Speakeasy forum

General discussion

Hostess Scares Hell Outa Unions.

by James Denison / November 16, 2012 12:47 AM PST
Union Strikes, Hostess Decides to Shut Down, sell off brands. No more Twinkies, No more Wonder Bread.

"Hostess, the maker of Twinkies and Wonder Bread, plans to go out of
business, lay off its 18,500 workers and sell its snack cake and bread
The Irving, Texas, company said a nationwide
strike crippled its ability to make and deliver its products, which also
include Ding Dongs, Ho Ho's and Home Pride bread.
Hostess suspended bakery operations at all its
factories and said its stores will remain open for several days to sell
already-baked products.

Hostess said Friday the company is unprofitable "under its current cost
structure, much of which is determined by union wages and pension

A union representative did not immediately return a call from The
Associated Press seeking comment on the company's announcement.

That should put unions on notice that now is NOT a good time to strike or seek new wage concessions and other commitments.

"Yes Virginia, When you ask for too many gifts, Santa Clause can go out of business. Would you like this lump of coal? But remember, Obama also hates coal, so hide it carefully."
Post a reply
Discussion is locked
You are posting a reply to: Hostess Scares Hell Outa Unions.
The posting of advertisements, profanity, or personal attacks is prohibited. Please refer to our CNET Forums policies for details. All submitted content is subject to our Terms of Use.
Track this discussion and email me when there are updates

If you're asking for technical help, please be sure to include all your system info, including operating system, model number, and any other specifics related to the problem. Also please exercise your best judgment when posting in the forums--revealing personal information such as your e-mail address, telephone number, and address is not recommended.

You are reporting the following post: Hostess Scares Hell Outa Unions.
This post has been flagged and will be reviewed by our staff. Thank you for helping us maintain CNET's great community.
Sorry, there was a problem flagging this post. Please try again now or at a later time.
If you believe this post is offensive or violates the CNET Forums' Usage policies, you can report it below (this will not automatically remove the post). Once reported, our moderators will be notified and the post will be reviewed.
Collapse -
by TONI H / November 16, 2012 1:08 AM PST

the way the labor laws are written, if another buyer comes along that wants to be in the same business and use the equipment in the same manner at the same factories, the new owners will 'inherit' the union along with the business. The only way to successfully get rid of the union is to sell everything off individually and walk away and have the factories remain empty or be utilized in another industry.

Collapse -
Isn't that ridiculous?
by James Denison / November 16, 2012 2:25 AM PST
In reply to: Unfortunately

It's like the workers have partial ownership without the investment. That's the worst thing about all of Obama's bailouts, protecting the Unions while shafting the investors. Now it's time for investors to give Obama the shaft, LOL!

Collapse -
I just saw a comment
by TONI H / November 16, 2012 3:16 AM PST
In reply to: Isn't that ridiculous?

on Fox about this and evidently any new owner that wants to take over the same business, if that owner already has his own bakers, he can bring them in without the union and keep the previous bakers laid off. From what I heard a deal was offered to all of the workers from Hostess and all of the workers except the bakers' union accepted the deal, so the bakers are the ones that put the final nail in everyone's coffin. Greed 'wins' out again........

Collapse -
How the unions killed off hostess
by James Denison / November 16, 2012 3:23 AM PST
In reply to: I just saw a comment
Collapse -
How many Twinkies have you killed? I've killed a few.
by JP Bill / November 16, 2012 3:36 AM PST

Don't care if i ever kill another one Devil

Collapse -
your own link seems to split the blame
by Roger NC / November 16, 2012 7:46 AM PST

between the baker's union and the hedge funds.

Since distressed value funds, vulture funds, look for companies they think cheaper than the value, they normaly pay fractions of what the company should be worth to gain control. It's also quite common after this happens for companies to be sold off in pieces, both product rights and physical assests

I haven't seen the numbers yet on what the concession to benefits and pensions were and what the cost of both unions and management salaries and benefits are.

Collapse -
the hedge funds
by James Denison / November 17, 2012 2:38 AM PST

They are losers too. Losing investment, but they would like to get something back from it before nothing is left. There's no winners in this, other than maybe the lawyers.

