Hostess

[Roark]

It should be noted that Hostess was in dire straits (filed for bankruptcy twice) prior to this strike. I suppose it is debatable whether the unions made the restructuring of Hostess difficult (or impossible) before the strike.

 

I see a lot of folks in HuffPost comments blaming the executives for giving themselves rediculous raises prior to their filing for bankruptcy. However, as I understand it, the exectutives in question were released and the current management (with the exception of the CEO: $100,000/month) was working for an extremely reduced wage until the company cleared bankruptcy. Also, even if the executive wages were in bad tase, and likely eroded the relationship with the unions, their monetary value was probably not enough to make a significant difference in a corporation worth ~$2.5 billion.

 

The deal (reasonable or not) presented by Hostess was one suggested by their hedge fund lenders and approved by bankruptcy court. The Teamsters took the deal, the baker's union did not and thus, collectively, decided to forfeit the jobs of everyone at the company, as Hostess was very clear on their intentions leading up to today.

 

Details on the proposed deal for anyone who cares (from this link):

 

Late in the summer, the Teamsters and Hostess reached a restructuring deal that included an immediate 8% wage cut, adoption of work rules more favorable to the company, decreased employer contributions for health insurance, and drastic reductions in Hostess contributions to multiemployer pension plans....

 

...For their part, the unions would receive two seats on a restructured nine-member board of directors and 25% of equity. That made the unions part of Hostess capital structure for the first time.

[Junior]

Of course, it is easy to blame the unions. Shame no one is talking about the CEO giving himself a 300% raise.

http://www.dailykos.com/story/2012/11/14/1161679/-Hostess-lies-about-strike-causing-possible-plant-closings

[knapplc]

I would almost guarantee that some other company will pick up these lines. I doubt we've seen the last of twinkies.

will they pick up the jobs?

 

An interesting question, considering how avidly Republicans were advocating letting GM fail.

 

What is wrong for preferring that a bankrupt company accept restructuring in bankruptcy court?

 

Where was the private capital that would have been necessary to keep them afloat during that bankruptcy? Who was loaning that kind of money at that time?

[beanman]

Thanks for the memories Twinkies.

 

http://coedmagazine.com/2012/11/16/girls-eating-twinkies-42-photos/#photo=1

[Conga3]

I would almost guarantee that some other company will pick up these lines. I doubt we've seen the last of twinkies.

will they pick up the jobs?

 

An interesting question, considering how avidly Republicans were advocating letting GM fail.

 

What is wrong for preferring that a bankrupt company accept restructuring in bankruptcy court?

 

Where was the private capital that would have been necessary to keep them afloat during that bankruptcy? Who was loaning that kind of money at that time?

 

AFTER a company files for bankruptcy protection - they can obtain special financing that is less risky to the creditor. No doubt the financial climate at the time likely would require them to apply for financing through the US Treasury to cover what couldn't be obtained through private financing.

 

But the GM bailout was backwards. The US Gov "financed" them BEFORE the bankruptcy.

 

There is a very large difference between "bailout" loans and bankruptcy financing.

 

--

 

back to Twinkies.

[Conga3]

Of course, it is easy to blame the unions. Shame no one is talking about the CEO giving himself a 300% raise.

http://www.dailykos....-plant-closings

 

CEO's don't "give" themselves raises. The board does this.

 

And your point is what? The CEO's salary is to blame for the bankruptcy? Not a union that rejected the court ordered restructuring?

 

If you think corporations are evil because you watch Hollywood movies where the bad guys are the evil CEOs trying to crush the small guys.... then maybe you automatically think the CEO receiving a raise from the board is just a bunch of evil dudes sitting round trying to figure out how to screw over their workers. If this is you, I suggest you subscribe to the Wall Street Journal, and put down the comic books.

 

It surely couldn't be a performance based raise....or a raise meant to keep him from stepping down because the board felt he was the guy they needed to make things right.

 

Put into football terms, imagine the CEO as head coach, and the athletic director + university + boosters as the board of directors.

 

Why do you give coaches big raises? Cause they perform well and you want them to stick round longer.

 

The union using the CEO's salary as an excuse to not renegotiate compensation is laughable and demonstrates lack of understand how business works.

 

It'd be like Nebraska only paying Bo $250K /yr because he hasn't won a championship... completely ignoring his market value, actual performance and the fact he could get hired away by another school.

[knapplc]

 

Where was the private capital that would have been necessary to keep them afloat during that bankruptcy? Who was loaning that kind of money at that time?

