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Hostess Mediation Fails, Liquidation To Proceed; Furious Laid Off Workers Now Turn On Labor Union

Tyler Durden's picture




 

Last week, when discussing the next steps for the company, and specifically the hope that mediation may resolve the epic animosity between management and workers, we stated that "What makes a mediation improbable is that the antagonism between the feuding sides has certainly hit a level of no return: "Several unions also objected to the company's plans, saying they made "a mockery" of laws protecting collective bargaining agreements in bankruptcy. The Teamsters, which represents 7,900 Hostess workers, said the company's plan would improperly cut the ability of remaining workers to use sick days and vacation." Sure enough, moments ago we learned that mediation has now failed and the liquidation may proceed. And since in America nobody understands that proper sequence of events involved in a bankruptcy liquidation, where the valuable parts always end up being acquired by someone, in this case the Twinkie brand and recipe, let the pointless Ebay bidding wars over twinkies continue. As for what really happens next, if indeed Bimbo is prohibited from acquiring the assets in the Stalking Horse auction due to anti-trust limitations, then the buyer will almost certainly be a "financial", i.e., another PE firm, whose coming means the end of any hopes and dreams of preserving union status at fresh start Hostess, or whatever the new firm will be named.

From the WSJ:

Hostess Brands Inc. said Tuesday night it would proceed with liquidation plans after mediation fails.

Earlier Tuesday, the head of the bakers union whose strike precipitated Hostess liquidation plans didn't attend a last-ditch mediation session and wasn't hopeful about its prospects, he said.

"I'm not too optimistic about this mediation," Frank Hurt, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, said when reached earlier Tuesday afternoon in Columbus, Ohio. He said he couldn't get to New York, where the session was taking place; instead, he said, the union's secretary-treasurer was attending.

 

The mediation came at a judge's suggestion after the Twinkie maker said Friday that a week-long strike by the bakers left the company no choice but to seek a bankruptcy judge's approval for liquidation.

 

The judge, Robert Drain, urged mediation, citing among other things the hope for saving some 18,500 jobs. The company filed for bankruptcy protection for the second time in January.

 

The judge indicated Monday that if mediation wasn't successful, Hostess could return to court Wednesday to pursue its liquidation plan.

 

Doug Mansky, a Hostess driver in Detroit and a member of the International Brotherhood of Teamsters, was in the process of moving to a cheaper condominium on Tuesday, after his union had agreed to an 8% pay cut that he said would shave $200 a week from his income. After Judge Drain cleared Hostess to impose the same new labor terms on the bakers union, they went on strike.

 

"I hope things work out. I'm going to be 49 and trying to find a job in a market that's terrible," Mr. Mansky said.

Sadly, the reality of learning just how bad the labor market truly is, all smoke and mirrors of a recovery aside, will now have to be experienced by not only Mr. Manksy but 18,499 of his fellow co-workers, who may have been duped into hoping by their union that by holding out a hardline stance, they would gain something.

They have now lost everything. And not too unexpectedly, the workers are now turning on the Union!

[S]ome Hostess workers in another union awaiting the
mediation results criticized Mr. Hurt, the 20-year president of the
bakers union, who defended his decisions and actions during the
company's bankruptcy process.

 

Scott Quenneville, a Hostess truck driver represented by the Teamsters, said he feels his colleagues were misled by Mr. Hurt into believing that a buyer would swoop in for the company. Mr. Hurt on Sunday said he thought there was a good chance a buyer would emerge who would give union members their jobs back.

 

"Frank misled a lot of people. He was not going to settle for anything less than closing the company down, because they didn't want that 8% pay cut," said Mr. Quenneville. "If you don't want the job, leave the job. Why ruin 18,000 jobs?"

 

"I didn't mislead anybody on anything," Mr. Hurt said. He said he didn't tell workers preparing to strike that a buyer for Hostess was definitely waiting in the wings.

 

Mr. Hurt said, "I don't want anybody to think that anybody is guaranteeing anyone anything, but we did know that there were people taking a look at this company."

This would be a truly fantastic drama, if people's lives were not at stake. And no, not one former Hostess worker will retain their job at the new company: that much is certain.

As we said, if only people had a basic understanding of how bankruptcy truly worked, and what the real state of the economy was, then Hostess' workers may have had a chance and some amicable comrpomise would have been possible.

Then again, if people in America actually understood economics and simple finance, then the "Ohio outcome", and many others, would have likely been quite different.

Now we can only hope we were not correct about the ultimate outcome too: namely that the US government will effectively hijack the bankruptcy process, and in doing so "bailout" a junk food maker, just so 18k votes can be preserved at the expense of creditors and making yet another mockery of the bankruptcy process, and property rights in the US.

Then again, this is precisely what the Union was likely hoping for all along, because once the government starts bailing everyone out, just where does it draw the line?

 

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Tue, 11/20/2012 - 20:43 | 3000495 LetThemEatRand
LetThemEatRand's picture

Decisions, like including paying themselves millions (not so much a mistake to them, I suppose).  The unions broke their back because their business model of funneling everything to the top presupposed that workers would receive far less.

The problem is that management legally has no skin in the game, especially at the major corporation level.  These guys are part of a club that will see them captaining another Valdez to failure in no time.  

Tue, 11/20/2012 - 21:12 | 3000607 dark pools of soros
dark pools of soros's picture

the problem is that once managers steal hundreds of thousands they can lose their jobs and wait around till the next company to latch in and pillage.  And any billionaire can toy with a whole town let alone one company

Tue, 11/20/2012 - 23:22 | 3000973 centerline
centerline's picture

Exactly.  Follow the money.  There is no real recourse anymore.  Loading these things up, yanking the cash out in advance, and crashing them on the beach is the game.  Top executives are just the frontmen for the operations.

Edit:  Got to reconnect the consequences.  Unfortunately, when this gets out of control, the restart of consequences is usually pretty ugly.

Tue, 11/20/2012 - 21:15 | 3000616 knukles
knukles's picture

Not to forget that being a union boss is likewise a racket, superlative salaries, bennies, perks, expense accounts, nepotism, kickbacks, etc., all at the expense Once Again of the Working Slob, the same guy paying the taxes, raped by the politicians, kids sent to shit schools, trying vainly to remember what the fuck that American Dream was Supposed to Have Been....