Collapse -
sure they lose
by Roger NC / November 17, 2012 2:52 AM PST
In reply to: the hedge funds

but they are professionals at assessing risk vs profit, at least supposely so.

This particular fund was known as one for buying companies currently under stress for less than their asset values.

Collapse -
I looked into it
by James Denison / November 17, 2012 2:58 AM PST
In reply to: sure they lose

and if a few years ago they might have come out ahead on selling off real estate in a climbing market, but there's not even that now. They will be losers. In fact, the smart move would be to find other commercial bakeries with union troubles and short their stock.

Collapse -
(NT) What's the brand name and recognition sell for you think?
by Roger NC / November 17, 2012 9:28 AM PST
In reply to: I looked into it
Collapse -
I don't know
by James Denison / November 17, 2012 11:15 AM PST

Millions for sure.

Collapse -
(NT) So they still may profit, even closing the company
by Roger NC / November 17, 2012 12:16 PM PST
In reply to: I don't know
Collapse -
Do you realize how deep in the hole
by James Denison / November 17, 2012 2:12 PM PST

these hedge funds are? When I looked there were 3 of them and one is basically broke from this, the other two still have some skin they can claim from it, but there is NO WAY they will get back their investment, and certainly not more than their investment.

Collapse -
Here's a good article on it.
by James Denison / November 17, 2012 2:29 PM PST
You can have fun blaming the Democrats, LOL.

"....in 2007 Ripplewood acquired Reader's Digest -- and saw its $275 million investment vanish in Reader's Digest's bankruptcy filing in 2009. (Collins reportedly had visions of merging Reader's Digest with the magazine division of Time Warner (TWX), which owns Fortune.)
Tim Collins, CEO of Ripplewood Holdings
Ripplewood's foray into Hostess was partly enabled by Collins's
connections in the Democratic Party. He wanted to explore deals with
union-involved companies and sought the help of former congressman
Gephardt, who in 2005 founded the Gephardt Group, an Atlanta consulting
firm that provides "labor advisory services." In his 2004 presidential
bid, Gephardt -- whose father was a Teamsters milk truck driver -- was
endorsed by 21 of the largest U.S. labor unions; in 2003, Collins was
one of 19 "founding members" of Gephardt's New York State leadership
committee. (Today, Ripplewood and Hostess are listed online as major
clients of Gephardt's consulting group, which is also an equity owner of
Hostess.) Back when Hostess was coming out of the first bankruptcy,
Gephardt's credibility with both Ripplewood and the Teamsters gave them
each a little more room to break bread."
Collapse -
From that article
by James Denison / November 17, 2012 2:39 PM PST

Since you seem so concerned funds might actually get some money back, and seem even worried they might come out ahead on this;

"Right now, according to sources with knowledge of Hostess's debt structure, Silver Point and Monarch each hold Hostess obligations with a market value of between $50 million and $100 million. Those sources also say each hedge fund probably paid somewhere between $125 million and $175 million for that debt. So even with losses to date, both hedge funds have ample skin in the game -- skin they'd like to get out of the game sooner rather than later"

There are no winners here.

Collapse -
don't misunderstand,
by Roger NC / November 17, 2012 11:19 PM PST
In reply to: I looked into it

I'm not saying that it's good the funds are losing money, that's not good for the economy in general.

It's just that so often these funds make money by buying a company, squeezing it, and then selling off the pieces. Your references indicate otherwise in this case, if that's all the facts. If so, the investors may have done a poor job of evaluating the company.

I've never said the baker's union was right to shut the company down, we know that wasn' the actual intent. I don't think even you would assign that motivation. The union misjudged too evidently as to what they could ask and the company still make money. I stated to begin with I didn't know enough to judge the sensibility of the strike.

The union's job isn't to bankrupt the owners, it's to protect it's workers from exploitation and to help make a decent living.

One statement said the cuts in benifits and rise in employee cost of health insurance the wages dropped to minimum wage. Of course, they still had health coverage. Depending on how good or bad the coverage was that's important today. I'd bet someone felt that the concessions asked of the unions was just to make it more lucrative for someone else, perhaps ridiculously so. It would seem that was a bad read.

