Twinkies/Ding Dongs GONE FOREVER !!!

[onan]

Straight from the Bakery, Confectionary, Tobacco Workers and Grain Millers Union talking points. The actual fact was that pension costs and plummeting sales were the hurdles Hostess had to find a way over. I love how the union tried to paint an inarguably changed food culture, in which Twinkies and Hostess's other baked goods had become the junk-food poster boy emblematic of obesity and poor health, as a result of poor management decisions. Twinkies themselves were painted by food activists as toxic, chemical-laden gut bombs, and it was an absolute humiliation among supposedly "health-conscious" persons to be found eating one. It's mere pretext for the union to claim that a failure to modernize the factories destroyed the company: Hostess couldn't sell it's product. Between direct competition from companies which were able to undersell Hostess because they didn't have the labor costs Hostess did, and the changing food culture, Hostess's sales fell something like 28% between 2004 and 2010. That's huge, and it demands drastic cutbacks.

And Hostess's pension costs were enormous. (The top 11 debtors which Hostess owed in its bankruptcy were pension funds.)

And those "management raises"? Those were preliminary proposals, of which almost none actually happened. In fact, the salaries of the top 4 men in the company were reduced to $1 per year. Besides, what is it about management costs that magically makes every $1 spent on management salaries somehow the equivalent of $1,000 in labor salaries and pension contributions? Management costs are a drop in the bucket compared to labor. What the union's real gripe was, "No fair! He got more than I did!".

Labor wanted choices which were not and could not be on the table. My whole point is that whether or not it felt "fair", or whether or not they felt like they had already given enough, it didn't matter: the only choice was concede or die. Labor was presented with a starkly evident choice: to make the changes and take less, or go without anything at all. In the end they acted like adolescents who were unable to get over "unfairness". And their jobs died. It's simply irresponsible.

“As the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.”

...although some of the accusations are true. As the Bakers Union says, the Wall Street Journal reports that in July 2011, top executives received a 75 to 80 percent pay increase. What makes this executive pay raise so ridiculous is that two months prior to this Hostess posted a $341 million net loss from a recorded net revenue of about $2.5 billion.

the multi-million dollar CEO Brian Driscoll disappeared from the scene in March of 2012. When Greg Rayburn became Hostess’ sixth CEO in a decade he was considered a company turnaround expert. Rayburn quickly reduced those same executives’ salaries to one dollar a year, which included his own pay of $125,000. He did this to combat Hostess’ $860 million debt load and the $2 billion in unfunded pension liabilities to various unions’ workers.

I would suggest that management was so far down the hole that the one dollar salary was too little too late.


This may have had a great deal to do with going down the hole:

What killed Hostess in the end is pure business math. The tastes of Americans have slowly been getting healthier, with companies like Coke only maintaining their market lead because of diet products like the Diet Coke. Other companies have responded to this change, while Hostess did not. According to Forbes, Hostess lost $341 million last year.

http://articles.kwch.com/2012-11-20/hostess-brands_35241695

http://dealbook.nytimes.com/2012/11/19/private-equity-and-hostess-stumbling-together/

http://dealbook.nytimes.com/2012/01/11/hostess-files-for-bankruptcy/

http://www.inquisitr.com/409386/hostess-jobs-democratic-bakery-union-blamed-for-demise-of-twinkies/

[Flaxen Hegemony]

I wonder if there is a single food product in a Twinkie. A touch of wheat to go with the sawdust? Maybe a little actual sugar, although a chemically unusual sugar at that?

Ive always suspected that a Twinkie assembly line was only a few machine conversions away from producing discarding sabot rounds for the military.

[MV/Liberace!]

Ive always suspected that a Twinkie assembly line was only a few machine conversions away from producing discarding sabot rounds for the military.

heh heh, awesome.


edit:  and by the way... i get the whole "changing health perceptions" affecting hostess' business... but those types of trends happen over the course of years.  what was hostess doing... signing a new labor contract once every 20 years or something?  they couldn't see any trends to indicate they needed to address these matters during the next round of contract negotiations?  the whole thing just sounds like really stupid, sloppy business to me. 

