Apocalypse Rising…

[Imperious Leader]

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”.

[U-505]

@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.

[Imperious Leader]

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.

[U-505]

@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.

[frimmel]

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

[Mallery29]

Ack, where’s the love for the cupcake in all this mess?

Leave no cupcake behind…  http://www.google.co.jp/imgres?num=10&hl=en&biw=1920&bih=926&tbm=isch&tbnid=C3mgaXwcsCtmJM:&imgrefurl=http://en.wikipedia.org/wiki/File:Hostess-Cupcake-Whole.jpg&docid=GQ6RoURXF0HauM&imgurl=http://upload.wikimedia.org/wikipedia/commons/2/25/Hostess-Cupcake-Whole.jpg&w=2820&h=2280&ei=SOyoUMSVIoGLmQXw8YDYBA&zoom=1&iact=hc&vpx=553&vpy=184&dur=843&hovh=202&hovw=250&tx=128&ty=100&sig=114087951771160559440&page=1&tbnh=139&tbnw=169&start=0&ndsp=46&ved=1t:429,r:3,s:0,i:105

as to this union/middle class wage…
http://www.debate.org/debates/Labor-Unions/3/

entertain yourselves there…RP makes good points.

[Jermofoot]

@LHoffman:

@Jermofoot:

The truth is much farther than what you stated, it’s not even funny.

Can you please elaborate?

U-505 did an excellent job of outlining it, for the most part.  But I’ll review:

IL said it was the union workers fault for the company failing (as stated by company execs).  His own article said that 2/3 of the workers made concessions on pay, benefits, and pensions, while 1/3 of workers (the smaller union) agreed to pay and other benefits cuts, but not pensions.  Furthermore, Hostess stopped paying into their current pensions a year ago while still retaining the employees’ contribution to it.  So, I don’t see how the union workers are to be blamed for cooperating nearly entirely while making a case on something that has clearly gone amiss on management’s part.

But I’ve read more on this, and here is what I see:

• Hostess filed for bankruptcy in 2004 as well (Ch. 11).  It took 4 1/2 years to resolve. Workers accepted less pay and fewer benefits for equity in the company.  The majority of equity was held by private equity firms that required dividends to get a return on their investment (in a failing company). One third of workers were laid off, 1/6 of bakeries closed, and hundreds of brand stores were closed as well.  This was completed in Feb 2009.

• In less than 2 years, the company was ready to declare Chapter 11 again.  The months prior, they had stopped paying into employee pensions while retaining the employees’ contributions, breaking the recently negotiated contract (a judge enforced the workers to accept the new terms, nonnegotiated).  Meanwhile, they were giving astronomical raises to company execs.  Hostess also claimed declining sales due to healthier eating and competition, and food costs (this was part of the reason in 2004 as well).

• Hostess had a $700 million loan to multiple capital asset firms that specialized in liquidating companies to make a profit.  So, another party wanting pay out at the workers’ expense, which is why Hostess was demanding more cuts to workers’ pay, benefits, and pensions.  After having already taken cuts 2 years prior, the workers almost fully agreed to do so, with the exception of 1/3 not wanting pensions being cut again.

So tell me…does that look like the union is at fault?

That’s not even all the details (the rest are fairly minor, however none really dealing with labor).  But basically, if you parrot the same basic reason as Fox News, you’re probably wrong.

[Imperious Leader]

So, I don’t see how the union workers are to be blamed for cooperating nearly entirely while making a case on something that has clearly gone amiss on management’s part.

Especially while paying a teamster driver $100,000 per year to deliver baked goods. That means $1,923 is paid per week from the sale of baked goods running about $1.09-$1.49 a unit and the cost charged to retailers runs about $.77, so they don’t pay the driver off till they sell 2497 units a week using the $.77 cost figure. I don’t see how it can be any other cause of blame. Their are far more drivers than “managers”.

But basically, if you parrot the same basic reason as Fox News, you’re probably wrong.

And here comes your bias… Never got any info from “fox”. Why even bring that up?

