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Title: Is America ready for a Mexican Twinkie? Bankrupt Hostess 'to sell beloved snack to cake company south of the border'
Source:
Daily Mail
URL Source: http://www.dailymail.co.uk/news/art ... onfections-shelves-frenzy.html
Published: Nov 19, 2012
Author: By Daily Mail Reporter
Post Date: 2012-11-19 12:03:39 by Murron
Keywords: None
Views: 4007
Comments: 6
Is America ready for a Mexican Twinkie? Bankrupt Hostess 'to sell beloved snack to cake company south of the border' A Mexican company may come to the rescue of Twinkies-loving Americans across the country as it looks to acquire the bankrupt Hostess Brands to keep its lip-smacking-sweet confections on store shelves for years to come. Mexican company Grupo Bimbo is reportedly eyeing Hostess Brands, the company that makes Twinkies, Ding Dongs and Ho Ho's, after Hostess announced last week that it would shutter and liquidate its 33 bakeries. News of Hostess Brands' liquidation struck fear in the hearts of Twinkies loyalists across the country, who scrambled to snatch up the sticky-sweet treats from stores and online for fear of never tasting them again. Stocking up: Andy Wagar piles Twinkies and other Hostess products into his car in Bellingham, Washington Taking no chances: Michelle Craft bought $100 worth of Hostess treats at a store in Denver on Friday As a result, the all-American Twinkies brand is now becoming more attractive to potential buyers. Food producers ConAgra and Flowers Food. the American company behind Nature Valley granola, have considered purchasing the company. But Mexico's Grupo Bimbo, the world's largest bread baking firm, may have the upper hand. Bimbo owns parts of Sarah Lee, Entenmann's and Thomas English Muffins. The company had previously made an offer of $580 million a few years ago, according to Forbes. Hostess is now estimated to be worth only $135 million. Part of the reason for Hostess's bankruptcy is high sugar prices tied to U.S. trade tariffs -- which wouldn't be an issue in Mexico, where Bimbo can take advantage of lower-priced sugar. The family that owns and operates Grupo Bimbo is reportedly worth $4 billion. As the future Twinkies hangs in the balance, a war of words has broken out between the unions and the snacks maker over who is to blame for them going out of business. The Bakery, Confectionary, Tobacco Workers and Grain Millers International Union claims that the company would have gone out of business years ago if it hadn't been for the efforts of their employees. Seeing the funny side: But Curtis Smout was taking precautions against the snacks' disappearance Meanwhile, Hostess CEO Rayburn has publicly stated without doubt that the closure of the bakery giant on Nov. 16 was due to failed negotiations with the unions and they will be at fault if the Twinkies brand disappears for good. Issuing a statement clarifying their position, BCTGM International President Frank Hurt said, 'the truth is that had it not been for the valiant efforts of our members over the last eight years, including accepting significant wage and benefit concessions after the first bankruptcy, this company would have gone out of business long ago.' 'Hostess failed because its six management teams over the last eight years were unable to make it a profitable, successful business enterprise.' Hurt explains in his statement that a prior bankruptcy plan submitted by Hostess earlier this year was unreasonable and would have done little to reduce debt, but provided Hostess executives ample compensation. A representative for the union speaking to Businessinsider.com said that, 'Hostess is a corrupt company and is attempting to shut their plant down because we are not willing to conform and take slave wages. We won't do that.' 'They're a big business who's mismanaged the company and made all of us suffer.' Multi-generational: Heather Griffiths and her mother Dori team up to buy the Hostess treats they need 'We've been in situations like this, where Wall Street, big business investors will attempt to chop up wages and have workers work for little or nothing, where they're unable to support their families. 'When they have to take action to close the plant, that happens. We have families that cannot work for these types of wages and have little to no healthcare.' In response to the decision to close Hostess at the cost of 18,500 jobs and the closure of 33 plants, Greg Rayburn laid the blame at the door of the unions. 'The leadership of that union made the decision that they’re willing to sacrifice these jobs because they don’t really want to have these kinds of concessions from other companies,' said Rayburn. While most of the firm's most iconic brands are likely to be snapped up by other manufacturers, Twinkie die-hards were taking no chances after the announcement. The snacks were flying off shelves throughout the nation, and grocery store workers reported that they were fast running out of Twinkies and other Hostess brands. 