A bad decision on both the investment firms when they evaluated the company and of the union as to the reality of the company finances I guess.

The difference is you believe workers are nothing but labor, biological machines, to be used and discarded at will with not a whit of consideration. Over and over you've made it clear to you labor, even skill labor, is just a tool, to be bought at the cheapest price, used up, and replace whenever it can be gotten cheaper, like buying all your goods made in China.

Collapse -
re deep in the hole further down
by Roger NC / November 17, 2012 2:28 PM PST
In reply to: the hedge funds

So one company invested so much of itself into one investment that this bankruptcy will bankrupt it? More than one questionable choice here then.

As far as not getting back more than their investment, if they do actually get back their original you might consider them lucky. They made a risk evaluation and the company failed, breaking even would be a break for them.

Now I realze next is the claim the business didn't make money only because of unreasonable greed by the baker's union. Even anyone that believes that's the only cause, shouldn't this type of risk assessment included an evaluation of how the union relations would likely affect futures, so that's part of the bet. I would think since this was not the first round of concession demands in the last few years that labor problems would have been expected. Probably that contributed to a fire sale price the investment company salivated over how much they were going to get out of this company's cash flow problems.

Collapse -
Don't know that's universal
by Roger NC / November 16, 2012 7:42 AM PST
In reply to: Unfortunately

as I understand it, that has to be in the contract. So if the contract has expired, that may not apply.

Of course that may be different a closed shop state vs an open shop or right to work state.

Collapse -
Don't worry, they'll be gone soon enough
by TONI H / November 16, 2012 3:32 AM PST

As for MO.......she must be eating something pretty rich herself, even with her war on food, because she's no lightweight like Nancy Reagan or Laura Bush. I'm suspecting she raids the fridge while sleepwalking.......

Collapse -
I hear Ya'
by JP Bill / November 16, 2012 3:40 AM PST

Michelle...Yeah...She's a real TUB.

I heard they had to reinforce the beds and chairs in the White House she's so heavy, and widen the doorways..

yeah...THAT'S what they had to do.

Collapse -
She's so pumped up
by TONI H / November 16, 2012 3:43 AM PST
In reply to: I hear Ya'

I heard they put in a sparring ring in the basement for her so she could keep that upper body build.

Collapse -
Good they'll have something to fall back on in 4 years
by JP Bill / November 16, 2012 4:14 AM PST
In reply to: She's so pumped up

She can go on MMA and Barack can be her manager.

Collapse -
I remember Barbara Bush.
by grimgraphix / November 16, 2012 8:51 AM PST

She was no lightweight, either.

Collapse -
(NT) She didn't try to control our food either
by TONI H / November 16, 2012 6:38 PM PST
Collapse -
She also didn't have a sparring ring in the WH.
by JP Bill / November 16, 2012 7:26 PM PST

I CAN picture it though...Barb working out on a heavy bag.

Collapse -
you sound like a child.
by grimgraphix / November 18, 2012 4:04 AM PST

The founding Fathers were not concerned about the Freedom to eat Garbage Food. Being resentful because someone is telling you to eat healthy food rather than candy and cake and soda pop is childish.

Grow up.

Collapse -
Telling me is one thing....
by TONI H / November 18, 2012 4:49 AM PST

forcing it on me is another...........

Collapse -
Is it being forced on you or your kids, grandkids?
by JP Bill / November 18, 2012 5:05 AM PST

Perhaps it's saving the kids, grandkids FROM their relatives.

Collapse -
Unless the government
by TONI H / November 18, 2012 6:27 AM PST

can bring charges against me for abuse or neglect, there is nothing to save them from.

Popular Forums
Computer Help 49,613 discussions
Computer Newbies 10,349 discussions
Laptops 19,436 discussions
Security 30,426 discussions
TVs & Home Theaters 20,308 discussions
Windows 10 360 discussions
Phones 15,802 discussions
Windows 7 7,351 discussions
Networking & Wireless 14,641 discussions


Free trip to the Grand Prix

Don't miss your chance to win a trip to the Formula 1 Grand Prix in Monaco for you and a plus-one.