Yeah, and a manager who makes 250k+ definitely earns his money for pushing paper and works harder than the driver, right?  rolleyes

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).

Didn’t you read the company is out of business? nobody got any raises. They voted for raises, but at the same time they gave the employees a choice and you know how they voted. Upgrading an old building is not why they failed. Talk about cherry picking. And yea cutting wages wasn’t any part of the problems.Generally speaking… Labor is at least 1/3 of total expenses. Product/equipment is another 1/3. They try to squeeze the rest as capitalization, but the 1/3 labor guide ran too high.

Other factors are health conscious customers who stopped buying this crap. All you got left is Honey Boo Boo’s mom sustaining Hostess. That is a business model that wont be working long. Management saw this trend and tried to cut labor, but your smaller bakers union voted no and the other 14,000 workers got stuck with that decision. Now go blame management for that.

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.

And that’s why over generations the same people and their relatives have been working at the same company. A good thing. The drivers earn between 50,000 and 100,000 BTW. Use the early example to figure out how many cakes they need to just get back to even, not mentioning truck, insurance, gas, etc…

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.

This debt accumulated from loans that were needed to offset the labor wages/pension obligations, due to Union wages. This debt existed far earlier than 8/11. To characterize the debt service from the period of 8/11 being that “the company didn’t pay a dime ( it is actually 8%) into pensions” is not why they failed.

They failed due to the vote and unsustainable business model of fat-cat union workers unwilling to see how the economy has changed and how two pro union fanboy’s don’t understand that.

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.

Companies like Bimbo do not pay $100,000 a year for drivers. Thats why. Where is your evidence that “…and their major competitors are operating with the same unions and similar contracts, yet they seem to be doing ok.?”  Show us that they pay equal wages and benefits.

Since you asked i will answer:

“Bimbo employs delivery drivers who most likely work for an hourly wage and/or commission, but they also utilize “independent contractors” who sell and distribute their products. Each territory (or route) is unique and like any business, profits vary depending on the location of the market, current product trends and the willingness of the salesperson to work hard and commit the hours to increasing sales.”

They get 1099’s and are entirely dependent on their own initiative to carve out a business. Independent contractors don’t get fully paid pensions or health care. That is a business model that is sustainable. Bimbo survives and the union jackboots ruin a company that has existed for 82 years… buried by increasing wages that are not sustainable in this economy and with that product. So now you know.

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. right, but typical.

Your point is worthless because 4 people don’t compare to 18,500 in terms of wages. The 17% of management labor force is not accurate. Even you can see that 1 out of 5 people being in supervisory positions is an error. I bet this is what unions call anybody who neither bakes cakes nor drives a truck.

Nobody got any raises, the company went bust. What part of that can’t you understand? They wanted raises but that vote was moot. The unions kept their higher wages because they didn’t ratify the new contract. Out of 18,500 workforce, 4,400 bakers union voted NO.

Give it a rest. Argue with somebody else. I’m done with you.

[Imperious Leader]

Oh and another thing.

The teamsters called a strike which seriously effected the cash flow of the company so it can pay debt service. That is also not managements fault.

[U-505]

@frimmel:

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

Not that IL cares about a strong middle class or how it strengthens a country. I believe he would prefer a return to serfdom.

What also caught my attention was as soon as I opened the page I saw an article with the headline “Hostess Blames Union For Bankruptcy After Tripling CEO’s Pay”

There’s even a post from a member that detailed the salaries of the top executives.

Brian Driscoll, CEO, around $750,000 to $2,550,000.
Gary Wandschneider, EVP, $500,000 to $900,000.
John Stewart, EVP, $400,000 to $700,000.
David Loeser, EVP, $375,000 to $656,256.
Kent Magill, EVP, $375,000 to $656,256.
Richard Seban, EVP, $375,000 to $656,256.
John Akeson, SVP, $300,000 to $480,000.
Steven Birgfeld, SVP, $240,000 to $360,000.
Martha Ross, SVP, $240,000 to $360,000.
Rob Kissick, SVP, $182,000 to $273,008.

