Twinkies, Ding Dongs Maker Hostess Liquidates Following Failure To Resolve Labor Union Animosity

Tyler Durden's picture




 

Hostess Brands, the company better known as the maker of Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, and of course Wonder Bread and Twinkies, and which previously survived one multi-year Chapter 11 bankruptcy process, when it operated as Interstate Bakeries, has just made a splash at the NY Southern Bankruptcy court, for the last time, with a liquidation filing. The reason: insurmountable (and unfundable) difference in the firm's collective bargaining agreements and pension obligations, which resulted in a crippling strike that basically shut down the company. In other words, Twinkies may well survive the nuclear apocalypse, but there was one weakest link: the company making them, was unable to survive empowered labor unions who thought they had all the negotiating leverage...  until they led their bankrupt employer right off liquidation cliff. Will attention now turn to that another broke government entity, the Pension Benefit Guarantee Corp (PBGC), which will have to step in to resuscitate some 18,000 pension plans which suddenly vaporized after labor unions took their "negotiating" freedom a step too far.

From the filing:

Beginning on October 21, 2012, the Debtors began implementing the modifications to the CBAs. On November 7, 2012, the Debtors began to receive strike notices from various local unions affiliated with the BCT. On November 8, 2012, the Debtors received a strike notice from the IUOE. Between November 9 and November 13, 2012, various local unions affiliated with the BCT commenced strikes at 12 of the Debtors' bakeries. At another 12 bakeries, picket lines were set up by striking BCT workers, and certain BCT and other unionized workers at those bakeries chose to honor the picket lines by not reporting for work. As a result, production was significantly disrupted at the 24 bakeries impacted by the Strikes; however, many of the impacted bakeries remained operational to varying degrees due to management filling in for production workers and, in some plants, high numbers of employees crossing picket lines.

 

Since the strikes (the "Strikes") were commenced, the Debtors have urged striking employees to return to work. Unfortunately, at this time, thousands of the Debtors' employees continue to participate in or honor the Strikes. As a result, a sufficient number of the Debtors' baking facilities have become inoperable, and the Debtors are no longer able to fulfill customer orders or sell product at their retail stores. Because of the material impairment of the Debtors' business operations, the Debtors will soon lose access to the funding necessary to operate their businesses, and the Debtors will have triggered certain remedial provisions of the final DIP Order. As a result, the Debtors are beginning to take steps to wind down their business  operations, including the relief requested in this Motion.

In other words, the labor unions representing 18,000 workers fought the company, and the unions won... A very pyrrhic victory. Sadly, they are all now out of a job as the unionized victory just happened to lead to the terminal winddown of their employer.

As to the future of the iconic brands, fear not: Hostess' numerous brands will be bought in a stalking horse auction by willing private buyers, however completely free and clear of all legacy labor and pension agreements which ultimately led to the company's liquidation.

Now if only Hostess had raised taxes... (because they tried cutting spending, and liquidation followed).

Finally, those 18,500 new initial jobless claims next week? Sandy's fault.

Full winddown motion:

 

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Fri, 11/16/2012 - 08:26 | 2987073 Mae Kadoodie
Mae Kadoodie's picture

Fuck you Yellen, taking away my Twinkies.

Fri, 11/16/2012 - 08:29 | 2987078 gaoptimize
gaoptimize's picture

This may be the last we see of Janet Calmly 'Splainin.

Fri, 11/16/2012 - 08:35 | 2987096 GetZeeGold
GetZeeGold's picture

 

 

Welcome to McDonald's. Here's your Big Mac. With sales tax and your Obamacare surcharge....that will be $50.

Fri, 11/16/2012 - 08:45 | 2987129 ghengis86
ghengis86's picture

Sucks for those who crossed the picket lines to work. I bet they a powerful lesson too

Fri, 11/16/2012 - 08:49 | 2987144 Atlas_shrugging
Atlas_shrugging's picture

Clearly this was a revenue problem.

Fri, 11/16/2012 - 08:56 | 2987160 MillionDollarBonus_
MillionDollarBonus_'s picture

This only the beginning. The workers are rising up against the capitalists trying to sell us expensive goods and offer us low wage jobs. We’re going to SHUT THESE BASTARDS DOWN one by one until we get what we want. The people want RAISES and they don’t care where the money comes from. This is the start of the progressive revolution. Capitalism and entrepreneurship is dead, and the golden age of collective bargaining has begun.