Tue, 11/20/2012 - 21:19 | 3000630 LetThemEatRand
LetThemEatRand's picture

Yes, there is corruption there too.  And no doubt that corruption is part of the problem.  I advocate for addressing the whole problem, which includes the corporate structure at its core.  In my view, if CEOs did not have the protection of the corporate system, there would be little need for large unions in their current form (what's left of them).

Tue, 11/20/2012 - 23:24 | 3000985 centerline
centerline's picture

You are drawing some -1 hits tonight for some basic truths and fairly level judgement LTER.  I would evidence this as another sign that we are fucked.  lol.

Wed, 11/21/2012 - 22:07 | 3003781 ronaldawg
ronaldawg's picture

Socialism - yayyyyyyyy!

Tue, 11/20/2012 - 22:15 | 3000811 johnberesfordti...
johnberesfordtiptonjr's picture

 

The imputed 6-figure salary for drivers sounds off.   The real number is probably in the $50K-$60K range… 

http://www.glassdoor.com/Salaries/route-sales-salary-SRCH_KO0,11.htm

Sure, a few route sales people COULD make a lot more by putting in extraordinary hours, etc. But, my guess is that this is very atypical. 

It appears that Hostess management is largely to blame since they did not seem to care about new product development, marketing, re-branding, etc. They did not find it necessary to jump on to the low sugar/low-fat bandwagon, etc. They made every mistake in the book and still (as usual) managed to rip off the company in the end.

 

Wed, 11/21/2012 - 01:59 | 3001277 Zgangsta
Zgangsta's picture

He was driving a truck in Detroit.  That's gotta be worth some extra hazard pay...

Wed, 11/21/2012 - 06:54 | 3001404 Urban Redneck
Urban Redneck's picture

Yeah, you know better than the Hostess employee how much he was being paid, and of course, you know where the fault lies...

You obviously know nothing about the nature of organized labor.

Hostess was not a profitable and growing entity making NEW HIRES.

The primary economic distortion created by the organized labor model in the US is the sacrifice of economic value added by employment to the seniority of the employee.  The more expensive labor is the first guy in who is also the last guy out.  The guys making 50-60K were sacrificed a long time ago if they have been in bankruptcy a few years and are going into liquidation now.   

 

Tue, 11/20/2012 - 20:47 | 3000500 nmewn
nmewn's picture

This is their second bankruptcy LTER. This last one started when they filed Chapter 11 back in January.

They had eleven months to seek a new gig in the Obama economy they desired...maybe a Fisker Karma just caught up and ran over them.

Tue, 11/20/2012 - 20:53 | 3000529 LetThemEatRand
LetThemEatRand's picture

Which has exactly nothing to do with the substance or point made in my post.  I don't believe it is Bush's fault, Obama's fault, or any other modern politician's fault.  Perhaps you think Obama is somehow at fault.  I don't see how, but I suppose I'm not surprised that you would see the connection.  And what does Fisker have to do with Twinkies?  You have more talking points than Fox News (and many of the same I would add).

Edit:  This is actually their third filing in the last five years.

Tue, 11/20/2012 - 20:58 | 3000567 ACP
ACP's picture

He probably doesn't mean Obama is directly at fault, but the fact is the free for all we've seen in govt, on Wall St, and with unions, is tied to the fact that Obama is demonizing a certain segment of the population in order to "divide and conquer" the masses. Yes, I said it. I don't remember which politician said it, but he was absolutely correct.

Tue, 11/20/2012 - 21:09 | 3000590 LetThemEatRand
LetThemEatRand's picture

Their first bankruptcy filing was in February of 2009.   And the last time I checked, the "masses" are middle and lower class.   I agree the Red Team and Blue Team are dividing them.  I see absolutely no indication that one team is trying to be be a "uniter."  I've abandoned both teams for that reason.

Tue, 11/20/2012 - 21:10 | 3000600 nmewn
nmewn's picture

"Their first bankruptcy filing was in February of 2009."

I stand corrected...its Michelle's fault, not O'Barry's...lol.

Tue, 11/20/2012 - 21:21 | 3000637 LetThemEatRand
LetThemEatRand's picture

O took office on January 20, 2009.   You don't really claim that he destroyed Hostess Brands in a couple of weeks, do you?  Then again, I suppose you probably do.

Tue, 11/20/2012 - 21:21 | 3000640 knukles
knukles's picture

Oh Jesus H Christ, man, now she's gonna be applying for supplemental Loss of Twinkies Benefits to maintain the Big Ass Lifestyle even though the Official Cook probably makes all she wants from scratch with her own garden fresh ingredients* maintained by the Parks Service, et al...

Whatta fucking mess....

 

* Ya'll just gotta see those State and County Fair Blue Ribbon Prize Winning Marshmallow Trees she grows out there on the far Back 40 of the South Lawn which been exempted from Agenda 21.

Booyah Motherfuckers!

Tue, 11/20/2012 - 21:40 | 3000711 nmewn
nmewn's picture

lol...I don't think anyone believes Michelle tends that garden by herself.

In other words, she didn't grow that, someone else did ;-)

Tue, 11/20/2012 - 21:21 | 3000639 ACP
ACP's picture

The Dems discovered that dividing the country from within consolidates power much faster than the outdated Rep method, which demonizes an entity far away, that no one can see or touch, thereby dehumanizing them. It worked during the Cold War because as far as Americans were concerned back then, we could have just as well been fighting space aliens. This is no longer as effective because the Internet can more quickly put people in the enemies shoes and viewpoint, but can also be used for propaganda if people don't know how to validate and separate fact from fiction.

Tue, 11/20/2012 - 21:27 | 3000661 LetThemEatRand
LetThemEatRand's picture

I agree.  So the Blue Team is temporarily on top (just barely).  The Red Team will adjust when the system collapses.  We'll probably have another Bush running for President in 2016, and he will probably win.

Tue, 11/20/2012 - 23:28 | 3000993 centerline
centerline's picture

Turd versus douchebag.  Who doesn't get it yet?   

