notebooks. Nobody ever realized that the photo was of the recipe. This recipe was probably after coca outlawed but before alcohol outlawed.

The recipe:

Fluid extract of Coca: 3 drams USP

Citric acid: 3 oz

Caffeine: 1 oz

Sugar: 30 (unclear quantity)

Water: 2.5 gal

Lime juice: 2 pints, 1 quart

Vanilla: 1 oz

Caramel: 1.5 oz or more for color

The secret 7X flavor (use 2 oz of flavor to 5 gals syrup):

Alcohol: 8 oz

Orange oil: 20 drops

Lemon oil: 30 drops

Nutmeg oil: 10 drops

Coriander: 5 drops

Neroli: 10 drops

Cinnamon: 10 drops

Edited November 18, 2012 by ReconRat

[ohiomike]

Capitalism is working in this instance. I don't see the issue' date=' honestly. Workers won't do the job for a little less to save the company. They're going out of business. They believe their labor is worth more than it is, and they're paying the price for it.

This should have happened with GM and Chrysler. Too bad it didn't.[/quote']

The parent company for Hostess has filed for bankruptcy a couple of times already in the 2000's. Both times the union took concessions. After the second bankruptcy the parent company was looking good, things were straightened out. But instead of taking monies and putting it back into the company they just let things run down. So this time they imposed an 8% cut in pay and a 20% increase in the employees share of health care costs. In a union factory an employer cannot just do things like that. There is a contract involved. So this time the bakers union said they had given enough and the company had not taken care of business, so even though the teamsters gave more concessions, the bakers union stood firm on the fact they had already give concessions 2 other times in the past 10 years.

I'm betting the Teamsters union knew the Bakers union was not going to give in so they could and still end up not giving away anything.

Imho the fault here should be born as much by the company as the union. Either way, its really too bad a company that has been in business since around 1927 would go out like this and 18,500 more people are out of work.

[OsuMj]

I'm going to throw this out there - the fear of having unions created in some places keeps them playing fair. I worked in a factory for about 6 months and they pretty much came out and said, we want to make sure that you're happy so that you don't form a union. That was the only reason, not because they want a happy healthy work environment, because they didn't have to deal with a union.

[ReconRat]

Their competition was doing it cheaper. Play the game or fold. Most workers I know have had pay cuts, no raises, no cost of living, along with increases in health care over the last three years. Not to mention modified pensions. Along with other changes like no over time, less personal days, no hiring, hiring part timers, etc. I wouldn't expect anyone to see anything different right now.

To think that it's possible to avoid that, is risking the loss of everything. And that's what they got. They made a mistake.