Fri, 11/16/2012 - 09:03 | 2987180 krispkritter
krispkritter's picture

How about the age of 'collective shut the fuck up'? Works for me...

Fri, 11/16/2012 - 09:53 | 2987376 Manthong
Manthong's picture

A collectivist union victory song:..

Ding Dong the Company’s Dead!

Fri, 11/16/2012 - 10:03 | 2987419 krispkritter
krispkritter's picture

Ho ho, ho ho, I've got no job you know...

Fri, 11/16/2012 - 10:25 | 2987509 gmrpeabody
gmrpeabody's picture

We won..., WE WON..., I think...

Fri, 11/16/2012 - 10:27 | 2987515 GetZeeGold
GetZeeGold's picture

 

 

The good news is we won.

 

The bad news is......we won.

Fri, 11/16/2012 - 10:39 | 2987562 The Limerick King
The Limerick King's picture

 

 

Twinkies have bitten the dust

Hostess is formally bust

No Ho Hos - a shame

So who is to blame?

The union demands were unjust...

Fri, 11/16/2012 - 10:47 | 2987593 DaveyJones
DaveyJones's picture

twinkies, ding dongs, ho-hos

is this a congressional piece?

Fri, 11/16/2012 - 11:01 | 2987654 Enslavethechild...
EnslavethechildrenforBen's picture

End the Fed, end the Counterfeiting. Buy Precious metals and use them as a means of exchange

Fri, 11/16/2012 - 11:05 | 2987677 Atlas_shrugging
Atlas_shrugging's picture

This is so simple.  Just raise the price of Twinkies on those who can afford to pay a little more.  Crisis averted.

Fri, 11/16/2012 - 11:21 | 2987751 FEDbuster
FEDbuster's picture

Denny's has announced a 5% Obamacare surcharge will be added to your tab starting next year.  Today is support Papa Johns Day.  Friday is a good day for pizza, let them know you support freedom of speech.  In an era of lies, the truth becomes treason.

Fri, 11/16/2012 - 13:12 | 2988410 fourchan
fourchan's picture

the creamy filling cliff?

Fri, 11/16/2012 - 13:14 | 2988421 RockyRacoon
RockyRacoon's picture

It has been scientifically demonstrated that a Twinkie has the same qualities as precious metals and we should look to using them as currency.  Everybody knows that a Twinkie from the 1960s is still edible:

As Ron Paul points out:

"Gold satisfies all the properties of money. It is durable, portable and easily divisible into bars and coins that share uniform properties. It is easily recognizable through visual, tactile, chemical and other means. Gold's value and purchasing power are stable over time, as its supply grows slowly and it cannot be created ad infinitum as paper or digital currency can be."

And now that the Twinkie factories are bust, they can't be duplicated ad infinitum like paper money!

http://www.nytimes.com/roomfordebate/2011/08/02/should-central-banks-buy...

Fri, 11/16/2012 - 11:05 | 2987672 redpill
redpill's picture

Sounds like the last time I partied with the Secret Service guys in Columbia.

Great job, union! You really showed them. Striking because the company stopped contribution to your pension? YOUR PENSION? You make Twinkies and you want a fucking pension? Well guess what, you don't get shit now, great fuckin job Ding Dongs.

Fri, 11/16/2012 - 11:13 | 2987694 DaveyJones
DaveyJones's picture

you know, it occured to me that there is an inverse relationship to the number of twinkies you eat and your need for a pension

frosted perks   -  problem solved

Fri, 11/16/2012 - 10:04 | 2987426 Dr. Richard Head
Dr. Richard Head's picture

If the employees in my company had to receive collective raises, the only ones that would be penalized would be those that are doing a superior job.  They would not receive the raises that are indiciative of their performance and all possible revnues available for raises would be socialized amongst their weaker peers.  I would be pissed if I were one of the top producers.  Too bad the union dues would eat up most of the raise that was now collectively available.  Some people are fucking stupid.

Fri, 11/16/2012 - 10:26 | 2987484 Jay Gould Esq.
Jay Gould Esq.'s picture

Pity, truly. 