Wed, 11/21/2012 - 01:27 | 3001241 willwork4food
willwork4food's picture

During the height of the Reagan cold war (mid 80's), we all were propogandanized with the filth of the USSR. Seriously, I literally imagined Russian girls to be ugly, fat with massive hairy bodies. Yukkie.

How wrong I was...

Wed, 11/21/2012 - 08:20 | 3001492 Disenchanted
Disenchanted's picture

 

 

A decade and a half before that it was 'gooks' slant-eyes, and 'charlie' that was the problem...before that that Krauts and Nips. Today it's them A-rab turrists. Who's gonna be tomorrow's Goldstein?

Somehow along the line in my lifetime, I've come to the conclusion that maybe it's US who are the fucking problem in the world.

Ok it's time for my two minutes of hate...

Tue, 11/20/2012 - 21:00 | 3000571 insanelysane
insanelysane's picture

I would only blame Obama for the fact that the economic indicators were showing a recovery which made the workers believe that they shouldn't take a pay cut.  Of course if they listened to Bernie the Bankster, they would have heard him repeatedly mumble stuff about how the underlying (true, real, actual) numbers showed a different story.

BTW, the politicians are already working on another long term unemployment bill because they know the real story too.

Tue, 11/20/2012 - 21:07 | 3000594 nmewn
nmewn's picture

You don't have much a sense of humor do you?

The Teamsters were on board, all the unions agreed except one union...

http://www.teamster.org/content/teamsters-bakery-workers-should-hold-secret-ballot-vote-hostess

So now everyones out of a job, just in time for Christmas...ho ho ho.

Tue, 11/20/2012 - 21:11 | 3000602 LetThemEatRand
LetThemEatRand's picture

And everyone loses everything, except management who keeps their spoils.  A point you missed.    ho ho ho.

Tue, 11/20/2012 - 21:18 | 3000622 nmewn
nmewn's picture

The Teamsters looked at the books, they said you better take it if you want a job.

Is your problem with managements compensation? If so, what do you think the Bakers & Confectioners Union "management team" should be after this complete debacle?

Tue, 11/20/2012 - 21:25 | 3000651 LetThemEatRand
LetThemEatRand's picture

My problem is two-fold:  1) management earns hundreds of times the average worker, which is not justified as evidenced by this story, and 2) that system exists because management is not accountable for failure under our current system.  Unions are also corrupt, which does not change 1 or 2.  Unions in their present form exist because of 1 and 2.

Tue, 11/20/2012 - 21:50 | 3000735 nmewn
nmewn's picture

What does "average worker" mean...just average? High school dropout? Ex-felon on the loading dock...what?

The business was losing money hand over fist...if you're saying the union looted the business just as much as management, then I agree.

Tyler's already pointed out the unfunded pension liabilities below...its a lost cause...eat a cookie instead of Rand ;-)

Tue, 11/20/2012 - 21:55 | 3000750 LetThemEatRand
LetThemEatRand's picture

So what do you propose we do with the management side of the equation?

Tue, 11/20/2012 - 22:14 | 3000809 nmewn
nmewn's picture

What do you mean? Management is answerable to the owners.

Who were the owners? Hostess was private and owned by Ripplewood Holdings, GE Capital & GE Capital Markets, Silver Point Finance and Monarch Master Funding.

It was dead a long time ago.

Tue, 11/20/2012 - 22:24 | 3000826 LetThemEatRand
LetThemEatRand's picture

I didn't bother to check the others, but the GE entities are publicly traded so the management of those companies is -- again-- gambling with other people's money, with no fear of losing their own.   Look beyond the simple, and the answer will be revealed.

Tue, 11/20/2012 - 22:29 | 3000850 nmewn
nmewn's picture

You should check Ripplewood, you might be surprised who takes advantage of "average workers"...the name Immelt speaks for itself, yes, look beyond the simple.

Tue, 11/20/2012 - 22:41 | 3000874 LetThemEatRand
LetThemEatRand's picture

Hmm, GE again.  Oligarch.  Spending other people's money.   So what's your point?  Simple is complicated, yes?  Or are you stuck in the Fox News paradigm that somehow GE is supposed to be a hero to anyone other than other oligarchs?

Tue, 11/20/2012 - 23:27 | 3000988 nmewn
nmewn's picture

Child, I find it humorous you think I watch Fox News when I (and others) have given you more over the last few months than Fox or HuffPo could have ever given you...for frrrreeee!...lol.

Its as simple as this...for the last time...the role of government is to protect the people FROM the oligarchs.

Its not to give anyone free shit or take anymore from the people than is needed for its limited operations. When you call on it to do more, it certainly will...with unbelievable consequences for all.

Tue, 11/20/2012 - 23:11 | 3000946 odatruf
odatruf's picture

If that is a sincere question, then the honest answer is: I don't know. Every idea I've heard or come up with is a solution worse than the problem. But, I'm open to ideas.

Tue, 11/20/2012 - 21:59 | 3000760 ACP
ACP's picture

It seems both sides did loot the business, the only difference in management was able to divide the loot between fewer people.

What just boggles my mind is that union leadership would rather put their workers out of a job than - at the very least - agree to an extension in order to keep people working. "Fuck it" seems to be the motto instead of "Live to fight another day" in this case.

Tue, 11/20/2012 - 22:25 | 3000840 nmewn
nmewn's picture

"It seems both sides did loot the business, the only difference in management was able to divide the loot between fewer people."

Thats my view of it as well. The "bankers/creditors" will end up owning the brand, the most important asset. Maybe they can do the dance one more time and hope they can find a chair when the music stops again.

The "average worker" that LTER is talking about would be wise to investigate who they're working for before applying for the job. Its never been enough for me to say "Honey, I got the job!"...I've always said, lets see if the the first check clears and take it from there ;-)

Wed, 11/21/2012 - 07:09 | 3001414 Urban Redneck
Urban Redneck's picture

This is the second time you have thrown out that bullshit propaganda in this thread. 

"hundreds of times the average worker" How much is "the average worker" making and how much is the "average management" making?  If the CEO was making $2.5M then 1/100 of that is $25,000, 1/200 of that is $12,500, and 1/300 of that is $6.250.