 

AFTER a company files for bankruptcy protection - they can obtain special financing that is less risky to the creditor. No doubt the financial climate at the time likely would require them to apply for financing through the US Treasury to cover what couldn't be obtained through private financing.

 

But the GM bailout was backwards. The US Gov "financed" them BEFORE the bankruptcy.

 

There is a very large difference between "bailout" loans and bankruptcy financing.

 

--

 

back to Twinkies.

 

That's a wonderful post that does nothing to answer the question of who was going to loan GM the money to stay afloat at that time. This revisionist history where the money was just sitting there waiting to be loaned out, but instead the U.S. government swooped in to bail out GM anyway is fanciful, but not true. There was no private capital being made available.

[Conga3]

 

Where was the private capital that would have been necessary to keep them afloat during that bankruptcy? Who was loaning that kind of money at that time?

 

AFTER a company files for bankruptcy protection - they can obtain special financing that is less risky to the creditor. No doubt the financial climate at the time likely would require them to apply for financing through the US Treasury to cover what couldn't be obtained through private financing.

 

But the GM bailout was backwards. The US Gov "financed" them BEFORE the bankruptcy.

 

There is a very large difference between "bailout" loans and bankruptcy financing.

 

--

 

back to Twinkies.

 

That's a wonderful post that does nothing to answer the question of who was going to loan GM the money to stay afloat at that time. This revisionist history where the money was just sitting there waiting to be loaned out, but instead the U.S. government swooped in to bail out GM anyway is fanciful, but not true. There was no private capital being made available.

 

Read post BEFORE reply works better.

 

If it's still not clear after all the bold and colors added.

 

The who you are asking for is still likely the US Treasury. I was agreeing with you on that point.

 

The difference is whether the loan is made as part of a bailout package pre-bankrupcy or part of a post-bankruptcy financing loan.

 

Us evil right-wing Republicans weren't against the US Gov being a part "saving" GM. It's how it was done that we don't agree with.

 

It's one thing to be the creditor financing a bankruptcy where the courts determine how the company is restructured and what happens to the debt.

 

It's another thing entirely bypassing the bankruptcy process and the Gov taking on the role of a bankruptcy court but without US Law to guide how the debt is handled.

[knapplc]

So, after asking twice and getting the same non-answer twice (despite the pretty colors, bold and underlining) are we ready to agree at this point that there was no private equity available for this magic bankruptcy? Or do we need some italics or larger fonts first?

 

We can Monday-Morning-Quarterback this decision all we want. Bottom line is, GM is alive today because of the bailout. Is it a perfect solution? Absolutely not, and nobody likes it. But it worked - to the tune of saving about a million jobs in direct production and indirect production support. It's amusing to see how much that still hurts, but we aren't going to rewrite history because of it.

[Conga3]

 

I like Zebra Cakes

[knapplc]

I like Zebra Cakes

 

Good news! They'll likely be around when you get your next craving:

 

The tasty cream-filled golden spongecakes are likely to survive, even though their maker will be sold in bankruptcy court.

 

Hostess Brands Inc., baker of Wonder Bread as well as Twinkies, Ding Dongs and Ho Ho's, will be in a New York bankruptcy courtroom Monday to start the process of selling itself.

 

The company, weighed down by debt, management turmoil, rising labor costs and the changing tastes of America, decided on Friday that it no longer could make it through a conventional Chapter 11 bankruptcy restructuring. Instead, it's asking the court for permission to sell assets and go out of business.

 

But with high brand recognition and $2.5 billion in revenue per year, other companies are interested in bidding for at least pieces of Hostess. Twinkies alone have brought in $68 million in revenue so far this year, which would look good to another snack-maker.

 

LINK

[carlfense]

The other side of the story . . . in case anyone wonders why the union was on strike:

After securing our hourly cash from the bankruptcy judge they set out on getting approval to force a new contract on us. They had already refused to negotiate outside of court. They received approval from the judge to impose the contract then turned it over to the Union for a vote. You read that right, they got it approved by the judge before ever showing to the Union.

What was this last/best/final offer? You'd never know by watching the main stream media tell the story. So here you go...

1) 8% hourly pay cut in year 1 with additional cuts totaling 27% over 5 years. Currently, I make $16.12 an hour at TOP rate of pay in the bakery. I would drop to $11.26 in 5 years.

2) They get to keep our $3+ an hour forever.

3) Doubling of weekly insurance premium.

4) Lowering of overall quality of insurance plan.

5) TOTAL withdrawal from ALL pensions. If you don't have it now then you never will.

Remember how I said I made $48,000 in 2005 and $34,000 last year? I would make $25,000 in 5 years if I took their offer.