'We may have a few things left, but pretty much we're out of our Hostess stuff,' a store manager in Chicago told Businessweek. And a spokesman for grocery chain Supervalu warned, 'We will only have the products while supplies last.' Customers flocked to the Wonder Hostess Bakery Coutlet in Indianapolis to get their hands on the fast-vanishing treats. Demand: there were long lines outside the Hostess store in Denver when the company announced its demise Shortage: Shoppers in Waterloo, Iowa were out of luck when the tried to stockpile the goodies Charles Selke showed journalists his plastic bag stuffed with snacks, including Zingers dessert cakes. 'How do these just disappear from your life?', he asked. 'That's just not right, man. I'm loyal. I love these things, and I'm diabetic.' For others, the rush to snap up Hostess foodstuffs was motivated by historic considerations, as in the case of Samantha Caldwell, from Chicago. She bought a pack of Twinkies to give to her four-year-old son, saying: 'This way he can say, "I had one of those."' In New York City, many grocery stores had run out of Twinkies by mid-afternoon, with only Hostess' less popular products left over. The shortage led to the snacks selling for wildly inflated prices on eBay and other online marketplaces. One opportunistic seller managed to offload a box of 10 Twinkies - which would normally cost no more than $5 - for $60. It is unclear how long the sweet treats will stay fresh - while it is widely rumoured that Twinkies remain edible for decades, it is unclear to what extent that is true. 'I don't think it's a stretch to say there's a lot of sadness today,' Hostess spokesman Tom Becker said, adding: '18,500 people had jobs yesterday and knew they weren't going to have jobs anymore when they woke up today.' The 82-year-old company, based in Irving, Texas, said a nationwide worker strike crippled its ability to make and deliver products, which include Ding Dongs, Ho Ho’s, Dolly Madison and Drake's cakes. 'There's no way to soften the fact that this will hurt every Hostess Brands employee,' the company's chief executive, Gregory Rayburn, said in a letter to employees. 'All Hostess Brands employees will eventually lose their jobs - some sooner than others.' Shut: A sign taped onto the door of Hostess plant is seen in St. Louis as the company goes out of business Hostess had warned its workers that it would file a motion in U.S. Bankruptcy Court to unwind its business and sell assets if plant operations didn't return to normal levels by Thursday evening. It went ahead and filed the motion on Friday, but said deliveries will continue and Hostess Brands retail stores will stay open for several days to sell already-baked products. Yet the eventual closure will shutter 33 bakeries, 565 distribution centers, 570 bakery outlet stores and approximately 5,500 delivery routes, the Chicago Sun-Timesreported, leaving thousands out of work. Out of work: Lee Byers mans the picket line outside the closed Wonder Bread bakery in Lenexa, Kansas On strike: Striking worker and Chief Steward Kravis Pfeiffer from the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, representing Hostess workers in Peoria, Illinois Angry employees: Workers gather to strike outside the Hostess bakery in Memphis earlier this week 'It’s a very sad day because there's lots of history there,' Donald Woods, president of the Local 1 union that represents 500 workers at Hostess plants in Schiller Park, Hodgkins and Peoria, Illinois told the Sun-Times. 'We have members who've had 40 years there. ... Their dream was working there and retire there.' Valorie Smith, who has worked at the Hostess packing plant in Schiller Park for 27 years, stood outside her workplace on Friday with a group of fellow employees waiting to hear the news. Smith, 50, said the 10- to 12-hour shifts were tough. 'I gave it my all here,' she lamented to the Sun-Times. 'It’s hard on your body. It breaks you down.' The privately held company filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade. Waiting game: Picketers play cards outside of the Hostess plant in St. Louis on Friday Outrage: Diana McKinley, a 33-year employee of Hostess, pickets on Thursday in Sacramento, California Over: The closure affects 33 bakeries, 565 distribution centers, 570 bakery stores and 5,500 delivery routes ‘Many people have worked incredibly long and hard to keep this from happening, but now Hostess Brands has no other alternative than to begin the process of winding down and preparing for the sale of our iconic brands,’ Rayburn said. 'We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike.' But union members said the company only has itself to blame. Thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike last week after rejecting a contract offer in September that cut wages and benefits. Most of the company's employees had approved an eight per cent pay cut for the coming year, but the members of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union had voted against the cut and a change in the pension plan. Pulling out: A Hostess Wonder Bread truck is shown in front of the Utah Hostess plant in Ogden '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,' the union said in a statement. '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 has said that production at about a dozen of its 33 plants has been seriously affected by the strike. Three plants were closed earlier this week. The company, founded in 1930, was fighting battles beyond labor costs. Competition is increasing in the snack space and Americans are becoming more conscious about healthy eating.