We have a Hostess employee's admission that was pulling down around $120,000.  100 times his pay would be $12M, 200 times his pay would be $24M, and 300 times his pay would be $36M.

Even if the hostess employee was the absolute highest paid union member your math wouldn't come close to working out.

 

Tue, 11/20/2012 - 21:17 | 3000625 Old Poor Richard
Old Poor Richard's picture

Management gets performance bonuses.  Jingle Fucking Bells!  I can't figure out which racket I want to be in: burying companies in debt and ploughing them into the ground, or driving a truck for the fucking Teamsters.  Either way would make more than I do now. 

 

Tue, 11/20/2012 - 21:26 | 3000659 knukles
knukles's picture

Could you hum a few bars...

Wed, 11/21/2012 - 04:37 | 3001341 cranky-old-geezer
cranky-old-geezer's picture

 

 

And everyone loses everything, except management who keeps their spoils. 

Yes, that's how it is, companies exist for management, not workers.  Deal with it.

Tue, 11/20/2012 - 22:05 | 3000780 Augustus
Augustus's picture

The Teamsters were on board because they provided part of the funding when the company came out of bankruptcy last time.

With Dickie Gephart setting up the deal for VC funding, how could it go wrong?

If there is some govt. bailout, it won't be for the workers.  It will be for Gephart.

Tue, 11/20/2012 - 20:51 | 3000543 delacroix
delacroix's picture

twinkies got way too expensive. little debbies, in tennessee(non union) sells comparable snacks @ less than half the price.  I was sure obama would save the twinkies, as that's one area where he does have experience.

Tue, 11/20/2012 - 21:11 | 3000608 Hangfire
Hangfire's picture

Who makes Zinger's??? Remember those things I think they came in three flavors one of which was like a pink coconut frosting.  I'm going to have to do some searching around to find a suitable replacement to the hostess apple pie or "victory pie" as they are known in my fishing circle.  Always grab a victory pie from the market before heading out to fish Seabass, more often than not you get to eat it while standing over a 40# fish as it bleeds out on the deck!   

Tue, 11/20/2012 - 21:34 | 3000684 knukles
knukles's picture

Hostess

Tue, 11/20/2012 - 21:48 | 3000731 Hangfire
Hangfire's picture

Dammit your'e right!

Just found some very amusing web viewing by searching Hostess on ebay,  there are still plenty of victory pies out there for the right price.  

Tue, 11/20/2012 - 21:42 | 3000713 Rusty Shorts
Rusty Shorts's picture

...my girlfriend has a "victory pie"...

Tue, 11/20/2012 - 21:58 | 3000757 Nadaclue
Nadaclue's picture

Yes, and it is one tasty pie. Tell her I said Hi. lol

Tue, 11/20/2012 - 22:01 | 3000766 knukles
knukles's picture

He's dating my mother.....

Wed, 11/21/2012 - 05:10 | 3001353 lakecity55
lakecity55's picture

O-Phone has experience in Twinks, not Twinkies.


Tue, 11/20/2012 - 20:51 | 3000544 The Gooch
Tue, 11/20/2012 - 20:57 | 3000563 jerry_theking_lawler
jerry_theking_lawler's picture

3rd, right? Interstate Brands was first iteration of the company.

Tue, 11/20/2012 - 20:50 | 3000538 Gully Foyle
Gully Foyle's picture

LetThemEatRand

I just read about an international company that has been buying up beer makers. If they don't close the doors, they use lower quality ingredients which destroys the flavor of the beer.

All brands are not the same.

(Biden 2016 Trust dies but mistrust blossoms)

Tue, 11/20/2012 - 21:45 | 3000719 Bastiat
Bastiat's picture

Micro brew.

Tue, 11/20/2012 - 20:53 | 3000547 Everybodys All ...
Everybodys All American's picture

There are no garunteed outcomes for anyone in bankruptcy cases. The corporation will not survive very long if either management or the labor force or both fail to work toward a common goal. That goal normally is and should be profitability. Being profitable insures that you can continue with the product or service year after year. No one should believe that when going through bankruptcy that their job would be still available. That's the real world and always has been except in the very exceptional cases such as the automobile industry.

What I would say is a problem is that the shareholders and often including the board of directors at some point lose control over labor costs and therefore management. I'm really not sure what can be done other than having shareholders voting for pay increases for the employees. As a part of this process the workers should be shareholders as well so they understand the magnitude of their decisions on pay increases.

Clawbacks are a little too late because the corporation has already failed at that point.

Tue, 11/20/2012 - 20:56 | 3000561 LongSoupLine
LongSoupLine's picture

There are no garunteed outcomes for anyone in bankruptcy cases.

 

 

Well, unless you're GM...or anything covered under TARP...or Bernanke.

Tue, 11/20/2012 - 21:35 | 3000686 knukles
knukles's picture

Or one mother of all campaign contributors to Yomamma's efforts.

Tue, 11/20/2012 - 23:39 | 3001030 WillyGroper
WillyGroper's picture

It was murdered for PE. There's more money for all involved after the dust settles. BOD & Judges that is. Same story, different company. Playbook since the 80's.

Wed, 11/21/2012 - 00:23 | 3001133 Ident 7777 economy
Ident 7777 economy's picture

 

 

LetThemEatRand:

 

 

" This is the basic problem with the corporate system.   The top management walks away with millions, shareholders lose everything "

 

 

Company. Is. Privately. Owned.

 

(THERE ARE NO SHAREHOLDERS, per se)

 

Some ppl ought to pay attention.

 

After reading comments above adressed to and responded by LetThemEatRand -

Let it be said LetThemEatRand is just plain stoopid.

 

Tue, 11/20/2012 - 20:33 | 3000470 BORT
BORT's picture

These guys keep thinking something good is going to happen for them, but the middle class, or those jobs held by 12 years of school or less, opting for shop instead of science, are gone!!!!!!!!!!!!

Tue, 11/20/2012 - 20:34 | 3000471 cesarsp_us
cesarsp_us's picture

wow 8% cut = 200 less per week?? how much did these guys make??

