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Apocalypse Rising…
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The truth is much farther than what you stated, it’s not even funny.
Can you please elaborate?
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WE MUST BUY THE REMAINING TWINKIES!
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Hell, your own article gives far more detail, yet you focused on what you wanted to believe.
SIGH>>>
You mean not forking over 8% of wages to pay for part of their pension plan?
Or perhaps the fact that the Union didn’t want to contribute to paying any portion of medical care?
[edited by GG] OH and i know going out of business is very greedy. Funny post BTW…
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Twinkies. Never forget.
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My wal-mart doesn’t sell twinkies…
In fact, neither does my 7-11, petrocan, mac’s, Thrifty’s, London Drugs, or Save on Foods.
I’m totally &(#*%().
I went home with Hostess Vanilla cup-cakes… bunch of B.S… Twinkies are an American thing I guess :S
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They filed for chapter 11. That doesn’t mean they will disappear. Either the company will restructure in order to pay off its debt or they will file for full bankruptcy in which case some other company like Frito-Lay will buy up their assets, like factories, recipes and the extremely valuable Brand name.
@IL: Who is your typist? Because I find it astounding that you prove again and again that you are completely incapable of reading bust still manage to toll the pages and annoy as many people as possible by posting your completely inane thoughts.
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They filed for chapter 11. That doesn’t mean they will disappear. Either the company will restructure in order to pay off its debt or they will file for full bankruptcy in which case some other company like Frito-Lay will buy up their assets, like factories, recipes and the extremely valuable Brand name.
@IL: Who is your typist? Because I find it astounding that you prove again and again that you are completely incapable of reading bust still manage to toll the pages and annoy as many people as possible by posting your completely inane thoughts. Â
bust still manage to toll?
:P
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bust still manage to toll the pages
I charge them $10 each. And they pay. Sorry you don’t understand.
The Union refused to agree to have employees pay 8% toward their own pension plan and a portion of wages for their own health care. They WERE lucky to even have a pension where they didn’t pay anything. Now they join the other 99% who help pay into their own pension.
“the company had been contributing $100 million a year in pension costs. The new contract offer would�ve slashed that to $25 million a year, in addition to wage cuts and a 17 percent reduction in health benefits.”
According to the radio, it was 8% additional pension contribution. Some articles say they had a 8% pay reduction, but this is really money going into their pensions.
I hope to annoy you with truth… And charge you a toll for it.
Oh and another fun factoid is the smaller bakers union of about 4,400 voted in majority to close the company rather than see any concessions. The other 14,000 get stuck with that decision. The case of a smaller union effecting the larger one. Nice touch.
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I’m not going to completely blame the unions…I WILL blame them, but all parties involved are to blame. This is a top to bottom failure of the company, which is really sad. This was the same state of affairs GM was in a couple years ago with complete failure on all ends…although, they aren’t completely out of trouble yet because they are bleeding/hemoraging money overseas at an alarming rate. I’m sure companies will buy bits and parts of their operations, and some people will be able to get a similar job for like Little Debbie or another Bread company. In the end though, figure in that 90% of those people will not be retained by any company that buys the pieces and will be looking for a job rather than presents this holiday season.
Maybe they can open a sweatshop out here in Asia and produce at Apple-like factory! By the way, there are NO MORE Twinkies out here in Japan… :(
Never forget…
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Well some have can blamed management, but those executive increases aren’t gonna be paid in any case.
Reminds me of when Reagan fired the traffic controllers union. What an awesome day that was!
The economy can’t afford these benefits and practically nobody gets so many benefits…especially making bakery goods. No wonder why generations of people worked for them. They knew a good thing when they saw it.
“Many production workers earned up to $20 an hour, plus had access to medical benefits,”
“Trucking is a higher paying field, offering a national average of $22 an hour. Including base pay and commission, Hostess Teamsters workers could have earned between $50,000 to $100,000 a year, said O’Brien”
100K for delivering zinger’s? Oh boy. not a sustainable business IMO.
They filed for chapter 11, but ANOTHER company will buy the assets, minus the damm Union and rehire them at sustainable wages and benefits. That will teach them.
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@Imperious:
Well some have can blamed management, but those executive increases aren’t gonna be paid in any case.
Reminds me of when Reagan fired the traffic controllers union. What an awesome day that was!
The economy can’t afford these benefits and practically nobody gets so many benefits…especially making bakery goods. No wonder why generations of people worked for them. They knew a good thing when they saw it.
“Many production workers earned up to $20 an hour, plus had access to medical benefits,”
“Trucking is a higher paying field, offering a national average of $22 an hour. Including base pay and commission, Hostess Teamsters workers could have earned between $50,000 to $100,000 a year, said O’Brien”
100K for delivering zinger’s? Oh boy. not a sustainable business IMO.
They filed for chapter 11, but ANOTHER company will buy the assets, minus the damm Union and rehire them at sustainable wages and benefits. That will teach them.