Now a chap cannot even get a decent Devil Dog any longer. Yet one more piece of the America that was, -- that we knew as a child -- is now passing into history.

http://upload.wikimedia.org/wikipedia/commons/thumb/b/b0/Drakes-Devil-Do...

Fri, 11/16/2012 - 10:52 | 2987618 smithcreek
smithcreek's picture

Just like Hostess bought Drakes, someone will buy Hostess and Twinkies will live on.  Devil Dogs?  We'll see if they have staying power.

Fri, 11/16/2012 - 11:14 | 2987692 spastic_colon
spastic_colon's picture

yes...an overseas company, or a new corporation created from the old one that makes their product overseas, thereby side-stepping the US and their restrictive labor issues, leaving the 18,500 still out of work.....they did not win

Fri, 11/16/2012 - 12:02 | 2987828 El Viejo
El Viejo's picture

The real fireworks will begin when Wisconsin-like showdowns occur across the country - when public 'servants' find out their Cadilac retirement plans will not be (and really are not now) funded and they will have to accept less. There may be safety in numbers to a degree, but not when those(75% who have no pension ) are forced to pay for the cadilac pensions for the (25%) by being increasingly taxed to pay for the priviledged class. It simply will not happen. Plan on working like my mom till 81 at least if you can keep your job. THERE ARE NO GUARANTEES IN LIFE.

BTW some states have laws that prevent the raising of taxes to keep public pension plans solvent.

.

Fri, 11/16/2012 - 09:04 | 2987182 Shocker
Shocker's picture

Totally sad to see either way. That is a lot of people now out of work, not including the mom/pop business that supplied them with inventory.

Really wow at this moment

http://www.dailyjobcuts.com

Fri, 11/16/2012 - 09:15 | 2987228 Big Slick
Big Slick's picture

KEY TAKE-HOME INFORMATION in this situation is the time elapsed:  Oct 21 - November 15...

25 DAYS!

For those like me, constantly wondering how long 'it' will take.  We now know that the answer is 'less than a month.'

Fri, 11/16/2012 - 09:21 | 2987261 old naughty
old naughty's picture

Oh crap, 25 days to lose the filing (eh, I mean fillings, I like them Twinkes, with 25 days shelf life).

Fri, 11/16/2012 - 09:38 | 2987310 krispkritter
krispkritter's picture

The only Twinkies, Ho Ho's, and Ding Dongs that should be going extinct are in DC...and I think Barney Frank fits all three(ok, maybe four with lube...)

Fri, 11/16/2012 - 09:49 | 2987361 francis_sawyer
francis_sawyer's picture

So now, as always, that we've reached the point that some money printing jews will buy all the assets for pennies on the worthless dollar, does this mean I'm going to have to eat 'kosher' ho-ho's & circumcized ding dongs?...

Fri, 11/16/2012 - 10:17 | 2987472 Slewburger
Slewburger's picture

Barney Frank will go into terminal depression now that his favorite black dongs are no longer available.

Fri, 11/16/2012 - 11:24 | 2987761 DaveyJones
DaveyJones's picture

oh, you beat me to it. I hear Barney once had three twinkies at once 

Fri, 11/16/2012 - 09:45 | 2987342 GeezerGeek
GeezerGeek's picture

Somewhere, Mayor Bloomberg is smiling.

Fri, 11/16/2012 - 09:50 | 2987365 L0nG-DoNg-SiLv3R
L0nG-DoNg-SiLv3R's picture

But I thought the only things tht would survive 'it' would be twinkies and roaches?!

http://youtu.be/V13CZnUCOaQ

Fri, 11/16/2012 - 10:04 | 2987423 ElvisDog
ElvisDog's picture

Totally sad to see either way. That is a lot of people now out of work, not including the mom/pop business that supplied them with inventory

This is totally sad in the same way that it's sad that a guy died who put a gun in his mouth and pulled the trigger. The unions and their presumably high-paid negotiators literally threw their members under the bus. They were told by Hostess management exactly what would happen if they continued on their current path, they said "fuck you, give us what we want", and the company liquidated. Way to go, union bosses. Bet your members are glad they've been paying you thousands of dollars in union dues every year.

