Hostess Defeats Unions, Americans Win, Twinkies are BACK!

[djAdvocate]

Jun 28, 2013 19:29:47 GMT -5 @patstab said:

So how can this be resolved?

there are two ways it can be resolved.  one is by a cultural shift back toward workers and away from management.  that would be what i would call an "organic" shift.

the second is by some sort of governmental action which tied wages to productivity.  this would be viewed as meddlesome by corporate America, and is extremely unlikely to happen.

it is easy to get hopeless looking at those two options.

[djAdvocate]

Jun 29, 2013 1:59:24 GMT -5 Value Buy said:

Jun 28, 2013 19:57:48 GMT -5 billisonboard said:

The economy of the United States does not operate in a vacuum. It is necessary to look at the world economy to understand what has changed. Significant percentages of the real "middle class" have moved overseas. The United States has used debt, public and private, to artificially prop up a "middle class" in this country. If by "resolved" you mean a return to the state that the US economy was in following WWII, it can't be "resolved".

Funny coincidence.
The owner of the business in China that was held captive this week-upon his release and return stateside he told CNBC today, that China is facing rising labor cost of hourly workers and a lack of a skilled workers, and it is now cheaper to move his business to other poorer countries and find a cheaper wage rate.
 I know some companies are actually returning production partially back the USA because costs in China are no longer, "dirt cheap" and between labor and transportation costs, it behooves them to produce it here.

ib and i had a conversation about this a month ago.  if the figures he posted are correct, and i have no reason to think they are not, the wages are cheaper in MEXICO now than in most of China.

[frankq]

Can you back that up?

Yeah, I can....


Hostess Brands acknowledged for the first time in a news report Monday that the company diverted workers' pension money for other company uses.

The bankrupt baker told The Wall Street Journal that money taken out of workers' paychecks, intended for their retirement funds, was used for company operations instead. Hostess, which was under different management at the time the diversions began in August 2011, said it does not know how much money it took.

"It's not a good situation to have," Hostess CEO Gregory Rayburn told the WSJ.

"Whatever the circumstances were, whatever those decisions were, I wasn't there," Rayburn added. As the founder and owner of Kobi Partners, a restructuring advisory firm, Rayburn was appointed acting CEO in March 2012.

Hostess Brands, which filed for bankruptcy for a second time in January, started liquidating its operations in November after the bakers' union refused to take another pay cut and went on strike. The liquidation will leave about 18,000 workers without jobs.

In November, a judge approved Hostess' plan to pay $1.8 million in bonuses to 19 executives, according to CNBC. Rayburn declined to take a bonus but also avoided a company-wide pay cut that he imposed, Hostess told HuffPost.

www.huffingtonpost.com/2012/12/10/hostess-pensions-diverted_n_2271868.html
www.justicenewsflash.com/2012/12/11/hostess-workers-lose-pensions-amid-bankruptcy-issues_20121211108303.html

Yeah, those greedy bastard workers.....Interesting what you find if you just look....And you wonder why employees had issues. Yes, apparently the employees were paying directly toward company operations. So lets see...workers had already taken pay cuts previously as well as benefit cuts, had their 401K money swindled while the top execs got their bonuses,, and you can say that they are the greedy ones in this deal? I would suggest a little more research. And speaking of research, check this one:

crooksandliars.com/karoli/hostess-employee-tells-all-about-ceo-guttin

Yeah, congrats on that win America.....

[djAdvocate]

well done, franq.  why these guys weren't sent to jail for this is confusing.

[Deleted]

Jun 29, 2013 22:39:23 GMT -5 frankq said:

Can you back that up?

Yeah, I can....


Hostess Brands acknowledged for the first time in a news report Monday that the company diverted workers' pension money for other company uses.

The bankrupt baker told The Wall Street Journal that money taken out of workers' paychecks, intended for their retirement funds, was used for company operations instead. Hostess, which was under different management at the time the diversions began in August 2011, said it does not know how much money it took.

"It's not a good situation to have," Hostess CEO Gregory Rayburn told the WSJ.

"Whatever the circumstances were, whatever those decisions were, I wasn't there," Rayburn added. As the founder and owner of Kobi Partners, a restructuring advisory firm, Rayburn was appointed acting CEO in March 2012.

Hostess Brands, which filed for bankruptcy for a second time in January, started liquidating its operations in November after the bakers' union refused to take another pay cut and went on strike. The liquidation will leave about 18,000 workers without jobs.

