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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Orly's picture

He would prefer a breakfast of bangers and kidneys with a side of Spotted Dick.

Legolas's picture

Stick to your Turkish Delight, then.  I'd take a twinkie over that any day.

I'm convinced that Turkish Delight is bleached, dried barf; probably devised by a Queen for her subjects.

moonman's picture

Thats a surprise you would think they would be easy to eat for you rotten toothed Brits

Cosimo de Medici's picture

There was a world survey taken a few years back to determine the World's Worst Cuisine.  You may be proud to know the UK came in 1st.  Philippines and Russia rounded out the top three. 

Take the Twinkies.  It's an improvement.

Temporalist's picture

Says the people who invented deep frying Twinkies and Snickers to make them taste "better".

wonderatitall's picture

about time. so tired of the producers and owners complaining. close it down, go on strike. obama and the crime lords known as "union goons" will not stop unless on break destroying and looting. let them fend for themselves , that should be a nice spectacle....bastard union thugs stabbing each other in the back for 5 cents makes a nice festival for me. 

as our gubmint lords of corruption and fat union goons shout in rage i can laugh and enjoy myself. 

end the fasciti loving democrat dictatorship and ignore the useless idiots of the repubs. 

its time for a 3rd revolution and it begins by saying fuck you obama and bankers

semperfi's picture

"obama and the crime lords known as "union goons"

formally known as The Kenyan Thug and his Union Thug Army

holdbuysell's picture

It's events like these that scream with flashing lights that the standard of living in the US will drop, regardless of how much kicking and screaming ensues.

Got Math?

flapdoodle's picture

No more Twinkies, Ding Dongs and Ho Hos.

 

Truly a black day in history...

dobermangang's picture

I love my Ho Hos.  They are so goooooooooooooood.

Downtoolong's picture

This sounds like a case for Goldman. I thought this was precisely the kind of problem they exist to solve. I can’t believe Goldman isn’t able to come up with some kind of derivative based on the Euro, interest rates, and carbon credits, to help them out of this jam.

As for me, I’m going out to buy a couple of cases of Twinkies today. They’ll be a collector item in five years and I’ll be selling them on eBay for $50 apiece. Surely you don’t think the fat fucks who typically buy these things have the willpower to avoid eating the last ones they own.  

redeals's picture

And the scary thing is that in five years the twinkies would still be edible. Or at least as edible as a twinkie can be.

lordbyroniv's picture

I draw the line at Table Talk pies....

 

if those cease to exist...

 

I am leaving America.

 

Fuck this shit.

Big Slick's picture

DavidC says England is nice

Metalredneck's picture

No free phone, but we do have health care.  Bring a toque & shovel...

Oldrepublic's picture

lots of interesting comments over at the wall street journal blog

on this company http://blogs.wsj.com/corporate-intelligence/2012/11/15/hostess-strike/ta...

 

j0nx's picture

It's always austerity for the little guy while the execs get bonused to the 9's and drive up in a Ferrari on Jan 1st. Perhaps scorched Earth is the best policy now for all concerned. At least that way both sides get the shaft and this insanity ends sooner. If there is one silver lining to this cloud it's that the execs involved will be humping the street looking for a new job along with all the union grunts and all of them will have a big black mark on their resume labeled HOSTESS.

Temporalist's picture

Yeah!  And while we're at it why not just have flash mobs of shoplifters and looters because why should other people have things and why should companies be allowed to sell things that other people can afford to buy when others can't?

 

Oh?  That already happens?  Whocouldanoed?

Flash Mob in NYC's Bergdorf Goodman

http://www.youtube.com/watch?v=rFP7cXpLwP0

 

Urban Youths Loot $3,000 Worth of Designer Jeans in Chicago Flashmob

http://www.youtube.com/watch?v=8f6opssNxLY

 

Shoplifter Flash Mob

http://www.youtube.com/watch?v=ucLGpHeWU5I

 

Flash Mob: Urban Youths Pillage Walmart In Jacksonville

http://www.youtube.com/watch?v=4I_w60PzXoE

 

Urban Youths Pillage Convenience Store in Portland, Oregon (Third Flashmob in a Month)

http://www.youtube.com/watch?v=n2pDWkCJ1T8

 

Another Flash Mob Robbery, This Time in Dallas

http://www.youtube.com/watch?v=QCICkfL1qpY

 

Nordstrom Flash Mob / Case # 12-031295

http://www.youtube.com/watch?v=i604Bs4GoM4

j0nx's picture

Nothing you posted makes any sense and is not relevant AT ALL to my point.