Fri, 11/16/2012 - 09:10 | 2987201 LawsofPhysics
LawsofPhysics's picture

Yes, and now, just like the former soviet union, the "golden age of starvation and death shall begin" - fixed

Fri, 11/16/2012 - 09:12 | 2987208 zuuma
zuuma's picture

 

   

WONDER BREAD!

Builds strong bodies, 12 ways!


The newly-unemployed strikers sure got to eat it today, huh?

Too bad the recipe forgot about the mind thing. Stronger minds might have helped, here.

Fri, 11/16/2012 - 09:13 | 2987211 Aghast in Midlothian
Aghast in Midlothian's picture

Are you a paid troll? Only reason I can see someone doubling down on stupid like this. 

Ah well, when the Progressives really get their head and begin eugenics, this sort of stupidity will be filtered out of the gene pool. 

Fri, 11/16/2012 - 09:26 | 2987277 Urban Roman
Urban Roman's picture

I believe the consensus view is that M$B is not paid, but is doing this for fun.

Fri, 11/16/2012 - 09:46 | 2987349 jayman21
jayman21's picture

I will second that.  Today was not one of his better works.  Normally, he is spot on with his sarcasm.

Fri, 11/16/2012 - 10:30 | 2987525 gmrpeabody
gmrpeabody's picture

Still..., not a bad performance. He's got to newbies climbing up the walls.

Fri, 11/16/2012 - 10:45 | 2987586 jayman21
jayman21's picture

It never gets old!!!!

Fri, 11/16/2012 - 09:28 | 2987287 Slightly Insane
Slightly Insane's picture

How'd that work out for you in Cuba, well maybe not Cuba.  How about Russia, well, maybe no ... not Russia.  How about China .... yeah China?  I think that fellow Mao had to "eliminate" a few folks along the way .... they kind of well, got in the way ..... How many was it?   What were the subsequent years like after he did that?  I'm pretty sure that they have moved away from Communism to Capitalism more then the US of A .... you might want to look into that?

Fri, 11/16/2012 - 09:45 | 2987341 Sauk Leader
Sauk Leader's picture

MDB I was shocked to see no reference to the great work by Michelle Obama to get people to eat healthier. This is a great thing, she should attend the closing with a MISSION ACCOMPLISHED banner over the factory as is auctions off the equipment.

Fri, 11/16/2012 - 11:17 | 2987739 camaro68ss
camaro68ss's picture

Michelle Obama is taking the last shipment of Ho Ho's to the white house so she can stuff her fat face as shes shaking her finger at you and telling you to eat a saled

Fri, 11/16/2012 - 09:50 | 2987366 AnAnonymous
AnAnonymous's picture

A progressive revolution? But 'American' endeavours are all progressive. 'Americanism' has been bringing progress to the whole humanity.

Funny how 'Americans' would like to escape the spot lights.

Dont worry though, it is an 'american' world and as much as you would want some others to star, 'americans' are the only stars. Stop the redistribution of the fame, glory and honours.

All that belong to 'americans' in the making of this current situation shall return to 'americans'.

And that is a damned lot.

Fri, 11/16/2012 - 10:22 | 2987493 RSBriggs
RSBriggs's picture

AnAnonymous isn't nearly as funny as MDB....  -1

Fri, 11/16/2012 - 09:58 | 2987399 LawsofPhysics
LawsofPhysics's picture

"and the golden age of poverty and starvation has begun" - fixed  (i.e. see the former soviet union)

 

This can't be said enough, go long black markets.

Fri, 11/16/2012 - 10:44 | 2987583 aerojet
aerojet's picture

Enough with the trolling, it's too easy on here lately.

Fri, 11/16/2012 - 10:49 | 2987602 Dre4dwolf
Dre4dwolf's picture

You collectivist people are out of your mind, "We want raises we dont care where money comes from" lol

How much money could they possibly be making selling twinkies for 75 cents, thats hardly and overpriced product.

 

To these dumb-ass union workers who sat there and protested themselves out of a job... have fun on vacation.

 

Go-ahead destroy the few companies still standing!

 

PS: I vote for a bailout for the twinkie industry, they can use the money to ship jobs to china it will have the added benefit of making twinkes cheaper!

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