@Imperious:

Especially while paying a teamster driver $100,000 per year to deliver baked goods. That means $1,923 is paid per week from the sale of baked goods running about $1.09-$1.49 a unit and the cost charged to retailers runs about $.77, so they don’t pay the driver off till they sell 2497 units a week using the $.77 cost figure. I don’t see how it can be any other cause of blame. Their are far more drivers than “managers”.

I hate to repeat myself, but not all drivers were making 100k. And not all union employees were drivers. And I guarantee that all non-drivers were making far less than the drivers. And I also guarantee that all management was making more than the drivers let alone the non-drivers. You are guilty of fact omission. I sentence you to believe the nonsense that you are spewing.

Upgrading an old building is not why they failed.

Nobody said anything about upgrading the buildings themselves. That’s ridiculous. When you come out of bankruptcy with a mountain of debt and a half billion dollars in liquid cash, you have to use the money to improve efficiency because money can’t be used to cut costs short of repaying debt they incurred by borrowing the money in the first place. Upgrading old inefficient machinery and trucks to new efficient models saves money and increases productivity. They didn’t do it. Mismanagement at its finest.

Other factors are health conscious customers who stopped buying this crap. All you got left is Honey Boo Boo’s mom sustaining Hostess. That is a business model that wont be working long. Management saw this trend and tried to cut labor, but your smaller bakers union voted no and the other 14,000 workers got stuck with that decision. Now go blame management for that.

I have no problem blaming management for a bad business model. I challenge you to blame a bad business model on the unions.

And that’s why over generations the same people and their relatives have been working at the same company. A good thing. The drivers earn between 50,000 and 100,000 BTW. Use the early example to figure out how many cakes they need to just get back to even, not mentioning truck, insurance, gas, etc…

Oh, so now only some of the drivers make 100k. And some only make half that. Kind of weakens your argument that drivers making 100k are the cause of the company’s failure.

This debt accumulated from loans that were needed to offset the labor wages/pension obligations, due to Union wages. This debt existed far earlier than 8/11. To characterize the debt service from the period of 8/11 being that “the company didn’t pay a dime ( it is actually 8%) into pensions” is not why they failed.

Yet again, the debt is exactly why they failed. The fortune article explicitly states that the debt incurred during the 2004-2009 bankruptcy reorganization caused the 2012 bankruptcy. I even quoted it in an earlier post. Don’t argue that with me. Take it up with the guy who did the research and wrote the article. I’m sure you know better than him.

The “the company didn’t pay a dime into pensions for over a year” argument was used to refute your earlier argument that the company’s pension obligations were the cause of the company’s failure because if the company’s pension obligations were truly the cause of their failure then when they halted the payments into the pension plans it would have brought them back into profitability. But, it didn’t. They were still under water from their debt alone.

They failed due to the vote and unsustainable business model of fat-cat union workers unwilling to see how the economy has changed and how two pro union fanboy’s don’t understand that.

I worked as a union sheet metal worker while I was going to college and I have also worked in non-union jobs. I’ve seen how poorly non-union employees are treated and it only served to reinforce my convictions. Pro-union and proud of it. If you don’t like it. Tough.

Companies like Bimbo do not pay $100,000 a year for drivers. Thats why. Where is your evidence that “…and their major competitors are operating with the same unions and similar contracts, yet they seem to be doing ok.?”  Show us that they pay equal wages and benefits.

Since you asked i will answer:

“Bimbo employs delivery drivers who most likely work for an hourly wage and/or commission, but they also utilize “independent contractors” who sell and distribute their products. Each territory (or route) is unique and like any business, profits vary depending on the location of the market, current product trends and the willingness of the salesperson to work hard and commit the hours to increasing sales.”

They get 1099’s and are entirely dependent on their own initiative to carve out a business. Independent contractors don’t get fully paid pensions or health care. That is a business model that is sustainable. Bimbo survives and the union jackboots ruin a company that has existed for 82 years… buried by increasing wages that are not sustainable in this economy and with that product. So now you know.