AU5K's picture

Why is hostess allowed to fail, and other companies are bailed out?

justanothersucker's picture

Their management contributed to Romney?

ElvisDog's picture

Hostess should have made twinkies and solar panels or ho-hos and student loans. Then, they would have had no problems getting the govt bailout.

Matt's picture

Ironically, the maker of Twinkies is NOT Too Big To Fail. 

Big Slick's picture

"Why is hostess allowed to fail, and other companies are bailed out?"

Because 'Big Twinkie" has crappy lobbyists

justanothersucker's picture

Well, at least the BLS won't have to struggle to explain NEXT week's poor jobs report.  RIP Twinkies.  I'm going to Costco, LOADING UP and Ebay here I come!

HurricaneSeason's picture

This isn't over yet. Twinkie workers have been a member of the Gambino crime family for 60 years. We'll see what the judge thinks when he finds a horses head in his bed. "Back to work Twinkie men!"

toomanyfakeconservatives's picture

I wish the same would happen to public schools and teachers unions. My property tax bill would evaporate.

AynRandFan's picture

Nice try, but public sector unions can just keep blackmailing us until we comply.

khotel's picture

What demands were the unions making that Hostess was not willing to meet?  I haven't seen any details.

fijisailor's picture

Well good riddance.  This junk food fest can fade into oblivion.  They get about the same rating as a coke dealer (both types).

Seasmoke's picture

If they just could have held on for six more months they could have got $100 for a loaf of Wonder.

Pig Brotha's picture

I've been on both sides of the union/management scenario in NYC hotels, it is a fuckin' disgrace. You have illiterate pieces of shit barely able to speak the English language being treated as if they were untouchables because they are in the union. How about some dumb skill less fuck making $30+ per hour to wash dishes, or should I say feed and remove the dishes from a Hobart dish machine and do nothing but complain. Once these maggots are hired and enter the union it is nearly impossible to get rid of them regardless of work performance, attendance etc. As management we constantly try to create a better work environment (new cafeteria with free food, new lockers rooms, new uniforms, employee recognition days etc) and it is all a waste of time. The moment anything that could remotely be construed as a slight against a union member occurs, all hell breaks loose and they start screaming (literally) about their rights and call the business agent in. Unless you experienced this bullshit for yourself you have no idea how bad things are. The unions are destroying my industry, imagine having a 90% occupancy rate and still barley being able to keep the doors open. Unions cater to the least among the masses, those who don't give a fuck nor have the intelligence to realize they are destroying themselves.

AnAnonymous's picture

As management we constantly try to create a better work environment (new cafeteria with free food, new lockers rooms, new uniforms, employee recognition days etc) and it is all a waste of time.
_____________________________________

Absolute waste of time. It reads more like 'american' attempts by the 'american' management to justify their management positions (something had to be done in order to fill those management work hours) than attempts to better the work environment.

Typical 'american' attitude, as 'americans' run a business of extorting the weak, farming the poor.

This kind of 'american' initiatives only have one goal: help the so called helper.

And you will find it anywhere there are 'americans', public or private sector, charity or for profit businesses etc

This is how you spur consumption in an 'american' environment.

Pig Brotha's picture

If you weren't such a large American penis envying Chink I would respond to you...

Metalredneck's picture

One of my friends makes those Hobart dishwashers.  He gets $14.75/hr.

Pig Brotha's picture

He must feel great knowing that a person that just pushes the rack of dishes in the machine and pulls them out when completed is making more than double the salary of the person that helped build the machines. BTW out of the 7 hours dishwashers work a day (sorry we don't do 8 hour days in NYC) he might actually work 2 or 3 hours. And no you can't assign different work during down time, his title is dishwasher and that is all he will do. Yep we are most definitively ready to compete on the world market...

