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$900 Million Payday Is Billionaires' Reward For Crushing Twinkie-Maker's Labor Unions
Two days ago we reported that according to the new Chief Restructuring Officer of America's "first national supermarket chain", Great Atlantic & Pacific, also known as A&P, Superfresh and Pathmark supermarkets, which just filed its second chapter 11 bankruptcy protection in 5 years, it did so for one main reason: unions, and specifically legacy Collective Bargaining Agreements which made profitability for the (heavily levered) company impossible.
While that argument is debatable, and as we said "if it wasn't for unions, it would be something else, like loading up on massive amounts of debt to repay Yucaipa's equity investment, which would then be unsustainable once rates rose and once interest expense became so high it soaked up all the company's cash flow" one thing that is absolutely certain is that what A&P just did is a flashback to what Twinkies' maker Hostess itself did as part of its November 2012 Chapter 7 bankruptcy liquidation.
Then, too, the company sought to crush labor unions who "refused to negotiate in good faith", and as a result the company went bankrupt, thereby ending all of its legacy labor agreements once and for all.
Sure enough, freed of its cash-draining labor obligations, Hostess suddenly became a very attractive target and not only did it survive but it fourished when in 2013 Private Equity titan Apollo Global Management and billionaire investor C. Dean Metropoulos acquired the maker of Twinkies from liquidation.
Very shortly thereafter, the equity investors did everything they could to reward themselves for an investment in the newly labor union-free company, which was quite viable as a standalone entity because demand for its products was as high as ever (the US will never have a problem with lack of obesity) and tried first to sell the company and then to take it public. They were unable do achieve either, so they decided to take a third route, one which takes advantage of the unprecedented debt bubble.
As Bloomberg reports, "Hostess is selling $1.23 billion of term loans. Of that, $905 million will be used to pay a dividend to its shareholders, according to Standard & Poor’s. That’s more than double what they paid for the business."
Translated: after investing $410 million in March 2013, two billionaires are about to make a $500 million return an investment they have held just over two years, with the blessing of a whole lot of debt investors. And all they had to do was pick up the carcass of a company which did nothing more than crush its unions.
Somewhat snydely, we hope, Bloomberg adds that "the deal is just the latest example of how record-low borrowing costs from the Federal Reserve are encouraging risky companies to add cheap debt -- sometimes to enrich private-equity firms -- as investors clamor for yield."
Not sometimes: every time there is a bond bubble resulting from years of ruinous monetary policy and cheap rates, it is the equity backers who are left with all the profits. In this case, Apollo and Metropolous will make a more than 100% return over a holding period of less than two years.
They are not alone: "So-called dividend deals reached almost $16 billion in the second quarter, the most in a year, according to Bloomberg data. The downside of the loans is they can increase a borrower’s risk of default by piling on debt, without any of the cash going to improving operations or boosting revenues."
“Dividends aren’t designed to create value for the company,” Moody’s Investors Service analyst Brian Weddington said by phone. “This is a return of capital and profits to the founding investors.”
No, the value for the company, its equity sponsors will claim, came from their involvement, and indeed company operations did pick up modestly:
Business at Hostess has improved since the buyout. Earnings have increased “substantially,” said S&P’s Chiem. Revenue has risen to more than $600 million, and earnings before interest, taxes, depreciation and amortization to nearly $200 million, according to S&P. The snack business was able to cut costs by storing its products in a warehouse rather than delivering them directly to stores from where they’re made, according to Chiem.
Happy with their achievement, which was only made possible as a result of the unbundling of the underlying business from its labor union ties, barely one year after their involvement, the billionaire owners sought to capitalize on their investment and Hostess began considering a sale last year, with sources saying in November that the business could fetch as much as $1.6 billion.
The sale process went nowhere, as did a subsequent attempt to take Hostess public.
So, why not follow the path of least resistance, and present credit investors using "other people's money" with the chance to repay them. This is precisely what they did about to happen courtesy of Credit Suisse which is the lead underwriter on the new debt financing.
Credit Suisse is leading the financing, which consists of an $825 million first-lien loan and a $400 million second-lien offering, according to data compiled by Bloomberg. It has asked investors to commit by July 30.