In November, a judge approved Hostess' plan to pay $1.8 million in bonuses to 19 executives, according to CNBC. Rayburn declined to take a bonus but also avoided a company-wide pay cut that he imposed, Hostess told HuffPost.

www.huffingtonpost.com/2012/12/10/hostess-pensions-diverted_n_2271868.html
www.justicenewsflash.com/2012/12/11/hostess-workers-lose-pensions-amid-bankruptcy-issues_20121211108303.html

Yeah, those greedy bastard workers.....Interesting what you find if you just look....And you wonder why employees had issues. Yes, apparently the employees were paying directly toward company operations. So lets see...workers had already taken pay cuts previously as well as benefit cuts, had their 401K money swindled while the top execs got their bonuses,, and you can say that they are the greedy ones in this deal? I would suggest a little more research. And speaking of research, check this one:

crooksandliars.com/karoli/hostess-employee-tells-all-about-ceo-guttin

Yeah, congrats on that win America.....

Pffft...why you digging up facts when it is just so much more fun to say "Merica WON!!!! Twinkies are BACK!!!"

Facts have no place in this argument Franq!

[AgeOfEnlightenmentSCP]

I appreciate the follow up franq- it's a pretty serious accusation and I hadn't read this before, so I wanted to know where you got it.  I agree that's "not a good situation to have", and I'm wondering why it's not criminal, and why nobody is facing prosecution for that?  You'll never find me OK with stealing- no matter who's doing it.

[AgeOfEnlightenmentSCP]

There's a reason we moved away from defined benefit plans to defined contribution plans in the private sector.  Defined benefit plans were never really sustainable.  You can't make guarantees of the magnitude unions are looking for.  Hostess employees are not the first to be shorted when it comes to pensions.  

[frankq]

I appreciate the follow up franq- it's a pretty serious accusation and I hadn't read this before, so I wanted to know where you got it. I agree that's "not a good situation to have", and I'm wondering why it's not criminal, and why nobody is facing prosecution for that? You'll never find me OK with stealing- no matter who's doing it.

Fair enough. I think it's a case of investors taking an 80's approach to the company and knowing that this particular company could bring more money in from breaking it up than anything else. It's not the first time people have run companies into the ground and sold off the rights. It's a shame, because these products will be made by labor just a cut above "sweatshop". If we don't pay people a decent wage in this country, we can't grow as a country. I don't see a lot of economic expansion if we're going to focus on a $10/hr workforce. Just my opinion...

[AgeOfEnlightenmentSCP]

Jul 1, 2013 23:58:52 GMT -5 @patstab said:

And the government or should I say the taxpayers will be on the hook for the pensions owed.  Amazing management never gets the shaft, they will just move on to take another company down, bastards.

Management are like locusts, eh?  Interesting theory.  The really interesting thing about that theory is that liberals actually ARE like locusts, their plague has overtaken whole states- California, Illinois, and New York- who do you think will be picking up the tab for the pensions of Illinois state employees?  What about cities like Detroit that have been destroyed by the Democrat-union cabal?  Oh, now- state employee unions, and private sector unions who operate as legal extortion rackets with the quite literal force of the government behind them can never do any wrong.  It's always management.

[Deleted]

 "Let them eat cake."

[frankq]

What about cities like Detroit that have been destroyed by the Democrat-union cabal? Oh, now- state employee unions, and private sector unions who operate as legal extortion rackets with the quite literal force of the government behind them can never do any wrong. It's always management.[/b

Really Paul? Private employee unions are operating with "the quite literal force of the government"? Where and when? If that were the case, WalMart would be unionized. I'm throwing the "full of s--t" card on you now.....

Detroit: Automakers and workers bargained and came to agreements for several decades. That included pensions. The automakers were obligated to fund pensions, but as with Hostess, not only underfunded plans, but actually used pension money to fund operations. OOOOps. Unfortunately, as a Single Employer Plan, they are legally, though not morally, able to do this. As a union member and former officer, I can tell you that we fund not only our pensions but also our health benefits directly from our gross comp amount and we do this through member meetings and voting. We are not reliant on taxpayers for a penny. Automakers dropped the ball on business and failed to provide the products people wanted at the time they wanted them. That and the fact that cars are made in Canada, Mexico, and the South killed Detroit. That, and the fact that many of the countries that export cars here have socialized medical, one less thing for companies to worry about there.. But don't worry, that "pro American union government" that you're talking about is considering letting China sell cars here. That should make you happy. Then autoworkers can compete with guys making $3/hr.........