Alpha Monkey's picture

I've never had a union job, unless you count military service, which to me is just a giant fucking union.  However, I have had a few non-union jobs.  I'd have to say, listening to the way you talk about being a manager and remembering the way my managers were, it seems to me like there is a huge failure on the side of management.  I have yet to meet a truly competent manager that wasn't just another self serving POS like you sound to be.  Oooh, I see you're trying to make it sound like you are the good guy, getting new cafeterias, lockers, etc. but last time I checked, that wasn't the sole job of a manager.  Managers are meant to be leaders, and as such, they are meant to be able to connect with people and inspire them towards a common goal.  Most of what I've seen has been using things like, "we got you a new coffee maker, so now you should be 20% more effecient and productive.... we need to justify this cost somehow, or we'll have to start cutting back on labor..."  Leadership isn't meant to just wipe asses and then hold that asswiping over someone as a reason for them to work harder.  It surely sounds to me like you have an Us vs Them mentality instead of a leadership mentality.  If you are the common example of what passes for leadership in your company, then it's no wonder you can have a 90% occupancy rate and still barely be able to keep the doors open.

It all comes down to entitlement.  You feel entitled to worker loyalty, when you have done shit to earn it, and the workers feel entitled to higher wages when they are working their asses off to support the poor leadership taking the biggest peices of the pie.  I see there's a lot of plus signs on your name.  I wonder how many of them consider themselves proper leaders, when in fact they are nothing more than glorified slave drivers with no real backbone or intelectual creativity that's required to connect with people and produce real results.  It's easy to flail a whip around.

I'm glad you posted that racist comment in response to a response of your post, it makes understanding your small mind that much easier.  You don't deserve to be a manager, and there's no way you should consider yourself a leader.

Pig Brotha's picture

It all comes down to entitlement.  You feel entitled to worker loyalty, when you have done shit to earn it,

Apparently you do not read/comprehend English very well. As I stated I have been on both sides on the union/management scenario meaning that I started in the union (even the military union) many years ago and worked my way up to executive management. Iv'e learned leadership through a concept of "leadership by example" and most of my team are loyal to me and the property. However there is a hardcore 25 - 30% of the union staff that don't give a fuck, you try operating a business when 30% of your staff are not even trying. As far as inspiring people, I have over 10 men in the field currently that I have assisted in moving from hourly wage earners to middle and upper management, something they never thought  possible. I help manage over 1000 employees at my property, all within the confines of the collect bargaining agreement so leadership is not a luxury it is a necessity. And as far as I feeling entitled to worker loyalty I don't feel entitled, I earn loyalty. You apparently are living in a far different world than I, where managers are not held accountable. In my 14 years at my current property we've had 9 general managers, each held accountable for their lack of performance. I assure you a commensurate amount of  union members have not been terminated during this time.

Regarding my "racist comment", man the fuck up bitch. This is fight club.

waterhorse's picture

lol on ripping the other poster for "entitlement."  People who live in glass houses...

Pumpkin's picture

Well Fuck!  Now the shit has hit the fan!  No more fucking twinkies?

Professor Fate's picture

It's a victory for M & M's (Michael and Michelle).  Let all rejoice with another anti-obesity victory for the komrades.  The children shall survive on cabbage smoothies (under 16 ounces of course)

FrankDrakman's picture

I can hear Bambam now:

"That Twinkie you're eating? You didn't bake that."

Vince Clortho's picture

$$Billions for Bank$ta$ but not a penny for Twinkies.

wagthetails's picture

time for a Twinkies summit.  although Michelle might take issue with that. 

This is only the beginning i fear.  the end will be the eventual insurmountable gov't divide...then the people strike.

semperfi's picture

how about the "producers", the "taxpayers" strike - where do I sign up?

Let The Wurlitzer Play's picture

Taxpayers Unite - It not just a slogan anymore.

 

Fix It Again Timmy's picture

Bakers' Union - bringing a dull, 1" knife to a gun fight.  Seriously, is this a good environment in which to lose your jobs?  It's not like you have indispensable skills that require 8 - 10 years of post-high school education.  Have your union-employed advisors lost their jobs?  Rule #1 - don't be a dumb shit.  Rule #2 - repeat rule #1.  I used to work for the International Brotherhood of Firemen & Oilers - there are times to play your hand and times to fold 'em.

Sig Sauer's picture

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

Priceless

semperfi's picture

nope - still Bush'es fault

astoriajoe's picture

Surely the unions will purchase the assets and restore this faded brand to its former glory! Amiright or what?