I completely agree with you. I’m very anti-union and believe that many of these unions have outlived their purposes. Not that I wouldn’t mind delivering Zingers for 100K, but I agree that it is a bad company model. I wasn’t really old enough/self aware of the politics in the 80’s at the time, but have heard numerous stories of the day Reagan fired the union.
I hate when teachers strike too, but I’ll save that for another day.
I know of businesses that were flailing, but I didn’t think Hostess was one of those. I sure expected to see JCP, Best Buy, Sears, and American Airlines fold here in the near future, not Hostess.
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Right. In some cases Unions are needed. But our nation is facing a crisis where business cannot compete globally with high labor costs. This is especially acute in the internet age where you can order anything from anywhere and shop for price. Just look at the airlines. Southwest nearly every year has the best prices, service, and safety records. They don’t have any unions but still pay fair wages. Delta and American airlines typically struggle just to stay afloat.
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They filed for chapter 11. That doesn’t mean they will disappear. Either the company will restructure in order to pay off its debt or they will file for full bankruptcy in which case some other company like Frito-Lay will buy up their assets, like factories, recipes and the extremely valuable Brand name.
@IL: Who is your typist? Because I find it astounding that you prove again and again that you are completely incapable of reading bust still manage to toll the pages and annoy as many people as possible by posting your completely inane thoughts. Â
bust still manage to toll?
:P
Ooooh damnit! Nothing takes the wind out of a seething insult like an embarrassing spelling error. :oops: :-)
Guess I’ll dial it back. Or proofread next time….
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@Imperious:
Right. In some cases Unions are needed. But our nation is facing a crisis where business cannot compete globally with high labor costs. This is especially acute in the internet age where you can order anything from anywhere and shop for price. Just look at the airlines. Southwest nearly every year has the best prices, service, and safety records. They don’t have any unions but still pay fair wages. Delta and American airlines typically struggle just to stay afloat.
Agreed.
Unions have their place. But labour is so mobile and these days that as long as an industry is competitive and the economy is running at somewhere near full-employment (ie: 6-7% unemployment rate) then employers will be forced to pay workers roughly their marginal productivity simply to avoid defections. The best thing for labour is just to have a properly functioning economy where few firms can exercise market power. If a union bogs down a company and the company goes bust, that’s just natural selection man.It should be said though that not all unions are in a constant war with employers and sometimes a union is a mutually beneficial relationship to make between employers and employees.
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Nothing takes the wind out of a seething insult like an embarrassing spelling error.
It was not an insult/error. I thought it was one of your typical sketch comedy posts. Certainly nothing that anybody would characterize as “seething”.
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@Imperious:
"the company had been contributing $100 million a year in pension costs.
The operative words here being “had been”. For the last year or so, the company was deducting pension obligations from their employees paychecks but weren’t depositing the money into the pension funds. This was in the article and video you linked to earlier. It also mentioned that the company had(in 2004) declared bankruptcy and, during those negotiations, the unions had made concessions to keep the company afloat.
Both of those issues are what, I believe, Jermofoot was talking about when he said “your own article gives far more detail, yet you focused on what you wanted to believe.”
Here is an article from the August issue of Fortune magazine which gives an in depth account of the situation:
http://management.fortune.cnn.com/2012/07/26/hostess-twinkies-bankrupt/
Everyone is culpable for Hostess’ demise. Not just the unions. Their biggest problems were mismanagement and continually loading up on increasingly constrictive debt. Putting the ultimate blame on the unions which put the final nail in the coffin just because they didn’t roll over and take it every time the company got into trouble is utterly ridiculous.
None of the management was asked to help shoulder the burden of sacrifice that they were demanding of their workers. In fact, their top execs were giving themselves pay raises while this was all going on. Management made up 17% of the company which seems kind of high since that means there’s 1 person in management for only 5 workers. Seems to me they could have shaved some fat by reducing their management numbers to save some money. But, they didn’t.
Here’s a couple quotes from the article that illustrate my points:
They turned to the unions and demanded new concessions. But the unions, having three years earlier given up thousands of jobs and millions in benefits, flatly refused.
As the majority equity holder, Ripplewood badly wanted to keep Hostess out of bankruptcy. It pleaded with the lenders to show flexibility, but they were not so inclined. The lenders held superior fiscal hands and had less downside if Hostess failed. In the event of a bankruptcy, given all the assets Hostess owned, the lenders would still walk away with millions.
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In fact, their top execs were giving themselves pay raises while this was all going on. Management made up 17% of the company which seems kind of high since that means there’s 1 person in management for only 5 workers. Seems to me they could have shaved some fat by reducing their management numbers to save some money. But, they didn’t.
Not really true because the company busted, so they don’t get paid these raises ( unless they get paid a year in advance up front).
The mismanagement part enters the equation when drivers for $1.09 Ding Dongs gets 100k per year. Nobody should get wages like that in that kind of business.
If they started w/o the union none of this would happen. Instead of $22 per hour for basic labor, the average could be $12-15 and 50% pension contribution. NOT FULL PENSIONS. The 8% is not getting deposited is basically $1.76 and that should have been accepted.