Please. Independent contractors are typically paid more than their non-contractor counterparts because they are responsible for their own benefits and vehicle maintenance costs. The company saves money on the deal, but the company’s savings are nowhere near as large as you seem to think they are and certainly wouldn’t have come anywhere near to solving all of their problems. Don’t try to fool me.

Your point is worthless because 4 people don’t compare to 18,500 in terms of wages. The 17% of management labor force is not accurate. Even you can see that 1 out of 5 people being in supervisory positions is an error. I bet this is what unions call anybody who neither bakes cakes nor drives a truck.

You’re finally somewhat correct here. That 17% number isn’t just management, it’s all non-union employees which consist of management, salespeople, engineers, etc. The vast majority of whom make more that most union employees and none of which were required to take the pay and benefit cuts that the unions were asked to do. And you wonder why the unions told the company to go scratch.

Nobody got any raises, the company went bust. What part of that can’t you understand? They wanted raises but that vote was moot. The unions kept their higher wages because they didn’t ratify the new contract. Out of 18,500 workforce, 4,400 bakers union voted NO.

Yes, many in upper management got very large pay raises from back in August of 2011. What part of that can’t you understand? Unless you think I’m referring to the unions. In that case, why would I be arguing that the unions got pay raises when I know they got pay cuts? My dog understands English better than you do.

The evidence is there for all to see and review. Labor costs were a problem, but the bigger problem, by far, was company mismanagement. You’ve been supporting your argument with little more than lies and half-truths. You’re wrong. You know you’re wrong. Yet you continue to argue out of nothing more than foolish pride because you can’t bring yourself to admit someone else is right. Go on with your bad self. You can ignore as many of the facts as you want, it still won’t make your argument valid.

[LHoffman]

Unions vs Management aside, I think this is a very important factor to consider that no one has brought up yet: the effect of the US sugar tariff on industry.

http://www.alaskadispatch.com/article/did-sugar-bankrupt-twinkies-maker-hostess-brands

“for every sugar job saved by tariffs, three confectionery manufacturing jobs are lost.”

A bit more explanation on the tariff itself:
http://www.mjperry.blogspot.com/2012/01/sugar-tariffs-cost-americans-386.html

[Imperious Leader]

Not that IL cares about a strong middle class or how it strengthens a country. I believe he would prefer a return to serfdom.

It’s nice that in order to feel better about your argument you need to make up nonsense and take the most insane conclusions… This case being “it’s got to be serfdom or bust”
Funny you can’t admit the Union is less than clean. Which Union did you belong too?

What also caught my attention was as soon as I opened the page I saw an article with the headline “Hostess Blames Union For Bankruptcy After Tripling CEO�s Pay”

There’s even a post from a member that detailed the salaries of the top executives.

Brian Driscoll, CEO, around $750,000 to $2,550,000.
Gary Wandschneider, EVP, $500,000 to $900,000.
John Stewart, EVP, $400,000 to $700,000.
David Loeser, EVP, $375,000 to $656,256.
Kent Magill, EVP, $375,000 to $656,256.
Richard Seban, EVP, $375,000 to $656,256.
John Akeson, SVP, $300,000 to $480,000.
Steven Birgfeld, SVP, $240,000 to $360,000.
Martha Ross, SVP, $240,000 to $360,000.
Rob Kissick, SVP, $182,000 to $273,008.

Funny thing is these raises were voted in July 2012 and the company went bust November….5 months of pay raises caused the company failure? Hilarious!

Quote from: Imperious Leader on November 18, 2012, 10:56:26 am

Especially while paying a teamster driver $100,000 per year to deliver baked goods. That means $1,923 is paid per week from the sale of baked goods running about $1.09-$1.49 a unit and the cost charged to retailers runs about $.77, so they don’t pay the driver off till they sell 2497 units a week using the $.77 cost figure. I don’t see how it can be any other cause of blame. Their are far more drivers than “managers”.

I hate to repeat myself, but not all drivers were making 100k. And not all union employees were drivers. And I guarantee that all non-drivers were making far less than the drivers. And I also guarantee that all management was making more than the drivers let alone the non-drivers. You are guilty of fact omission. I sentence you to believe the nonsense that you are spewing.