Are you saying that the U.S. Chamber of Commerce has been union friendly in recent years Paul?
Do you see any pipeline work being approved by Obama? Any nuke work? I'll bet the air traffic controllers didn't think unions were so powerful in the 80's.

Illinois is a ridiculous example of management (legislators) and employees (teachers and various municipal and state employees)sharing the same benefits which included bonuses in the last 3 years of employment and then computing pensions based on those 3 highest earning years 9huge unfunded liability)which they failed to even fund at all in several years, and which is Constitutionally guaranteed by taxpayers. Are you talking about that pension Paul? The one with automatic 3% c.o.l. increases? The one destroyed by legislators aka employers? Just so you know, the recent "fixes" to the Illinois pension includes 401K proposals, that legislators WILL NOT be part of. It seems that now the pension or "defined benefit plan" is good for them, but not for everyone else.

Remember United and bankruptcy? Remember what happened to the workers pensions? Cut. Do you know what happened to executive pensions? Nothing. They were placed in trust protected from bankruptcy. Your anti-labor bias shows more than the hem of your slip. You don't know what you're talking about. You problem is that you think that anybody that works with their hands is barefoot and uneducated and only worthy of $12/hr.

[thyme4change]

[AgeOfEnlightenmentSCP]

What about cities like Detroit that have been destroyed by the Democrat-union cabal? Oh, now- state employee unions, and private sector unions who operate as legal extortion rackets with the quite literal force of the government behind them can never do any wrong. It's always management.[/b

Really Paul? Private employee unions are operating with "the quite literal force of the government"? Where and when? If that were the case, WalMart would be unionized. I'm throwing the "full of s--t" card on you now.....

Well, they had help from state and local government.  Detroit's unbroken string of Democrat administrations gave unions the keys to the city, and now there's nothing left.  I'm not saying that there aren't other factors that were hurting Hostess, and in particular the Twinkie.  However, what KILLED hostess is the same thing that has killed the auto industry, and the same thing that has destroyed every liberal state and city in the country:  while the share owners and the boards of directors are appointing management to deal with the problems and pressures facing a business- especially one like Hostess where national, and even global trends are working against the company- the unions fail to acknowledge- or even recognize- when the party is over.  To hear unions and their supporters tell it, every problem any company faces can be solved by cutting executive compensation.  I can state categorically, that is never- in the true sense of the word never- the case.  Is management sometimes rewarded disproportionately, or rewarded when they do a poor job?  Yes.  But when compared to the kinds of compensation, benefits, and retirement deals negotiated by labor- and the tremendous cost labor represents, these are negligible in the grand scheme of things.  Hostess management needed to renegotiate their contract- and labor wouldn't budge.  Yes, Hostess had myriad other serious problems, but the stake through the heart was labor.

[djAdvocate]

Hostess needed to do some long term business planning starting about 1/4 century ago.  they failed to do that.  asking unions to pay for that mistake was absurd.

and thus, a marquis brand becomes brand only.  good...f-ing....riddance.

[AgeOfEnlightenmentSCP]

Jul 5, 2013 20:36:07 GMT -5 djAdvocate said:

Hostess needed to do some long term business planning starting about 1/4 century ago.  they failed to do that.  asking unions to pay for that mistake was absurd.

and thus, a marquis brand becomes brand only.  good...f-ing....riddance.

It is true that Hostess failed to detect and respond to the long term trends.  However, included in that oversight was a failure to negotiate sustainable labor agreements.  Labor was the beneficiary of this oversight for decades, and they should also have seen this coming- and if nothing else, squirreled away the extra, above market wages, for the inevitable rainy day.  

And you know business better than this- a brand is a commodity.  The parties that made this deal are going to make out just fine.  Twinkies are still going to be sold to those that want them.  Big labor doesn't give a crap- there are other worker's pockets to pick.  The hostess workers are the ones who lost- out of work for months while this deal comes together.  Who knows? Maybe some of them will go back to work for the same facilities under new management?  Reality bites, though.  It's tough after years of having ones wages insulated from market forces to have to join the rest of the low skill labor force in getting paid what you're worth.