Tue, 11/20/2012 - 20:42 | 3000506 CrashisOptimistic
CrashisOptimistic's picture

200 * 52 = 10,400 dollars / 0.08 = $130,000

Tue, 11/20/2012 - 20:42 | 3000508 dogbreath
dogbreath's picture

2500 a week by my calculation for being a delivery driver.  

Tue, 11/20/2012 - 20:46 | 3000522 cesarsp_us
cesarsp_us's picture

thats alot money these days

Tue, 11/20/2012 - 20:55 | 3000558 Gully Foyle
Gully Foyle's picture

dogbreath

Dude, for cross country trucking.

Not hustling bread from the bakery to the other side of town.

Quite a bit of difference.

Also, since you dumbasses bitch about them as if they only apply to ONLY you, after TAXES, fees, insurancce, dues, utilities, so on and so forth how much money do you think is left?

Maybe some trucker could explain just how much they pay out yearly and what that salary really means.

If any real working men are here that is.

(Biden 2016, The wheel is come full circle)


Tue, 11/20/2012 - 21:11 | 3000604 Seasmoke
Seasmoke's picture

You forgot to include UNION DUES

Tue, 11/20/2012 - 21:24 | 3000647 Michaelwiseguy
Michaelwiseguy's picture

Why does the Federal Reserve Corporation continually devalue the money, making it impossible for almost everyone to save and get ahead?

Tue, 11/20/2012 - 21:31 | 3000676 dogbreath
dogbreath's picture

Its a negative feedback loop. The more everything costs, the more everything costs especially housing which made everyone think they were rich real estate investors.  The more the average house cost the more public and private sector unions could demand as cost of living increases. 

 

Wed, 11/21/2012 - 03:56 | 3001327 bunnyswanson
bunnyswanson's picture

Why shouldn't the cost of living be matched with cost of living wages that are equivalent?  There was a time it was a routine event, once a year we'd get a cost of living raise and a performance evaluation and raise.

Over time, workers become more efficient and deserve to be paid better as time goes on.  Especially in light of their loyalty - If global corp want cheap labor so they can live like gluttinous kings and self-indulgent rock stars, they should be replaced by in their respective countries by businesses/industries/corporations who are willing to accept a work force which includes wages based on their country's cost of living including an ability to save for retirement.  The higher price they must charge will be affordable to workers who are paid a fair wage. 

 

Call it isolationalism if you'd like.  Whatever it takes to employ the citizens who carry the tax burden from a local to federal level, are responsible for their health insurance and funding their retirement which is 20+ years without ability to be productive for many elderly. 

 

Were it not for unions, we'd have a working class of people who jump out windows of factories to escape their plight.  Or small children who should be reading and learning would be forced to labor long hours through illness and worse for pennies.  Fukushima, Bhopal India, Valdez, Gulf of Mexico, should illustrate how far CEOs will go to save a dollar.  Wiping us off the face of the earth one geographical area at a time as a consequence of a failed business plan is just one bribed politician away.

Consumption has been encouraged through campaigns designed to take focus off family and community.  Debt slaves.

 

Wed, 11/21/2012 - 07:18 | 3001419 Urban Redneck
Urban Redneck's picture

Must have vs. Nice to have

To be sustainable a company must operate at a profit (or have a credit card from Uncle Ben).

 

Wed, 11/21/2012 - 02:47 | 3000654 dogbreath
dogbreath's picture

in other words you are saying that a teamsters truck driver is worth every cent of his 130k annual paycheck.  

Tue, 11/20/2012 - 20:33 | 3000474 nmewn
nmewn's picture

Ho ho ho...bitchez.

Tue, 11/20/2012 - 20:35 | 3000476 LongSoupLine
LongSoupLine's picture

if indeed Bimbo is prohibited from acquiring the assets in the Stalking Horse auction due to anti-trust limitations, then the buyer will almost certainly be a "financial", i.e., another PE firm

 

 

Ok, show of hands for Bimbo to win.

Then we can have Bimbo Twinkie, Bimbo cakes and the best...Bimbo Ho Ho's

Tue, 11/20/2012 - 20:37 | 3000482 cesarsp_us
cesarsp_us's picture

yeah I love Bimbo

Tue, 11/20/2012 - 20:54 | 3000552 Angus McHugepenis
Angus McHugepenis's picture

I'll take a Bimbo Muff-in. Hold the sprinkles.

Tue, 11/20/2012 - 20:58 | 3000568 LongSoupLine
LongSoupLine's picture

Oh, I'm sorry...we're fresh outta those...

 

How about some cream filled Bimbo buns instead?

Tue, 11/20/2012 - 21:30 | 3000670 Angus McHugepenis
Angus McHugepenis's picture

Nah, how about a MILF Muff-in? Got any of those? Bimbos give the clap... er ... indigestion.

Tue, 11/20/2012 - 20:36 | 3000479 Dr. Engali
Dr. Engali's picture

It seems to me like it would be a product mix for Pepsi if they can get away with it.

Tue, 11/20/2012 - 20:44 | 3000514 edb5s
edb5s's picture

Yum!

Tue, 11/20/2012 - 21:37 | 3000698 knukles
knukles's picture

I saw that!

Tue, 11/20/2012 - 20:36 | 3000480 Savyindallas
Savyindallas's picture

A new company  with new management (and no union) will emerge. I feel sorry for those employees who got sold down the river by the union  - Im not defending management or the owners  -I'm sure they suck too  -but I do not trust today's unions  -they are pathetic. A whole new concept of unions needs to emerge  -the present system of collective bargaining sucks-it's inherently flawed. This type of socilaism does not work.

Tue, 11/20/2012 - 20:39 | 3000493 Zgangsta
Zgangsta's picture

The union system does work;  it just needs to become global in scope.

What's the point of holding the American labor system by the balls when companies can just move the labor out of America?

Tue, 11/20/2012 - 20:42 | 3000507 DaveyJones
DaveyJones's picture

an innevitable chapter in global economics which will get weird with oil and debt.

Tue, 11/20/2012 - 21:01 | 3000577 Matt
Matt's picture

Is this sarcasm? Sorry, it's just that it really sounds like you are serious. How exactly does one move the teamster jobs, that is to say, the jobs of delivering the goods within America, outside of America?