They made between 50K and 100K, Take 50K average, means at .77 per unit just to get whole they need to sell 64,935 units of cakes. Bimbo which is run far more efficiently pays drivers about $550 a week, which is $28,600 a year. They as you say do ok and why? Because they don’t let Union wages get ahead of that is sustainable. Something you clearly have no clue about.

Quote
Upgrading an old building is not why they failed.

Nobody said anything about upgrading the buildings themselves. That’s ridiculous. When you come out of bankruptcy with a mountain of debt and a half billion dollars in liquid cash, you have to use the money to improve efficiency because money can’t be used to cut costs short of repaying debt they incurred by borrowing the money in the first place. Upgrading old inefficient machinery and trucks to new efficient models saves money and increases productivity. They didn’t do it. Mismanagement at its finest.

The management was too busy paying stifling Union wages, so they couldn’t. Bimbo doesn’t have that problem because they control wages better.

Quote
Other factors are health conscious customers who stopped buying this crap. All you got left is Honey Boo Boo’s mom sustaining Hostess. That is a business model that wont be working long. Management saw this trend and tried to cut labor, but your smaller bakers union voted no and the other 14,000 workers got stuck with that decision. Now go blame management for that.

I have no problem blaming management for a bad business model. I challenge you to blame a bad business model on the unions.

I blame it mostly on the Unions. You on the other hand show no blame for Unions because to you they can do no wrong.

Quote
And that’s why over generations the same people and their relatives have been working at the same company. A good thing. The drivers earn between 50,000 and 100,000 BTW. Use the early example to figure out how many cakes they need to just get back to even, not mentioning truck, insurance, gas, etc…

Oh, so now only some of the drivers make 100k. And some only make half that. Kind of weakens your argument that drivers making 100k are the cause of the company’s failure.

The drivers who make 50,000 also drive the company out of business, my argument is still stronger than yours. Bimbo pays 28K, Hostess 50K

Quote
This debt accumulated from loans that were needed to offset the labor wages/pension obligations, due to Union wages. This debt existed far earlier than 8/11. To characterize the debt service from the period of 8/11 being that “the company didn’t pay a dime ( it is actually 8%) into pensions” is not why they failed.

Yet again, the debt is exactly why they failed. The fortune article explicitly states that the debt incurred during the 2004-2009 bankruptcy reorganization caused the 2012 bankruptcy. I even quoted it in an earlier post. Don’t argue that with me. Take it up with the guy who did the research and wrote the article. I’m sure you know better than him.

The “the company didn’t pay a dime into pensions for over a year” argument was used to refute your earlier argument that the company’s pension obligations were the cause of the company’s failure because if the company’s pension obligations were truly the cause of their failure then when they halted the payments into the pension plans it would have brought them back into profitability. But, it didn’t. They were still under water from their debt alone.

The debt was most cased by Union wages. Add up the management increases from July 2012, and then add up 18,400 people making 50K…see which is larger and see where the debt actually serviced. LOL

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They failed due to the vote and unsustainable business model of fat-cat union workers unwilling to see how the economy has changed and how two pro union fanboy’s don’t understand that.

I worked as a union sheet metal worker while I was going to college and I have also worked in non-union jobs. I’ve seen how poorly non-union employees are treated and it only served to reinforce my convictions. Pro-union and proud of it. If you don’t like it. Tough.

I knew your bias would show it’s hand. I love how no matter what the circumstance is they are “always treated poorly” Nice touch. And that’s why you are wrong, again.

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Companies like Bimbo do not pay $100,000 a year for drivers. Thats why. Where is your evidence that “…and their major competitors are operating with the same unions and similar contracts, yet they seem to be doing ok.?”  Show us that they pay equal wages and benefits.

Since you asked i will answer:

“Bimbo employs delivery drivers who most likely work for an hourly wage and/or commission, but they also utilize “independent contractors” who sell and distribute their products. Each territory (or route) is unique and like any business, profits vary depending on the location of the market, current product trends and the willingness of the salesperson to work hard and commit the hours to increasing sales.”