[djAdvocate]

Jul 6, 2013 8:30:18 GMT -5 AgeOfEnlightenmentSCP said:

Jul 5, 2013 20:36:07 GMT -5 djAdvocate said:

Hostess needed to do some long term business planning starting about 1/4 century ago.  they failed to do that.  asking unions to pay for that mistake was absurd.

and thus, a marquis brand becomes brand only.  good...f-ing....riddance.

It is true that Hostess failed to detect and respond to the long term trends.  However, included in that oversight was a failure to negotiate sustainable labor agreements. .

TOTALLY AGREE!

ultimately, this is a management issue.  labor will always demand as much as can be borne by a business.  it is up to management to assess those demands and act in the interests of the business.  their failure to do so is NOT the fault of labor.  it is the fault of management.

[AgeOfEnlightenmentSCP]

Jul 6, 2013 12:52:45 GMT -5 djAdvocate said:

Jul 6, 2013 8:30:18 GMT -5 AgeOfEnlightenmentSCP said:

It is true that Hostess failed to detect and respond to the long term trends.  However, included in that oversight was a failure to negotiate sustainable labor agreements. .

TOTALLY AGREE!

ultimately, this is a management issue.  labor will always demand as much as can be borne by a business.  it is up to management to assess those demands and act in the interests of the business.  their failure to do so is NOT the fault of labor.  it is the fault of management.

You're arguing in circles.  Does it really matter whose fault it is?

[AgeOfEnlightenmentSCP]

Jul 5, 2013 18:20:15 GMT -5 @patstab said:

Yes, Paul wants no one but him to make money.  But if no one makes money they can't buy houses and can't afford to pay rent. 

They are supposed to have nothing and make nothing and produce like crazy but keep their mouths shut.

I can't even imagine what he must think about someone like my husband who makes a high salary and he doesn't even have a college degree. Probably considers him not worthy or something like that.

There's actually a shortage of housing right now.  Buyers can't find a house, and rents are on the rise.  I don't care about college degrees- they don't impress me one bit one way or the other.  It's what a person does with what they have that matters.  You and your hubby do not conduct your affairs a whole lot more differently than we do.  You're a little more hands-on about the landlording, but it's the same idea.  

[djAdvocate]

Jul 6, 2013 12:54:37 GMT -5 AgeOfEnlightenmentSCP said:

Jul 6, 2013 12:52:45 GMT -5 djAdvocate said:

TOTALLY AGREE!

ultimately, this is a management issue.  labor will always demand as much as can be borne by a business.  it is up to management to assess those demands and act in the interests of the business.  their failure to do so is NOT the fault of labor.  it is the fault of management.

You're arguing in circles.  Does it really matter whose fault it is?

you tell me.  you are the one blaming the unions.

[Deleted]

Touché!

[djAdvocate]

Jul 8, 2013 0:13:26 GMT -5 @patstab said:

And in the interim, workers make less and less and try to prop up their
way of life with credit cards and any way they can.  But its a lost cause unless
 something changes.  But when the elite holds all the cards, the people don't have a chance in hell. 

Hubby says we can change it at the ballot box.  I say we can't because they are paying for it all from both sides.  The outlook is not bright, dimmer then it has been in many a year.

yeah, what a great deal.  the rich took their excess profits and loaned it to the poor rather than paying them. 

[frankq]

Hostess management needed to renegotiate their contract- and labor wouldn't budge. Yes, Hostess had myriad other serious problems, but the stake through the heart was labor.

Do some research. Labor had already taken cuts in wages and benefits previously. Somewhere to the tune of 30%. Hostess wanted more, and that's after they swindled these workers out of their 401K money. The fact of the matter is, investors in Hostess had buyers at the ready if they broke up the company. They had no real need to negotiate anything. The bakers in particular, were taking the biggest hit as they were not Teamsters and not part of the Teamster pension which allowed Hostess to raid their money. Hostess maintained that they didn't have the funds to go on dealing with a strike, that lasted a week, but they had enough to pay millions to execs and managers to shut down the company...Why is it that workers get a wage for doing their jobs, but management has to get pay AND BONUSED besides?

With Hostess claiming that its union contracts were too onerous,
the Teamsters acquiesced in September to significant pay and pension cuts for workers, even though employees had agreed to concessions in Hostess' previous bankruptcy.

