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Title: Hostess, Maker Of Twinkies, To Go Out Of Business; Strike Cited
Source:
Los Angeles Times
URL Source: http://www.latimes.com/business/mon ... uiness-20121116,0,3714808.post
Published: Nov 16, 2012
Author: Alana Semuels
Post Date: 2012-11-16 10:21:48 by Brian S
Keywords: None
Views: 40747
Comments: 68
NEW YORK -- Twinkies may last forever, but the same can’t be said for the company that makes the cream-filled sponge cake. Hostess Brands Inc., the company that makes Twinkies and Wonder Bread, has asked a judge for permission to go out of business and lay off 18,500. The company is blaming its decision to shut down on a labor strike by members of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, but Americans’ appetite for junk food has been waning in recent years. The company has filed for bankruptcy twice this decade, the last time in January. "We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Gregory F. Rayburn, Hostess' chief executive, said in a statement. Many businesses have faced labor unrest in the recovery from the recession as they try to dial back benefits and wages and unions resist. In 2011, for example, there were 19 major strikes and lockouts involving more than 1,000 workers, according to the Bureau of Labor Statistics, up from 11 in 2010. The 2011 strikes accounted for 1.02 million lost workdays. The union said in a statement that Hostess made unreasonable demands, including wage and benefit cuts of around 30% for workers, while top executives of the company received large pay increases. “The crisis facing Hostess Brands is the result of nearly a decade of financial and operational mismanagement that resulted in two bankruptcies, mountains of debt, declining sales and lost market share,” said union President Frank Hurt. “The Wall Street investors who took over the company after the last bankruptcy attempted to resolve the mess by attacking the company’s most valuable asset – its workers.” Hostess, based in Irving, Texas, has 565 distribution centers around the country, as well as 33 bakeries and 570 bakery outlets. The union says 24 production facilities are currently on strike. It said it had filed a motion with U.S. Bankruptcy Judge Robert Drain in White Plains, N.Y., for permission to shut down and sell assets. The company’s brands include Twinkies, Drake’s and Nature’s Pride. It also makes Wonder bread, which was America’s first sliced bread, according to the company’s website. It plans to sell its assets to the highest bidders.
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Begin Trace Mode for Comment # 67.
#4. To: Brian S (#0)
And I hope that every single one of those union workers on strike never find another job for the rest of their lives. Once their unemployment benefits run out,let them go live in caves in the words.
The Teamster workers at Hostess are pissed off 'big time'. They took significant pay and pension cuts back in September.
What about the other union workers? Did they refuse to take less and thereby stick a knife in the backs of the Teamsters? I just saw non-Teamster Hostess union workers being interviewed on the evening news a short while ago,and they were babbling "giving this company everything for 30 years and this is the way they treat me!" crap while complaining about the owners and management earning more money than them.
It is the Bakers Union that went on strike. Here is a related article that I had heard some grumbling about earlier: Hostess Blames Union For Bankruptcy After Tripling CEO’s Pay Today, Hostess Brands inc. — the company famed for its sickly sweet desert snacks like Twinkies and Sno Balls — announced they’d be shuttering after more than eighty years of production. But while headlines have been quick to blame unions for the downfall of the company there’s actually more to the story: While the company was filing for bankruptcy, for the second time, earlier this year, it actually tripled its CEO’s pay, and increased other executives’ compensation by as much as 80 percent. At the time, creditors warned that the decision signaled an attempt to “sidestep” bankruptcy rules, potentially as a means for trying to keep the executive at a failing company. The Confectionery, Tobacco Workers & Grain Millers International Union pointed this out in their written reaction to the news that the business is closing: BCTGM members are well aware that 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. Certainly, the company agreed to an out-sized pension debt, but the decision to pay executives more while scorning employee contracts during a bankruptcy reflects a lack of good managerial judgement. It also follows a trend of rising CEO pay in times of economic difficulty. At the manufacturing company Caterpillar, for example, they froze workers’ pay while boosting their CEO’s pay to $17 million. And at Citigroup, CEO Vikram Pandit received $6.7 million for crashing his company, walking off with $260 million after the business lost 88 percent of its value.
Yes,it does,but those wage increases are only for less than a dozen people,and amount to a miniscule portion of their operating costs. AND.....,a solid argument could be made that the CEO and other board members worth to the company is considerably more than that of a bubba with a 8th grade education that has been boxing up Ho Ho's for the last 20 years. I have zero sympathy for people content to spend their entire working lives at dead-end jobs that require nothing more than a few muscles and a pulse,and then while they aren't getting paid enough or somebody is earning more. If they want more money,maybe they should have taken a few night classes and learned a skilled trade or a white collar job that can be used elsewhere?