"The Teamsters remain stuck in a time warp, unwilling to sufficiently adapt in a competitive marketplace. The PE firm failed to turn Hostess around after taking it over. The hedgies can’t see beyond their internal rates of return. Et cetera, et cetera, et cetera.
The critical issue in the bankruptcy is legacy pensions. Hostess has roughly $2 billion in unfunded pension liabilities to its various unions’ workers "
The long term issue is that the business was not sustainable due largely to Union pensions. Probably the secondary issue is the smaller bakers union didn’t ratify the new contract, forcing the other 75% of the employees to suffer with those consequences.
Management raises of the rates mentioned were not for 17% of the workforce, that was for only the top few people. The only reason why they are brought up is because they didn’t share in the wage reductions while asking the other workers to vote for lower wages. Not why Hostess went bust anyway.
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@Imperious:
In fact, their top execs were giving themselves pay raises while this was all going on. Management made up 17% of the company which seems kind of high since that means there’s 1 person in management for only 5 workers. Seems to me they could have shaved some fat by reducing their management numbers to save some money. But, they didn’t.
Not really true because the company busted, so they don’t get paid these raises ( unless they get paid a year in advance up front).
The pay raises(up to 80% increase) were given in 2011 when they already knew that the company was failing so… yes, it is true.
The mismanagement part enters the equation when drivers for $1.09 Ding Dongs gets 100k per year. Nobody should get wages like that in that kind of business.
Yeah, and a manager who makes 250k+ definitely earns his money for pushing paper and works harder than the driver, right? :roll:
Their mismanagement came from not cutting part of the management side in their quest for cost reduction and poor financial decisions with regard to how they used the money they borrowed and in the terrible loans they took from their lenders.
The article said that with all the money they were borrowing they never bothered to upgrade their ancient factories and delivery trucks(both obvious sources of inefficiency).
If they started w/o the union none of this would happen. Instead of $22 per hour for basic labor, the average could be $12-15 and 50% pension contribution. NOT FULL PENSIONS. The 8% is not getting deposited is basically $1.76 and that should have been accepted.
This is purely an assumption. And one that is very limited in it’s scope. Not every union worker was earning 100k/year. And not every driver was earning that much either. Only some of the drivers were earning that much and they were clearly the ones who had been working there the longest.
@Imperious:
The critical issue in the bankruptcy is legacy pensions. Hostess has roughly $2 billion in unfunded pension liabilities to its various unions’ workers "
The long term issue is that the business was not sustainable due largely to Union pensions. Probably the secondary issue is the smaller bakers union didn’t ratify the new contract, forcing the other 75% of the employees to suffer with those consequences.
You’re cherry picking your data. You single out their pension obligations and completely ignore the massive debt load they worked themselves into. Plus, since last August 2011, the company hasn’t paid a dime into the union pension funds and they are still going out of business so your claim that it’s the union pensions that are dragging them down is false. Again.
Need proof? Here you go:
“The loans had relatively high interest rates of 8% and 5% (reflecting Hostess’s above-average default risk after bankruptcy). Thus, at the end of the first bankruptcy, Hostess came away not only with concessions from both lenders and unions but with $490 million of fresh capital”
“Those fortuities aggravated Hostess’s two root problems – a highly leveraged capital structure that had little margin of safety, and high labor costs. Neither problem was adequately addressed in the first bankruptcy, and neither existed to the same degree in major competitors like Bimbo and Flowers Food.”
“But the company was dead wrong. Its debt sowed the very seeds of the next bankruptcy.”
“Finally, there are the woebegone Teamsters. They have plenty of skin as well – and feel as if they’ve been fleeced out of almost $100 million from Hostess after the company “temporarily” ceased making union pension contributions last August.”
They borrowed a ton of money at high interest rates during and after their 2004 bankruptcy and then spent it poorly, they are completely ignoring their pension obligations which you say is the cause of their problems, and their major competitors are operating with the same unions and similar contracts, yet they seem to be doing ok. None of the evidence supports your theory.
Plus, the unions had already once suffered massive cutbacks and job losses to save the company. How many more times would they need to sacrifice before you figured out that it was mismanagement that ruined this company and not the unions?
Management raises of the rates mentioned were not for 17% of the workforce, that was for only the top few people. The only reason why they are brought up is because they didn’t share in the wage reductions while asking the other workers to vote for lower wages. Not why Hostess went bust anyway.
I never said all of management got pay raises. I said top execs. 4 of them to be exact. And, yes, it was being mentioned because it illustrated the mismanagement of the company. Further mismanagement and injustice occurred when ALL 17% of management were allowed to keep their jobs, income, and pensions while the unions were the only ones who were required to make sacrifices. That was my point.
They ran the company into the ground, demanded that only the unions and not management make sacrifices, and then blamed the unions for the failure of the company. When a company prospers, it’s because of good management. When a company fails, it’s because of the unions. Typical. Wrong, but typical.
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There is a direct correlation between the decline in unions and the decline in middle class wages.
http://thinkprogress.org/politics/2011/03/03/147994/unions-income-inequality/?mobile=nc
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