But don't say the new creditors, secured by a whole lot of Twinkies and Ho-Hos in company inventory, did not put up a fight demanding fair terms: "At a July 16 meeting held at Credit Suisse Group AG’s New York offices, potential investors were offered treats including Hostess orange cupcakes, according to three people with knowledge of the meeting. They were also offered an interest rate of as high as 7.75 percentage points" above LIBOR.
End result: a company that went from 2x EBITDA leverage to an eye-popping 6x!
For Hostess, the deal will triple debt levels to about six times a measure of earnings, according to an S&P report this month. Regulators including the Federal Reserve and the Office of the Comptroller of the Currency said in their 2013 leveraged lending guidance that debt levels exceeding six times raise concern as they seek to curb risky underwriting.
The irony is that Apollo would have pulled out even more cash if there wasn't a leverage cap. Still, even with "only" 6 turns of EBITDA in debt, most know how this deal will end:
The dividend demonstrates “a very aggressive financial policy,” S&P analyst Bea Chiem said in the report. The credit grader is keeping Hostess’s corporate rating at B, or five levels below investment-grade, on the view that the baker’s operating performance will continue improving. The junior-ranked loan being marketed is rated CCC+, or seven levels below investment grade.
In short: we give Hostess about 1-2 years before it files Chapter 33: it third bankruptcy a first one in 2004 and the second one in 2012.
Only this time there will be no unions left to blame: it will be all about the insurmountable leverage, and the rapacious greed of its PE sponsors to strip the company of all pledgeable assets and extract as much cash as possible in the shortest possible time, while layering what the IMF would clearly dub is insurmountable debt.
But before you blame them, blame the creditors who made it possible: all those "investors" who were tempted with "Hostess orange cupcakes" to dump billions of other people's money entrusted to then, just so they could generate a modest return.
And before you blame these individuals who are merely looking after their year-end bonus which is contingent on beating some risk (or rather return)-free benchmark, blame the Fed whose 7 years of ZIRP has made this kind of asset strip-mining not only possible but an acceptable, daily occurrence.
Because the end result is clear: after the unions were crushed, and Hostess emerged with a clean balance sheet, the fact that it already has 6x debt guarantees it will be bankrupt once again. The only question is when.
The losers will be the thousands of non-unionized full and part-time workers at the company.
The only winners: the billionaire investors who are about to get even richer thanks to none other than the Federal Reserve and an entire world filled with lunatic central bankers who have clearly taken over the asylum.
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Imagine that, kill the parasites and you can make profits.
greed is god
Greed implies you are taking from someone else. In this case they are creating it through the magic of modern banking and living off the excess.
Pay the bakers less.
When I buy concrete work, for example I set my labor rates to that of the illegal. If the others can’t compete with them, starve.
Twinkies are really crappy junk food but the are good for testing the reliability of an AK-47 https://m.youtube.com/watch?v=kIuni6_K_RQ
Anarcho-capitalist flag. Very nice.
As with all of these articles, zh'ers will not read the text and then say some stupid 'fuck unions.' Ya.. y'all are real 'awake' and enlightened.
Because the end result is clear: after the unions were crushed, and Hostess emerged with a clean balance sheet, the fact that it already has 6x debt guarantees it will be bankrupt once again. The only question is when.
Then who would lend them the money to do the deal?
Oh wait, the banks securitize them up, slap on some worthless AIG type A+ guarantee and default insurance that won't pay, then sell them as AAA gold.
Oh wait, the banks securitize them up, slap on some worthless AIG type A+ guarantee and default insurance that won't pay, then sell them as AAA gold.
>The credit grader is keeping Hostess’s corporate rating at B
7.75%, tough to resist!
As much as unions are hated I hope people realize their purpose is to stand up to tyranical corperations.
Actually it was to get regulations passed to improve working condition in mines and steel works. Had shit to do with corporations, and in fact many corporations just raised their wages to appease the workers into not unionizing. Ford is a primary example of this.
Actually it was to get regulations passed to improve working condition in mines and steel works. Had shit to do with corporations....because mines and steel works were not owned by corporations? Who were they owned by?
He was making a blanket statement about corporations, instead of citing the birth of unions in a specific industry.
The Birth of Unions
Let them eat Snowballs
https://www.youtube.com/watch?v=MeS6DvyLScE
corporations......
I thought Twinkies were the nice fellows who live together down the street? At least that's what all the neighbors call them. There's a cupcake like that too?