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#1. To: Murron (#0)
Hmmm... government interfering in the free market, helping another company into bankruptcy???? Imagine that! [[[ *eyeball roll* ]]]
The total # of registered voters (election 2012) was ~197 million voters. Barack Obama: 60,652,238 = 30.8% The U.S. government no longer has the consent of the people. "Always vote for principle, though you may vote alone, and you may cherish the sweetest reflection that your vote is never lost." Obama's "Forward" coming to light. This is not going to be the first company to go belly up because it costs more to employ than put a product out for sale. I am thinking we are seeing the first full generation of "students" hitting the adult age where Econ 101 for them was not "guns vs. butter" and the "invisible hand", but how 'great' Karl Marx was.
5 Trust in the Lord with all your heart, And lean not on your own understanding; 6 In all your ways acknowledge Him, And He shall direct[a] your paths.(Proverbs 3:5-6)
Of this, there can be no doubt. Back when I was working on my bachelors' degree (Managerial Economics), one professor who was teaching advanced econ started her lecture by saying she was proud to be a communist. During that class, every paper I submitted shredded her arguments. I aced the class, not because she liked my papers, but because everything I wrote was heavily backed by supporting documentation, which could not easily be challenged. As she handed me my final paper, she asked "if you don't believe anything I say, why did you take the course?" My answer was, "I needed the units." Sadly, most of the students in that class didn't pick up on the fact they were being lied to. Pity. Straight out of "Atlas Shrugged." How long, until real producers simply stop offering their intellect, and only offer their backs? Personally, I think we're already getting there...
The total # of registered voters (election 2012) was ~197 million voters. Barack Obama: 60,652,238 = 30.8% The U.S. government no longer has the consent of the people. "Always vote for principle, though you may vote alone, and you may cherish the sweetest reflection that your vote is never lost." Why not? They/we have been buying Mexican Chevrolets for years. Bimbo owns parts of Sarah Lee, Ok,in what language is that NOT funny?
Why is democracy held in such high esteem when it’s the enemy of the minority and makes all rights relative to the dictates of the majority? (Ron Paul,2012)
You have better people skills than me. I told a couple of professors,"In a just world I would be killing you,not taking your bullshit communist propaganda classes." They didn't seem to like me very much.
Why is democracy held in such high esteem when it’s the enemy of the minority and makes all rights relative to the dictates of the majority? (Ron Paul,2012)
LMAO... Nice... 8^)
The total # of registered voters (election 2012) was ~197 million voters. Barack Obama: 60,652,238 = 30.8% The U.S. government no longer has the consent of the people. "Always vote for principle, though you may vote alone, and you may cherish the sweetest reflection that your vote is never lost."Part of the reason for Hostess's bankruptcy is high sugar prices tied to U.S. trade tariffs -- which wouldn't be an issue in Mexico, where Bimbo can take advantage of lower-priced sugar.
Mitt Romney: 57,810,407 = 29.4%
NONE OF THE ABOVE: ~77,000,000 = 40%.
-- John Quincy Adams --
#2. To: Capitalist Eric, GarySpFc, TooConservative, Liberator, A K A Stone (#1)
A Mexican company may come to the rescue of Twinkies-loving Americans across the country as it looks to acquire the bankrupt Hostess Brands to keep its lip-smacking-sweet confections on store shelves for years to come.
#3. To: redleghunter (#2)
I am thinking we are seeing the first full generation of "students" hitting the adult age where Econ 101 for them was not "guns vs. butter" and the "invisible hand", but how 'great' Karl Marx was.
Obama's "Forward" coming to light. This is not going to be the first company to go belly up because it costs more to employ than put a product out for sale.
Mitt Romney: 57,810,407 = 29.4%
NONE OF THE ABOVE: ~77,000,000 = 40%.
-- John Quincy Adams --
#4. To: Murron (#0)
Is America ready for a Mexican Twinkie?
#5. To: Capitalist Eric (#3)
As she handed me my final paper, she asked "if you don't believe anything I say, why did you take the course?" My answer was, "I needed the units."
#6. To: sneakypete (#5)
Mitt Romney: 57,810,407 = 29.4%
NONE OF THE ABOVE: ~77,000,000 = 40%.
-- John Quincy Adams --
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