These people have a job that cannot be replaced by someone outside the country, because you must be inside the country, to deliver goods inside the country. Creating a global teamsters union would not magically make things better.

Tue, 11/20/2012 - 21:17 | 3000621 Zgangsta
Zgangsta's picture

Hmmm...let me think....what other business in this country has experience in delivering items to places inside of the country?  Any place in the country, no matter where it is located?  Maybe a business that is so deep in the red that it is desperately looking to expand into other areas of potential profit, such as delivering freight shipped from overseas...and a monolithic business with government backing that is so big that it could crush the Teamsters if it chose to do so?

Sorry, I'm drawing a blank here.  Guess you're right.

Tue, 11/20/2012 - 21:39 | 3000705 knukles
knukles's picture

And the quality/timeliness of delivery wouldn't matter since the half-shelf-life of the product is in excess of 123 years.

Tue, 11/20/2012 - 23:23 | 3000981 Matt
Matt's picture

"what other business in this country has experience in delivering items to places inside of the country?"

Exactly. Within the country. Glad to see you understand that your previous post,

"What's the point of holding the American labor system by the balls when companies can just move the labor out of America?"

Was irrelevant when discussing fresh baked goods being delivered within the country.

Wed, 11/21/2012 - 00:10 | 3001110 Zgangsta
Zgangsta's picture

Once the USPS's own union is busted out of necessity, USPS will bigfoot all other unions in the country.  And they'll be in bed with all of the foreign countries that are bringing them business.

So ultimately, they will resolve the problem of transporting foreign goods through non-union means.

Tue, 11/20/2012 - 21:39 | 3000706 Curt W
Curt W's picture

Doesn't want to send teamsters over seas.

wants unions to form in every countries to level the wages world wide.

then everything will be cheaper to make closer to home.

Tue, 11/20/2012 - 23:30 | 3001000 Matt
Matt's picture

Workers of the World, Unite! Good Luck on that one, getting unemployed people in Bangledesh to hold out to push labour costs up so that Americans can keep their union job over here.

Tue, 11/20/2012 - 21:22 | 3000641 CrockettAlmanac.com
CrockettAlmanac.com's picture

 

 

The union system does work;  it just needs to become global in scope.

 

Like this?

 

Service Employees International Union (SEIU) activists discuss their compensation:

http://www.youtube.com/watch?v=PnjD7SLtBxU&feature=player_embedded

Tue, 11/20/2012 - 22:00 | 3000762 nodhannum
nodhannum's picture

Yeah!  Working great in Greece and Spain.

Tue, 11/20/2012 - 20:37 | 3000487 Zgangsta
Zgangsta's picture

I don't think that Twinkies as we know them will ever return.  Whomever acquires the trademark and recipe will no doubt endeavor to find a way to use cheaper methods and ingredients to manufacture them.

The people that Twinkies appeal to will eat any slop you throw at them, so they'll likely eat the new Twinkies as well, but it will probably at least as big a change as the switch from cane sugar to HFCS in soft drinks in the early 80's.

Tue, 11/20/2012 - 20:41 | 3000497 Tyler Durden
Tyler Durden's picture

The recipe will be preserved as the manufacturing costs are absolutely meaningless. The key viability factor here was not the COGS, but the SG&A and of course, the balance sheet and the billions in unfunded pensions.

Tue, 11/20/2012 - 20:57 | 3000564 dark pools of soros
dark pools of soros's picture

and the endless extortion of raises from management that seem to escape these updates

Tue, 11/20/2012 - 21:09 | 3000598 knowless
knowless's picture

I think that's the point, a bloated bureaucracy which secures it's status through false handouts and lies... Who abandon ship with no harm to them. Sort of like a microcosm of something larger.

Extortion and usury seem to be generally overlooked these days, as far as crimes go.

Tue, 11/20/2012 - 21:54 | 3000747 Tyler Durden
Tyler Durden's picture

Actually the entire previous post on this issue was dedicated to the topic of management retention bonuses. You may have missed it.

Tue, 11/20/2012 - 22:02 | 3000771 knukles
knukles's picture

"Zingers"

Tue, 11/20/2012 - 22:10 | 3000789 LetThemEatRand
LetThemEatRand's picture

The prior post (assuming I am thinking of the same one) addressed retention bonuses going forward post the most recent bankruptcy.  I'd be curious to see what management pulled out of the enterprise since say 2005, a few years before the first BK filing.  Not asking you to do the math, but I'll bet it's a very large percentage of the company obligations that are blamed for the BK.  For a few individuals.

Tue, 11/20/2012 - 23:40 | 3001028 jballz
jballz's picture

They took 950 million from the pension fund. That will buy a couple of nice fuckin yachts. Of course mooring fees and gas may run 130k even before you pay for catering and such.

I DARE You supposed number crunchers to tally the total equity extraction since ripple wood LBO and post alongside the payroll cut.

This union bullshit is nothing but class warfare based propaganda and misdirection. Who built the motherfucking company...

Wed, 11/21/2012 - 01:08 | 3001216 dogbreath
dogbreath's picture

Fuck you.  You equate anyone argueing against union self enrichment as supporting management self enrichment.  Did i say fuck you.  There are lots of people who have to pay the inflated costs associated with the inflation of costs caused by unions.   The situation at Hostess was two sets of hands on the neck of the chicken trying to encourage increased egg production.   

Wed, 11/21/2012 - 07:24 | 3001424 Urban Redneck
Urban Redneck's picture

Source.your.claim.

Tue, 11/20/2012 - 22:02 | 3000770 nodhannum
nodhannum's picture

Then why doesn't the union buy the compay?  Then they can have endless raises, bonuses, 365 days of vacation per year...why it's just a cornucopia!

Wed, 11/21/2012 - 08:53 | 3001549 Waterfallsparkles
Waterfallsparkles's picture

As part of the pay cuts the Company offered (I believe) 25% of the Company to the Workers.

The Unions and Workers were short sighted.