I thought their purpose was to facilitate corporate-political objectives such as transfering benefits from employee compensation to crony managed citizen liability and coordiate with CFR-HR shills to crush any segments of the population capable of resisting aristocratic domination (thats absolute tyranny). Because thats what they do. The history of teacher's unions is most profane, but Hollywood has taken the crown from Religion.
Especially when Credit Suisse is getting 50-80bps for making it rain. Bankers need to pay their bills too, you know!
Unions aren't the answer. They're just used as a scapegoat when the Banksters want to rape the peasants.
The real answer is for people to start paying attention and asking questions like:
"How do all these awful trade ageements affect me?"
"Hey why with around 30% real unemployment are we allowing massive waves og legal and illegal immigrants into the country?"
"Why is the income gap between rich and poor bigger than ever? It's like the system is rigged against the little guy hmmmmm"
You know something like that.
ZHers, help educate me. I've read in various articles that the decline of the middle class was largely due to the decline of unions. I know offshoring jobs has also been a large factor, but I'd like some opinions on this.
Did unions help kill of the middle class or did price competition due to a globalizing industrial structure kill US unions, hence killing the middle class?
There's so many factors that are causing the decline of the middle class, unions really didn't have anything to do with it.
The main cause of the decline of the middle class is the fact the we are an Oligarchy and the Oligarchs hate the middle class because they are a threat to their power, and they don't want us using their resources.
Oligarchs control the banks, the fed, the government, large corporations, education, media and so on.
They eventually want to kill us.
At least that's how I see it.
As far as unions go, I think public-employee unions are fucking parasites and are definitely a big factor.
EDIT: But the biggest factor is what detached.amusement says below.
You really do not believe unions had anything to do with the decline of Chrysler or GM?
Seriously?
Ok, let's make this simple:
Some corporations are evil.
Some private-sector unions are evil.
All public-employee unions are evil.
End the Fed.
Anything that prevents two consenting adults from agreeing to a salary/wage is evil.
When your 'consent' is driven by the fact that you're fucking starving, and the oligarchy has rigged the entire game from end to end, yeah. That's not a very valid form of 'consent.'
End the fucking Fed, hang the goddamn banksters - from EVERY COUNTRY, and let's try actual free market capitalism for once.
The entire decline of the middle class can be traced back to one concept:
BANKSTER FRAUD.
A centralized monetary issuing authority is the absolute BANE of a peaceful and prosperous world.
Those are answers that make sense, getting to the root of the problem. I guess I wasn't seeing the forest for the trees, needed to take one more step back.
Ok so the problem is banking and not politicians. Got it.
If Standard Oil was evil because they were a private firm which satisfied the needs of 64% of the market then the Federal Reserve which is a government mandated cartel which controls 100% of the market must be very, very evil, Dontcha think?
understand that congress created the banking system and benefits from the fraud so they don't want it to change.
Some might call it a "cunning plan."
Haven't you seen the revolving door? What's Eric Holder's new job? Where are all them ex-Goldman Sachs execs working? ...
Yes.
DeProgrammed:
First consider a closed Economy: Every worker is someone else's customer. Rich workers, rich customers. Poor workers, poor customers. Of course, if there is no production then there are no customers. Likewise, if there is production but no wages then there are still no customers.
Now add a "leak" to the closed economy: Cheap foreign labour. Now the workers in the expensive economy "kill themselves". They buy the cheaper product, thus destroying their own jobs. Another way of looking at it is as companies off-shore production they replace expensive workers with cheap workers BUT THEY ALSO REPLACE RICH CUSTOMERS WITH POOR CUSTOMERS. (How much stuff from expensive-labour countries gets sold into the cheap-labour countries?) So it is also true that the first company that off-shores its labour makes a profit but all companies who off-shore their labour are killing off the customer base of that economy.
"Why am I not making a profit? I have the cheapest labour. Where did all the rich customers go?"
Two capitalists have their knives at each other's throat. Both say, "Why am I bleeding? My knife is nowhere near my throat."