If they want more money,maybe they should have taken a few night classes and learned a skilled trade or a white collar job that can be used elsewhere? EXACTLY. I was faced with that exact choice, and made the commitment to go back to school. That was ~22 years ago; boot-strapped my way along, working different jobs, typically 50+ hours a week... I started out with a skill (factory maintenance), but I wanted more... I wanted a LOT more. Unlike my co-workers, I was not satisfied with a dead-end job. The results are manifest; the factory that I was at, when I made that decision, has been shut down. Most of my friends from there have been financially wiped-out, lost their homes, and are in desperate straights. In contrast, I've been steadily employed, earning triple what I had been making (in inflation-adjusted dollars). And I'm entertaining the idea of moving to another state to take a C-suite position with a boutique company. The people that stay at a factory for 30 years, and think they will never have to better themselves, never have to stay competitive in the labor market, are fools. They now reap the reward for their laziness- a pink slip. Completely predictable.
To be fair to them,many of them are second or even third generation factory workers there,don't have much of an education,and have been told their whole lives by their family members,neighbors,and union officials that they don't have to think or worry about anything because those jobs will always be there and they will always be getting raises. When it's all they have ever heard,was true for their parents,and all they know,can you REALLY blame them for not waking up and looking around?
July pay raises given for Hostess management doing such a wonderful job of running a productive company. 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.
Hmmm. The salaries posted were reasonable, from my knowledge of what similarly titled executives in other industries are making. I see nothing obviously wrong with the numbers; they're market rate. I'm sure, though, that you will disagree. Not having any similarly marketable skills, you dream of such money while asking customers "would you like fries with that?" I'm sure you'll bitch about executive management, while exhibiting gross ignorance of what they do, how hard they've worked to get there, or how hard the job is when you GET there. I see fools like you ALL the time. And the only thing that disgusts me more than your ignorance, is your incredibly stupid belief that you can just *know* about everything merely by saying so. Feh.
Yep, give the big guys a 30 to 50 % pay raise for running a company into the ground. If you 'think' that's an efficient long term business model no wonder you are still in school.
So what do you give a Muzzy president that runs a country into the ground?? A second term or a Nobel Peace prize??
So what do you give a Muzzy president that runs a country into the ground?? A second term or a Nobel Peace prize?? I wouldn't know because I don't know of any here in the US.
#68. To: mininggold (#67)
A second term or a Nobel Peace prize?? I wouldn't know because I don't know of any here in the US. So what do you think he is anyway?? Christian? Catholic? Jewish? He's claimed to be all of those at one time or another!! But the funny thing is he's also bending all of those faiths over to further his agenda... The only one he gives warm fuzzys and reach arounds to is the muzzys.... HHmmmmm... Wait.... I know, he a Menonite now!!
Top • Page Up • Full Thread • Page Down • Bottom/LatestThe union says 24 production facilities are currently on strike.
#5. To: sneakypete (#4)
Once their unemployment benefits run out,let them go live in caves in the words.
#6. To: Brian S (#5)
The Teamster workers at Hostess are pissed off 'big time'. They took significant pay and pension cuts back in September.
#7. To: sneakypete, Hostess Blames Union For Bankruptcy After Tripling CEOs Pay (#6)
What about the other union workers? Did they refuse to take less and thereby stick a knife in the backs of the Teamsters?
#8. To: Brian S (#7)
Certainly, the company agreed to an out-sized pension debt, but the decision to pay executives more while scorning employee contracts during a bankruptcy reflects a lack of good managerial judgement.
#32. To: sneakypete (#8)
I have zero sympathy for people content to spend their entire working lives at dead-end jobs that require nothing more than a few muscles and a pulse,and then while they aren't getting paid enough or somebody is earning more.
#37. To: Capitalist Eric (#32)
The people that stay at a factory for 30 years, and think they will never have to better themselves, never have to stay competitive in the labor market, are fools. They now reap the reward for their laziness- a pink slip.
#38. To: sneakypete (#37)
#45. To: mininggold (#38)
#48. To: Capitalist Eric (#45)
(Edited)
I see fools like you ALL the time. And the only thing that disgusts me more than your ignorance, is your incredibly stupid belief that you can just *know* about everything merely by saying so. Feh.
#65. To: mininggold, Capitalist Eric (#48)
Yep, give the big guys a 30 to 50 % pay raise for running a company into the ground. If you 'think' that's an efficient long term business model no wonder you are still in school.
#67. To: CZ82 (#65)
Replies to Comment # 67. So what do you give a Muzzy president that runs a country into the ground??
End Trace Mode for Comment # 67.
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