It will be hard to replace the job I had, but it will be easy to replace the job they were trying to give me.

That $3+ per hour they steal totaled $50 million last year that they never paid us. They sold $2.5 BILLION in product last year. If they can't make this profitable without stealing my money then good riddance.

 

I keep hearing how this strike forced them to liquidate. How we should just take it and be glad to have a job. What an unpatriotic view point. The reason these jobs provided me with a middle class opportunity is because people like my father in law and his father fought for my Union rights. I received that pay and those benefits because previous Union members fought for them. I won't sell them, or my coworkers, out.

http://www.dailykos.com/story/2012/11/18/1162786/-Inside-the-Hostess-Bankery

[ZRod]

Of course, it is easy to blame the unions. Shame no one is talking about the CEO giving himself a 300% raise.

http://www.dailykos....-plant-closings

 

CEO's don't "give" themselves raises. The board does this.

 

And your point is what? The CEO's salary is to blame for the bankruptcy? Not a union that rejected the court ordered restructuring?

Even without Carl's post up there, it still begs the question why CEO's and executives are receiving raises when their companies are floundering and they're laying off workers or near liquidation? But his post just strengthens the argument, how is this possible and why does it keep happening?

[BigRedBuster]

The other side of the story . . . in case anyone wonders why the union was on strike:

After securing our hourly cash from the bankruptcy judge they set out on getting approval to force a new contract on us. They had already refused to negotiate outside of court. They received approval from the judge to impose the contract then turned it over to the Union for a vote. You read that right, they got it approved by the judge before ever showing to the Union.

What was this last/best/final offer? You'd never know by watching the main stream media tell the story. So here you go...

1) 8% hourly pay cut in year 1 with additional cuts totaling 27% over 5 years. Currently, I make $16.12 an hour at TOP rate of pay in the bakery. I would drop to $11.26 in 5 years.

2) They get to keep our $3+ an hour forever.

3) Doubling of weekly insurance premium.

4) Lowering of overall quality of insurance plan.

5) TOTAL withdrawal from ALL pensions. If you don't have it now then you never will.

 

Remember how I said I made $48,000 in 2005 and $34,000 last year? I would make $25,000 in 5 years if I took their offer.

It will be hard to replace the job I had, but it will be easy to replace the job they were trying to give me.

That $3+ per hour they steal totaled $50 million last year that they never paid us. They sold $2.5 BILLION in product last year. If they can't make this profitable without stealing my money then good riddance.

 

I keep hearing how this strike forced them to liquidate. How we should just take it and be glad to have a job. What an unpatriotic view point. The reason these jobs provided me with a middle class opportunity is because people like my father in law and his father fought for my Union rights. I received that pay and those benefits because previous Union members fought for them. I won't sell them, or my coworkers, out.

http://www.dailykos....Hostess-Bankery

 

 

So, let me get this straight. Being unemployed is better than taking this?

[sd'sker]

The other side of the story . . . in case anyone wonders why the union was on strike:

After securing our hourly cash from the bankruptcy judge they set out on getting approval to force a new contract on us. They had already refused to negotiate outside of court. They received approval from the judge to impose the contract then turned it over to the Union for a vote. You read that right, they got it approved by the judge before ever showing to the Union.

What was this last/best/final offer? You'd never know by watching the main stream media tell the story. So here you go...

1) 8% hourly pay cut in year 1 with additional cuts totaling 27% over 5 years. Currently, I make $16.12 an hour at TOP rate of pay in the bakery. I would drop to $11.26 in 5 years.

2) They get to keep our $3+ an hour forever.

3) Doubling of weekly insurance premium.

4) Lowering of overall quality of insurance plan.

5) TOTAL withdrawal from ALL pensions. If you don't have it now then you never will.

 

Remember how I said I made $48,000 in 2005 and $34,000 last year? I would make $25,000 in 5 years if I took their offer.

It will be hard to replace the job I had, but it will be easy to replace the job they were trying to give me.

That $3+ per hour they steal totaled $50 million last year that they never paid us. They sold $2.5 BILLION in product last year. If they can't make this profitable without stealing my money then good riddance.

 

I keep hearing how this strike forced them to liquidate. How we should just take it and be glad to have a job. What an unpatriotic view point. The reason these jobs provided me with a middle class opportunity is because people like my father in law and his father fought for my Union rights. I received that pay and those benefits because previous Union members fought for them. I won't sell them, or my coworkers, out.

http://www.dailykos....Hostess-Bankery

 

 

So, let me get this straight. Being unemployed is better than taking this?

it looks like hostess got bain'd.