As the number of jobs decrease, people become more desperate to get a job, any job, and unions are ignored. The de-unionization is an effect, not a cause. Unless the people all decide, "I will not work for less than XXX", unions can't do jack shit. People forget that the power of the union is not in the union reps but in the people themselves. If the people are willing to fight, then the unions can direct the fight. It is only during easy times that union reps can get out of hand (... but if things are too easy then the people won't want to bother giving up a good job for trivial shit either ...) Of course, the unions are irrelevant if the company can not make a profit. Why can the company not make a profit? Cheaper, overseas labour and stupid consumers buying the cheaper product instead of protecting the jobs of their neighbours.
The latter is true: globalisation killed the unions.
Govt is mostly guilty for not protecting their country through border controls and tariffs. Business is guilty for sending labour overseas for a quick profit, thus producing less rich customers. Consumers are guilty for buying the cheaper product and putting local workers out of a job.
"Oh, I buy from Walmart. Freddy's hardware store is too expensive. Oh dear, Freddy no longer gets his car serviced here because he went bankrupt. I wish Joey from Walmart could afford to buy a car and then I could service it for him" ...
But there is more.
Many years ago I asked, "How much of our wealth is due to slavery (cheap foreign workers) and how much is due to technology increasing productivity?" Because slavery-based wealth is not real wealth, it is just a misery-generator. You only have to build big walls around your home if the people next door are much poorer than you. (Okay, plus there really are some idiots out there ...) Unfortunately I still have no answer to this question so I guess I'll have to figure it out myself (one day ....)
ZHers are quick to recognize that if they are not a part of the herd then they will not have to worry about following the herd over a cliff. They are also aware that the herd is easily spooked into running over the cliff. ZHers are mostly aware that if they choose to be away from the herd then they have to find their own way to deal with the crocodiles. But a lot of ZHers don't seem to recognize that the benefit of being in the middle of a herd is that all the crocodiles get trampled by the herd in front of you. (And sometimes an Argentine Ant analogy is better: The ants at the front drown in the process of making an ant-bridge that the other ants use to cross the river.)
The bigger problem, at the moment, is the banksters and their access to free money. Capitalism is no match for an idiot and his banker. Two people work equally as hard, earn the same money, and then go to buy a house at auction. Trouble is, one of them is an idiot (or desperate, but for the sake of this example, I'll stick to "Idiot" even though the person may not be too dumb ...) Point being, the banker lends money to the idiot, the idiot bids up the price too high and ends up buying the house even though he can't afford the repayments. What does the sensible person do? Either he too "becomes an idiot" or he becomes homeless.
But idiots can't afford to make repayments, they go bankrupt, houses go to auction and sensible people get them cheap? The idiot bank that lent the money goes bankrupt and the sensible bankers make a decent living lending sensibly to sensible people? No. That is what is supposed to happen but these days the system is corrupt. Even in a more honest situation, there is a large time lag between the idiot buying too expensive and the idiot going bankrupt. In the mean time, many sensible people have either gone homeless or turned into idiots. Sensible bankers have been sacked for "underperformance", passed over for promotion or gone bankrupt due to lack of business. (Remember, the sensible people couldn't afford to buy houses as they were outbid by the idiots and their banksters).
In 2008, the banksters were supposed to go bankrupt. Instead they were bailed out. Any normal person who underperforms is sacked. Any normal bankrupt is stripped back to minimum assets and minimum wages while they repay their creditors. The banksters kept their jobs, their bonuses, and they continue to lend money to idiots. Houses are kept off market to keep prices high. Houses deteriorate and are demolished while sensible people go homeless.
And even that is only part of the story. The rest can be found in some of the articles on ZH. (Not all articles, ZH has some crazy quirks and biases too, but at least those biases are opposite to what you find elsewhere. Some sit on the swing and look and see that they have to go forwards and there are people out there who are willing to push them forwards. Some sit on the swing and see they need to go backwards and there are people out there who are willing to push them backwards. But you Must remember that THE SWING HAS TO STOP before you can get off.)
To understand the housing / bankster problem, I recommend two books - Michael Lewis's "Liars Poker" and "The Big Short (Inside The Doomsday Machine)". Simple, fun stories with a real, relevant message. No I am not and don't work for Michael but I've recommended these books a thousand times, so apologies again to others who hear me keep raving on about them. If you're not sure about buying these books, see if they're at your library. Then I don't have to feel "guilty" about plugging them all the time.