Now, Hostess is winding down. Publicly, management has attributed its decision directly to the bakers union strike, even though the company had plenty of problems aside from labor issues, including a customer base that has been turning away from the likes of Twinkies and Ding-Dongs for healthier foods.
www.huffingtonpost.com/2012/11/16/hostess-liquidation-teamsters-bakers-union_n_2145851.html

Yeah, unions are really enjoying government backing....

Hillard said he will be interested to see what the ripple effect of the Hostess bankruptcy will have for labor relations nationwide, as the combustion comes on the heels of scattered Republican-led efforts to weaken unions through state laws, not to mention a steady decline in leverage in the 30 years since then-President Ronald Reagan fired more than 11,000 striking air traffic controllers.

In Maine, Gov. LePage and the Republican-led Legislature in 2011 proposed so-called “right-to-work” legislation that would have allowed workers to refuse to pay dues or fees for union representation at workplaces where active unions negotiated on their behalf for wages and benefits. The bill was ultimately defeated in the face of fierce opposition by labor leaders across the state, who characterized the legislation as a “union busting” measure.
bangordailynews.com/2012/11/16/business/maines-striking-hostess-workers-say-companys-collapse-a-strong-message-of-union-resolve/

[frankq]

So....now that Hostess is back, has anyone else noticed that the Twinkies and cupcakes are 1/3 smaller, only come 8 in a box, and cost more even though they're made by cheaper labor? I thought the whole problem was those greedy union bastards and once gone, we'd get out beloved snack cakes just as they were. Yeah, those "greedy union workers" really ruined the company didn't they? I guess it's not enough that the company screwed their workers out of their 401K money, now the new guys are peddling smaller and fewer items in a box....Just goes to show you how easy it is to bullshit people and how short their memories are. Now they'll pay more for less and get one more product made with near minimum wage workers. Quite the value we're getting.......So what REALLY was the issue....

[marvholly]

frankq
I have not looked - mosly because I figgured that is what would happen. After all, these companies that bought the rights, factories & recipes have to 'make back' their investment REA quick or their shareholders will have a fit.

[zibazinski]

Seriously, people actually eat that garbage? Along with cockroaches, that preservative stuff will last past a nuclear explosion! I thought only parents that didn't care about their kids fed them that stuff. A right to work state is not the end of the world. If you have a marketable skill you can command a decent salary. If you have a skill that commands a Walmart salary, that's your choice.

[Value Buy]

Jul 8, 2013 23:40:15 GMT -5 @patstab said:

Sadly it passed in Indiana, they now have right to work.  You will be able to get a job it just won't pay anything.

So far, nothing has changed.
From what I hear, if it is a union shop a person hires in at, they fill out the union application immediately.
There have been very very very few stories of any company entering Indiana because of a Right to work law.
It still remains, from a company moving here, "how many deductions are the state and local tax entities going to give us to move there.
Case in point:
Crown Point Indiana.
FROZEN WHOLESALE BAKERY COMPANY MOVES IN, BUILDS A PLANT GETS, 10 YEARS INCREMENTAL TAX PROGRAM.
Tax deduction incentives from the state to move there, then low real estate taxes slowly rising over ten years to normal rates for the county and city coffers.
End of ten years, moves out.
Plant sits empty for a year, and another food processing company moves in, with incentives from the state, and an economic development deal from the city.
And the band plays on.............

Who loses?
The state taxpayers.

[Value Buy]

Jul 5, 2013 20:36:07 GMT -5 djAdvocate said:

Hostess needed to do some long term business planning starting about 1/4 century ago.  they failed to do that.  asking unions to pay for that mistake was absurd.

and thus, a marquis brand becomes brand only.  good...f-ing....riddance.

A major problem for Hostess and many direct store delivery companies, is not necessarily labor cost, although the drivers did work on flat hourly rate plus commission.
The cost of driving the trucks every day grew extremely high the last few years.
Gasoline and diesel has doubled in a few years. Delivery cost became unsustainable for them.
The new company has totally removed this from their costs.  Semi trucks deliver directly to the wholesalers, who deliver the product with their regular loads.
My local store told me it is delivered with their regular grocery truck deliveries, and the store orders the product on an  as needed basis.
The kicker is the Twinkies are a high demand item for them now, and has frequent out of stocks, so they order triple what they need to cover potential out of stocks on their next load.
Ain't America great?

Our local county fair had the deep fried Twinkies available.
The line was long.