Tue, 11/20/2012 - 21:11 | 3000606 Zgangsta
Zgangsta's picture

I respectfully disagree.  The business acquiring the brand and recipie will not entail any new employee costs.  All of the costs associated will be in outfitting their factories to produce Twinkies.  As they will be starting from scratch, and will not be beholden to any of the old ways of doing things, they will jettison anything and everything not essential to creating something that looks like a Twinkie.

Tue, 11/20/2012 - 21:14 | 3000613 dark pools of soros
dark pools of soros's picture

here comes the Twinkie plantation

Tue, 11/20/2012 - 23:00 | 3000922 dtwn
dtwn's picture

Ummm, the machinery doesn't go anywhere.  Those are assets that can be obtained during liquidation.  You have the factories in place, you just need cheaper labor costs.  Labor costs are often the most significant outlay for many companies (I think, I may be wrong on that, but too tired to check).  So, figure out what price people will pay for twinkies, calculate the capital investment required to pick up the liquidated assets, and then figure out the marginal cost of production and the labor costs needed to make a profit.  If Bimbo bought the assets, I suppose they could shift production to their current factories, but I don't know anything about production capacity.  Or they could retain the current infrastructure and then offer certain wages for the jobs.  I doubt the former employees will have moved on to other positions, and I would bet most of them could be back at their former positions making significantly less.  They're already trained and have no other options.  Plus I'm sure there are lots of unemployed young people that would be happy to drive a truck for $30k a year instead of $130K.  Wage deflation is going to happen as a necessary step of the market getting back to any sort of normalcy.

Tue, 11/20/2012 - 23:07 | 3000938 Zgangsta
Zgangsta's picture

These companies have their own factories.  There's an overcapacity problem in the baking industry already.  Why would Bimbo buy unnecessary assets if they could cheaply export the procedure to their own unused factory resources?

Tue, 11/20/2012 - 23:28 | 3000995 Matt
Matt's picture

Exactly. And as mentioned by someone previously, some of these factories are quite old, may have asbestos in them, and have worn out and/or antiquated equipment. Cheaper to use a newer plant, or if need be, build a new plant, then to purchase and use these old factories.

Tue, 11/20/2012 - 21:14 | 3000615 spekulatn
spekulatn's picture

 Just make your own twinkies.

 

http://devour.com/video/how-to-make-twinkies/

 

Tue, 11/20/2012 - 21:24 | 3000650 nmewn
nmewn's picture

Pretty much.

Everyones hung up on the markting brand, not the product. Meanwhile, Elmo's voice has been silenced...apparently he stuffed one too many twinkies down his throat.

What? ;-)

Tue, 11/20/2012 - 21:54 | 3000746 Ineverslice
Ineverslice's picture

 

Elmo be in truble...

I dunno anything about his world these days, but, will be interested in hearing Santa's report shortly.

Tue, 11/20/2012 - 22:41 | 3000880 nmewn
nmewn's picture

I really am laughing my ass off over this...the whole PBS, "touchy feely" meme.

Big Bird (a crony capitalist by any description) defended by the CnC (crony capitalist in chief) and now two guys coming FORWARD and pointing the accusatory finger at Elmo for pedophilia!

Who needs fantasy & escapism?...its all around us...ROTFLMAO!!!

Wed, 11/21/2012 - 04:58 | 3001349 lakecity55
lakecity55's picture

Jimmy Savile is not dead. He came back as Elmo.

Tue, 11/20/2012 - 21:29 | 3000667 Mary Wilbur
Mary Wilbur's picture

I'm not that smart. What does SG&A mean? Thanks.

Tue, 11/20/2012 - 21:51 | 3000740 Taint Boil
Taint Boil's picture

 

 

Hold on let me get that --> click here

Tue, 11/20/2012 - 22:04 | 3000772 Al Huxley
Al Huxley's picture

Pfft!  Nice one - LMAO.  Sorry Mary, not laughing at you - Selling, General and Administrative Expenses.

Tue, 11/20/2012 - 22:04 | 3000777 nodhannum
nodhannum's picture

You be smart, bro.

Wed, 11/21/2012 - 08:45 | 3001538 BidnessMan
BidnessMan's picture

Wow - a new way to insult a lazy person - Kudos!

Tue, 11/20/2012 - 20:53 | 3000549 akak
akak's picture

 

I don't think that Twinkies as we know them will ever return.  Whomever acquires the trademark and recipe will no doubt endeavor to find a way to use cheaper methods and ingredients to manufacture them.

You mean it is possible to make Twinkies even more cheaply (read: crappy) than they already were?

Tue, 11/20/2012 - 23:24 | 3000983 P.T.Bull
P.T.Bull's picture

My thought exactly. I read an entire book on the making of a twinkie. There are no natural or healthy ingredients in twinkies. Its impossible to imagine that they can be any less quality than they are now. They will be cheaper to make due to mexican labor and mechanizing the plants, but no less quality.

Tue, 11/20/2012 - 23:38 | 3001025 mjcOH1
mjcOH1's picture

You can get pretty good bulk rates on melamine-fortified creamy fillings in China.

Tue, 11/20/2012 - 21:41 | 3000710 knukles
knukles's picture

Monsanto will emerge as winning bidder having found the genetic modification to grow Twinkies on Kudzu vines.

Tue, 11/20/2012 - 23:13 | 3000952 andrewp111
andrewp111's picture

It will even be better if Monsanto can have the vines grow the plastic packaging around the Twinkies as well. That way a special breed of genetically engineered weasels can do the harvest and pack the Twinkies right into their shipping crates - all with no labor costs. Production costs could drop as low as a penny per hundred count.

Tue, 11/20/2012 - 23:40 | 3001031 mjcOH1
mjcOH1's picture

I think the plan is possum that eat kudzu and shit twinkies.

Wed, 11/21/2012 - 08:42 | 3001530 BidnessMan
BidnessMan's picture

Can't see Michelle allowing a bailout of Twinkies and Ding Dongs

Tue, 11/20/2012 - 20:37 | 3000488 DaveyJones
DaveyJones's picture

All those preservatives and they couldn't save a thing

Tue, 11/20/2012 - 20:52 | 3000545 nmewn
nmewn's picture

I'm not sure all the food nazis can see your humor...but I'm sure somewhere, Bloomberg is chuckling for a completely different reason ;-)

Tue, 11/20/2012 - 21:01 | 3000578 Ineverslice
Ineverslice's picture

 

so much for the nuclear souvenir...didn't even make it to December 21.  