[PB the Deplorable]

I would like to encourage people not to purchase the new Twinkies that have been reintroduced to the market. I view their reintroduction as nothing more than a big fat union busting operation...

The brand was sold to an unrelated company.  One that had nothing to do with the previous fiasco.   Do we even know that it's non-unionized, or what the workers make, or make compared to the previous companies' employees?

[MV/Liberace!]

The brand was sold to an unrelated company.  One that had nothing to do with the previous fiasco.

I know. I'm just saying that when you boil this situation down, here we have the same product being produced by workers who probably are being paid a fraction of what once was.

This declining American standard of living we're surrounded by is frightening to witness.

[Sardondi]

I would suggest that management was so far down the hole that the one dollar salary was too little too late.....

I think that's quite possible. I also think it's a case when reference must be made to that movie masterpiece, Big Jake, in which a malevolent Richard Boone as the antagonist, symbolizing Death and Nothingness, posits "Big Jake", who is seen here as the Id of Everyman, thusly: "Your fault, my fault, nobody's fault, it don't matter: the kid gets it." In that existential scream we see the same relative positions and the inherent difficulty of the Hostess parties.

But assuming more blame was rightly on management, how does it change the fact that the everyone, labor and management, wound up unemployed because of labor's decisions? And how can it not be seen as self-destructive? Management told them, "Your fault, our fault, nobody's fault: if you reject this deal the factory is dead and gone."

I just think the union paid an exorbitantly high price for pride. 

[MV/Liberace!]

Management told them, "Your fault, our fault, nobody's fault: if you reject this deal the factory is dead and gone."

I just think the union paid an exorbitantly high price for pride.

i think perhaps labor simply didn't believe what management was telling them.  there could be a history behind this of which we aren't aware.  or not.  i just don't know.

[PB the Deplorable]

i think perhaps labor simply didn't believe what management was telling them.  there could be a history behind this of which we aren't aware.  or not.  i just don't know.

The union has other workers in other companies.  Take a hard line here that costs jobs, but it sends the word out to other employers in other locations when it's their turn to negotiate a contract.

Unions are run for the benefit of union management, the same way corporations are run for the benefit of corporate management and government agencies are run for the benefit of the management at those agencies.  And the hell with everyone else.

[MV/Liberace!]

Unions are run for the benefit of union management, the same way corporations are run for the benefit of corporate management and government agencies are run for the benefit of the management at those agencies.  And the hell with everyone else.

i don't necessarily disagree with what you said above, as there are definite real life examples with which you could make your case... but when i was a union worker, i had great pay and great benefits... far better than i would have had at a non-union shop performing the same work. 


i just don't see unions as a black/white matter as some of you do.  sometimes labor organization is necessary.  a great place to start would be walmart.  if it means i'd spend an average of $5 more to shop there (which, supposedly, really is the dollar amount), that's fine by me.  at least it means the guy stocking the shelves might be more capable of feeding himself rather than going on government benefits to further expand THAT arm of the government.

[PB the Deplorable]

i don't necessarily disagree with what you said above, as there are definite real life examples with which you could make your case... but when i was a union worker, i had great pay and great benefits... far better than i would have had at a non-union shop performing the same work..

I should have added that top management at corps, unions, and govt agencies range from excellent to criminal.  A lot of the time they do the people that rely on them well at the same time they are getting theirs.  What's funny though is when they all start accusing each other - and everyone else - of being greedy.

[Jackpine Savage]

I know. I'm just saying that when you boil this situation down, here we have the same product being produced by workers who probably are being paid a fraction of what once was.

This declining American standard of living we're surrounded by is frightening to witness.

COuld be worse, could be making them in china.

[ItsOver]

Yum...lead-filled Twinkies!