They get 1099’s and are entirely dependent on their own initiative to carve out a business. Independent contractors don’t get fully paid pensions or health care. That is a business model that is sustainable. Bimbo survives and the union jackboots ruin a company that has existed for 82 years… buried by increasing wages that are not sustainable in this economy and with that product. So now you know.

Please. Independent contractors are typically paid more than their non-contractor counterparts because they are responsible for their own benefits and vehicle maintenance costs. The company saves money on the deal, but the company’s savings are nowhere near as large as you seem to think they are and certainly wouldn’t have come anywhere near to solving all of their problems. Don’t try to fool me.

Wrong again. The IC prove the route is sustainable because they stand to make or lose money based on sustainable numbers. Get your head out of your crack and learn how business works. The costs are not borne by the company in Bimbo’s case. That’s why they succeed among other things.

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Nobody got any raises, the company went bust. What part of that can’t you understand? They wanted raises but that vote was moot. The unions kept their higher wages because they didn’t ratify the new contract. Out of 18,500 workforce, 4,400 bakers union voted NO.

Yes, many in upper management got very large pay raises from back in August of 2011. What part of that can’t you understand? Unless you think I’m referring to the unions. In that case, why would I be arguing that the unions got pay raises when I know they got pay cuts? My dog understands English better than you do.

The raises are from July 2012. What part of THAT do you not understand? ( in your language translated: woof, woof, bark, bark)

The evidence is there for all to see and review. Sugar costs were a problem, but the bigger problem, by far, was union labor. You’ve been supporting your argument with little more than “i was in a union and they can do no wrong” and half-truths. You’re wrong. You know you’re wrong. Yet you continue to argue out of nothing more than foolish pride because you can’t bring yourself to admit someone else is right. Go on with your bad self. You can ignore as many of the facts as you want, it still won’t make your argument valid.

[General 6 Stars]

Bankrupt judge told them to try and work it out one last time. CEO will decide tomorrow what he wants to do.

[Imperious Leader]

I think they will sell to Bimbo. That carves out the unsustainable union, replacing it with a realistic outcome.

[Jermofoot]

@Imperious:

And here comes your bias… Never got any info from “fox”. Why even bring that up?

I never said you did.

@Imperious:

Funny thing is these raises were voted in July 2012 and the company went bust November….5 months of pay raises caused the company failure? Hilarious!

No…it was July 2011. Hostess is also currently trying to pay top execs almost 2 million dollars in bonuses…for a failed company.  See how ridiculous the business has been run?

They made between 50K and 100K, Take 50K average, means at .77 per unit just to get whole they need to sell 64,935 units of cakes. Bimbo which is run far more efficiently pays drivers about $550 a week, which is $28,600 a year. They as you say do ok and why? Because they don’t let Union wages get ahead of that is sustainable. Something you clearly have no clue about.

Not that I trust your numbers in this discussion, but let’s suppose what you say is true: that is a textbook case of mismanagement.  Letting labor costs run rampant is a management error.

Furthermore,  Glassdoor reports Bimbo drivers earn 76-84K a year.  At least in the US, although I’d not be surprised if you were comparing to wages in Mexico.

The debt was most cased by Union wages. Add up the management increases from July 2012, and then add up 18,400 people making 50K…see which is larger and see where the debt actually serviced. LOL

The debt from the first bankruptcy was caused by declining sales, excess capacity, payroll, and food costs.  Union workers made concessions (management didn’t) as was negotiated.  Everything else has to do with management of the company.  Additionally, the debt grew by a third just going through the first bankruptcy.  Which it never would have emerged from if union workers had not sacrificed.

Additionally, here is a Washington Post article that states that Hostess “would have lost money without any pension costs at all.” http://www.washingtonpost.com/business/economy/2012/01/11/gIQAxrXAsP_story.html?Post+generic=?tid=sm_twitter_washingtonpost  Classic mismanagement.

I knew your bias would show it’s hand. I love how no matter what the circumstance is they are “always treated poorly” Nice touch. And that’s why you are wrong, again.

