Hostess can't preserve itself

Hostess bakeries filed for another type of bankruptcy today to reorganised.

there are many things wrong with how the company has been run in the last 10 years, but this glaring figure is impossible to ignore:

Currently, Hostess reports $1.4 billion in debt.

Its largest debt is the union pension fund, owed $944 million. Around 2/3rds of the debt levels are not to business creditors, but to satisfy union negotiated agreements.

http://online.wsj.com/article/SB10001424052970204257504577154402317896574.html

Unions... Said it before and I'll say it again, that's what's wrong with doing business in this country. And we wonder why our jobs are going overseas...

As long add Pillsbury is still around. The aroma fills the air on the way home. Pretzels one day, doughnuts the next... The blissful flavors change daily. Mmmm... My mouth is watering...

nooo! The deep fried twinkie is in danger!

Conquest351 wrote: Unions... Said it before and I'll say it again, that's what's wrong with doing business in this country. And we wonder why our jobs are going overseas...

So had they been in the situation that each worker had agreed upon the exact same compensation, but not a union, that would be ok?

Unions are fine. Take some off the top.

Rufledt wrote: nooo! The deep fried twinkie is in danger!

Chill out. It tastes the same as a funnel cake. Goddamnit! Now I'm hungry again.

I read "hotness" a whole bunch of times.

poopshovel wrote: I read "hotness" a whole bunch of times.

this. was expecting smut spam.

I would rather have tastycake anyway.

And yes.. I hate how people automatically jump on the "it's the unions" bandwagen without doing some digging of their own.

I blame the unions.

I blame both management and unions. Not that I'm a Twinkie fan in the least, I can't stand the things.

I'm not a union guy, but when a company fails, it's ALWAYS managements fault. They are there to manage. They didn't.

I blame Biggest Loser.

In reply to alfadriver:

nice impossible example.

why impossible? because lacking some binding contract, even the stupidest executive teams have/would slash workforce or their pay to compensate long before such a situation could exist.

In reply to mad_machine:

Well, i gave a source to start looking into things from, but spotlit the info I thought was most relevant to my post.

In reply to Zomby woof:

the objective of union is to create a monopoly on labor, which means management can't actually manage the labor directly.

Yeah, I could care less about the Twinkies. But if the orange cupcakes go away, I'm going to need counseling and rehab.

I don't know the "ins and outs" of all of this, but I am inclined to agree it's the fault of unions AND management. YEARS ago, Hostess was in a similar situation and blamed their drivers (I don't know if they are the union causing the most trouble, but it was way back then) and what has management done in the meantime? I don't know for sure, but it seems like they must have been marking time til retirement.

Unfortunately, the "little people" who man the stores will take it in their shorts...along with the customers. Other, similar bakeries are still out there, like Merita, and the bakery that supplies all the Hispanic grocery stores...so there is a market. It's just poorly served by Hostess.

A shame, really, cause some of the Hostess products (like their brownies) kick the a$$ of Lilttle Debbie.

madmallard wrote: In reply to alfadriver: nice impossible example. why impossible? because lacking some binding contract, even the stupidest executive teams have/would slash workforce or their pay to compensate long before such a situation could exist.

Exactly.. I saw that first hand here in Atlantic City. Pay day is thursday at Harrah's.. it was also the day they handed out the lay of slips.

Most of the union departments lost a few people.. the non-union ones were decimated.

My own department, a small one with only 18 people, got it,s workforce cut in half.. and then management wants to know why we couldn't get our work done.. and oh yes.. you can't work overtime.. so if it is not done in 8, it's not done.

Meanwhile, our CEO made 10.7 Million..

...actually, it sucks. Never a good thing when a major American company goes under.

I'm not going to jump on the "the unions are causing the unusually warm winter" bandwagon, though.

madmallard wrote: In reply to alfadriver: nice impossible example. why impossible? because lacking some binding contract, even the stupidest executive teams have/would slash workforce or their pay to compensate long before such a situation could exist.

So blame the workers, who actually make the product, as opposed to the management who don't actually do physical work. Ok....

When I take a job, I negotiate for a fair compensation contract- salary, pension, healthcare. And I'm non union. Probably more non-union contracts here than union at Hostess. Far, far from an impossible example on either end.

In reply to mad_machine:

exactly, in which case the company was doomed anyway in spite of this condition, irrespective of the union consideration.

Like i said in the main post, tho.... many things are wrong in the last decade with Hostess.

But the glaring fact that 2/3rds of standing debt is to union pensions and not any external debtor... and if you remover that, Hostess has enough assets to backstop the remaning debts in-full, one just can't ignore that.

madmallard wrote: In reply to mad_machine: But the glaring fact that 2/3rds of standing debt is to union pensions and not any external debtor... and if you remover that, Hostess has enough assets to backstop the remaning debts in-full, one just can't ignore that.

Again, if the workers negotiated the same contract as they have, but not as a union, how would this be better, financially? Workers are not allowed to profit from their work, but management are?

Instead of blaming the unions, it's also quite possible that the diet of their consumers changed, which meant less Hostess being sold. but they will always blame the workers.... gets old.

If they hadn't had to pay the union pensions, they'd have had to pay the same amount extra for the employees to put in their 401k's!

N Sperlo wrote: As long add Pillsbury is still around. The aroma fills the air on the way home. Pretzels one day, doughnuts the next... The blissful flavors change daily. Mmmm... My mouth is watering...

I used to drive past Pillsbury every now and then when I worked at Estes off of North Broadway.

I agree, very yummy smells coming from that place!

It's my fault. In my pursuit to loose weight, I put Hostess out of business. TastyCake, Krispi Kreme, and Dairy Queen are going to be next.