Workers, revolt! Fight for ur beloved sponge cake!

Tue, 11/20/2012 - 20:39 | 3000490 Jack Burton
Jack Burton's picture

Oddly enough, Americans love their bakery goods. The net result of Hostess going under is other bakery companies will pick up market share and expand to meet the new demand. They will hire workers. What will the net job loss be, perhaps very small.

Americans will eat sweet baked goods, if not Hostess, then some other brand. Those brands will need to hire. Overall bakery consumption will remain where it is now and Hostess' customers will buy from others.

I never liked Hostess anyways, I buy from local bakeries. They employ people too, just like hostess.

 

Tue, 11/20/2012 - 20:43 | 3000509 Zgangsta
Zgangsta's picture

It's not just the total number of jobs that needs to be considered.  These were 18,000 $22-an-hour Union jobs that were lost.  If those who lost these jobs choose to stay in the industry, they will likely be working for half the pay and half the benefits.  So if every one of these people finds a new job, that's still a loss of 9,000 Union jobs worth of purchasing power.

Tue, 11/20/2012 - 21:21 | 3000635 dark pools of soros
dark pools of soros's picture

this is what happens in a depression.. the rich cash out and let it all tumble as they go wait it all out on islands & estates.  Wars happen, some great resets occur, but quality of life bottoms out.

Management wasn't always in such power..  lots of time it was the dork that couldn't work left to do the books but they didn't make 400 times what the workers made.

return to small business and local economies is the next step after the Great Cash Out

Tue, 11/20/2012 - 23:27 | 3000989 P.T.Bull
P.T.Bull's picture

So, do you just trot out the marxist narrative no matter what the specific circumstances?

Wed, 11/21/2012 - 07:31 | 3001429 Urban Redneck
Urban Redneck's picture

Get your queer math straight.

a 400 multiple is utter BULLSHIT in this case

Tue, 11/20/2012 - 22:08 | 3000786 Al Huxley
Al Huxley's picture

That sounds pretty fucking socialist to me - you sound like you think an economy where .01% of the population has 99.99% of the money isn't viable.  Still, I think I'm equally as pissed about the truck drivers making 130K as I am about the CEO making 2.2 million.  Hard to pick a side here.

Wed, 11/21/2012 - 03:03 | 3001310 steveo77
steveo77's picture

Purchasing Power????

 

Give me a effen break!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

Loss of productivity power

 

Tue, 11/20/2012 - 20:47 | 3000526 kaiserhoff
kaiserhoff's picture

Yes, they do employ people, and I doubt they pay bread truck drivers $2400/week.

Tue, 11/20/2012 - 21:23 | 3000642 Mary Wilbur
Mary Wilbur's picture

Bakery snack consumption ought to increase jobs in the field of health care. Welcome to diabetes type 2.

Tue, 11/20/2012 - 20:41 | 3000498 Savyindallas
Savyindallas's picture

I hope the workers lynch their union reps.

Tue, 11/20/2012 - 20:41 | 3000502 Larry Dallas
Larry Dallas's picture

Good. They're on the street. Fuck 'em.
Couldn't happen during a better time of year.

I see some news stories in the future of a crazy union member who will kidnap Mr. Hurt a la Randy Quaid in Christmas Vacation.

This is going to blow sky high and many union members are going to be testing their bosses.

Tue, 11/20/2012 - 20:43 | 3000511 cesarsp_us
cesarsp_us's picture

i thout it was the season to be jolly???

Tue, 11/20/2012 - 20:45 | 3000504 Jugdish
Jugdish's picture

Now the workers can stay home and collect unemployment for eternity. Everyone wins except the sheep.. I mean taxpayers.

Tue, 11/20/2012 - 21:10 | 3000599 Larry Dallas
Larry Dallas's picture

That is going to be one hell of a drop in standard of living and they are not going to stand for it.

These Union guys were all about conspicous consumption and they're not going to deal with living on entitlement and having to buy the Vizio instread of the Sony.

Keep an eye out for gold chains, pinky rings and classic American hotrods being sold on eBay/Craigslist in those cities being affected by this most.

 

Tue, 11/20/2012 - 20:48 | 3000513 Cheesy Bastard
Cheesy Bastard's picture

The article says they feel mislead by union president Mr. Hurt.  The next step in the union chain is to speak with executive vice president of the union, Mr. Torment.  The final step in the grievance process ends with Mr. Privation.

Tue, 11/20/2012 - 21:23 | 3000646 formadesika3
formadesika3's picture

Hurt, good name. I wonder how often these union officials are paid to take a dive. Nah... could never happen.

Tue, 11/20/2012 - 22:10 | 3000798 Al Huxley
Al Huxley's picture

Damn, I accidentally down-arrowed you when I meant to up-arrow you.  Good one, though.

Tue, 11/20/2012 - 23:26 | 3000974 Cheesy Bastard
Cheesy Bastard's picture

Thanks, Al, and no problem on the down arrow.  For future reference though, you can change a down arrow by clicking the up arrow, and vice versa.  By the way, they got the run around from a guy named "Frank".  Heh.

Tue, 11/20/2012 - 20:45 | 3000520 Tom Servo
Tom Servo's picture

Well Doug and Scott, you hitched your wagon to this team of lying sack of shit horses, and you wonder why you end up at the bottom of a ravine.  Decisions have consequences in grown-up-ville....

 

Tue, 11/20/2012 - 20:46 | 3000524 zorba THE GREEK
zorba THE GREEK's picture

Hostess products are some of the worst crap a human can consume.

They are so full of preservatives that I once found a package of Hostess

cupcakes in my glove compartment that had been there for over 6 months.

They still looked like the day I bought them. I threw them out and never

purchased another Hostess product since. If you eat enough of them, you

won't need to be embalmed when you die. Hostess going out of business

is a good thing for the public. Maybe now their laid off employees will find

some honest, productive work. I also look forward to the day that all the

casino workers lose their jobs.

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