You call what Hostess has done to the union workers being nice?  Hell, the union workers bent over backwards and management still shit on them (actually, not surprised at that).

Wrong again. The IC prove the route is sustainable because they stand to make or lose money based on sustainable numbers. Get your head out of your crack and learn how business works. The costs are not borne by the company in Bimbo’s case. That’s why they succeed among other things.

They save money with independent contractors?  :lol: :lol: :lol:
Wow, man, you sound about as adept at this as the Hostess execs.

My dog understands English better than you do.

The raises are from July 2012. What part of THAT do you not understand? ( in your language translated: woof, woof, bark, bark)

Again, July 2011.  And yes, your fundamental inability to comprehend what you are reading (and your argument constantly running tangents or skewing what’s been said, etc.) makes this discussion difficult.

[Imperious Leader]

No…it was July 2011. Hostess is also currently trying to pay top execs almost 2 million dollars in bonuses…for a failed company.  See how ridiculous the business has been run?

And how much are these people getting paid now? They get nothing. Union gets nothing. All because the bakeries union didn’t ratify what the teamsters already voted FOR: namely, 8% pay reduction and increased contributions toward their own pensions and health care. The cash flow due to the strike destroyed any possibility of the company coming back. You can blame this and that, but the direct result was UNIONS.

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They made between 50K and 100K, Take 50K average, means at .77 per unit just to get whole they need to sell 64,935 units of cakes. Bimbo which is run far more efficiently pays drivers about $550 a week, which is $28,600 a year. They as you say do ok and why? Because they don’t let Union wages get ahead of that is sustainable. Something you clearly have no clue about.

Not that I trust your numbers in this discussion, but let’s suppose what you say is true: that is a textbook case of mismanagement.  Letting labor costs run rampant is a management error.

Furthermore,  Glassdoor reports Bimbo drivers earn 76-84K a year.  At least in the US, although I’d not be surprised if you were comparing to wages in Mexico.

Go look up the last compensation package for Bimbo employees. Do i have to do all your homework?

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The debt was most cased by Union wages. Add up the management increases from July 2012, and then add up 18,400 people making 50K…see which is larger and see where the debt actually serviced. LOL

The debt from the first bankruptcy was caused by declining sales, excess capacity, payroll, and food costs.  Union workers made concessions (management didn’t) as was negotiated.  Everything else has to do with management of the company.  Additionally, the debt grew by a third just going through the first bankruptcy.  Which it never would have emerged from if union workers had not sacrificed.

Well the first time you mention food costs. But you failed to mention that the Union didn’t ratify the new contract. The strike killed the cashflow and the company went bust. Blame the unions for that.

Additionally, here is a Washington Post article that states that Hostess “would have lost money without any pension costs at all.” http://www.washingtonpost.com/business/economy/2012/01/11/gIQAxrXAsP_story.html?Post+generic=?tid=sm_twitter_washingtonpost  Classic mismanagement.

You can find anything on the internet. Mostly, the view is the union was at fault. get over it.

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I knew your bias would show it’s hand. I love how no matter what the circumstance is they are “always treated poorly” Nice touch. And that’s why you are wrong, again.

You call what Hostess has done to the union workers being nice?  Hell, the union workers bent over backwards and management still ���� on them (actually, not surprised at that).

You call what Hostess has done to the management being nice?  Hell, the executives bent over backwards and now they get no wages at all because the company is bust. Yea keep skipping over that fact that they now get nothing because the UNION didn’t ratify the contract.

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Wrong again. The IC prove the route is sustainable because they stand to make or lose money based on sustainable numbers. Get your head out of your crack and learn how business works. The costs are not borne by the company in Bimbo’s case. That’s why they succeed among other things.

They save money with independent contractors?  cheesy cheesy cheesy
Wow, man, you sound about as adept at this as the Hostess execs.

That is because you have no clue what independent contractor means. They pay all their own costs, not the company. That takes the company out of the problem of having to make sure every route makes a profit. Instead, they just sell product to distributors and most associated costs are not their worry.