Consider too, what would it take to compete with the poorer countries? Technology? But now the poorer countries also have access to the same technology. We lower our wages to match? Sure, if Mr Wong is happy to work for $50 per week then I too have to work for $50 per week. But $50 per week in my country barely pays body corporate fees, let alone mortgages, food and all the rest of the bills. Okay, so if my whole country drops its wages, then can we compete? No. Mr Wong lives in a hovel and shares bathroom facilities with 14 other families. Are your housing costs that cheap? We still have debt. First world debt cannot be paid off with third world wages. Shall we devalue real estate costs? If we want to compete then we have to. But companies borrow money and use real estate as collateral. If real estate prices go down then companies go bankrupt as the banks demand more collateral. Now you understand the real estate scam and why it is never mentioned. In the time it took my wages to go up by 40% (due to upskilling - no unions involved), real estate went up by 400%! As you can imagine, I was acutely aware when this happened. Why does no-one talk about the negative effect of debt and real estate one our competitiveness? I think I've already answered that one.
Too much info in one hit? (I hope you still came back to look at this!) If you're ready for a little more then now might be a good time to go to Wikipaedia and look up "Hyman Minsky" and His definitions for the terms, "Hedge Finance", "Speculative Finance" and "Ponzi Finance". Then look at the meaning of "Minsky Moment".
Thank you for the time and excellent response, not too much info at all, I am a sponge! I'll be looking up what you suggested. Always interested in furthering my new education.
Donald, is that you?
Good for them.
They saw an opportunity, risked their asses to the tune of $150 million and reaped a huge return.
All the rest of this article is white noise.
Anyone else reading this post who had the money and saw the opportunity would have made the exact same move.
Fuck the unions who scuttled the original company.
Capitalism works.
- DW
MOAR!!! NEEDZ MOAR!!!
Oh how dare those people intelligent enough to get into a position where they can profit do so. How dare they look out for their own best interests.
You kids are fucking weak.
Your understanding of anarcho-capitalism is fucking weak, please refrain from bearing your idiocy when bearing that flag.
Were you a proponent of anarcho-capitalism, remains to be seen, you would do well to focus on producers and merchants etc. who cater to their self interest by providing a good or service of value to others, win win, capitalism.
These financiers in question, are not providing a good or service to anyone, they are not productive, they are extractive. For a financier to profit today they need not provide any good, value or service to the real world; every profit is someone else's loss in the zero sum game of asset stripping financiers. A game which could not be played in a free or anarchic market devoid of central bankers, interest rate pegs and other such shit you would not be defending if you were ancap.
When habitat is destroyed deer eat residential landscaping. This makes the deer evil. They should simply accept the loss of habitat and starve.
All that time I just spent on a witty rebuttal to your bear analogy. Oh well, bambi is a socialist, just try and eat my bermuda!
Bear with me, deer hart and give me the grizzly details.
When you say, "Deer", are you referring to the two paper-shufflers or the 3000 workers?
These financiers in question, are not providing a good or service to anyone, they are not productive, they are extractive.
Exactly. This.
But what does that have to do with crying over union workers who cut their own throats?
Perhaps the woodland creatures don't see the forest for the trees...or something.
But what does that have to do with crying over union workers who cut their own throats?
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Nothing. I felt this dogmatic nidstyles character was doing a disservice to ancap ideology trumpeting the risk free extraction of almost a billion dollars from a rigged market as 'capitalism'.
Theft of capital through financialization is not capitalism. Feeding a productive company with long-term viability a poison pill of financialization in order to make a quick buck, while destroying the company's existential prospects, is not capitalism, it is its exact antithesis.
"Oh how dare those people intelligent enough to get into a position where they can profit do so. How dare they look out for their own best interests.....You kids are fucking weak"
spoken like a true Luciferian.
"I see an open window, i crawl in, still people's shit. They lose. I win. Self-interest™... shoulda kept their window shut."
"I see a group of 12 year old girls. They're weak. I kidnap 'em, force into prostittion. I profit! Self interest™"
"I tell some people I'm from the EPA and their prime pastureland and watershed is polluted with toxic waste. I'm intelligent. They're ignorant. They sell cheap. I profit. THEY lose! Ha Ha! Self-interest!"
Sucks to be you.
When you get your paycheck that's like raping a puppy. It's true because I self righteously declared it to be true. There is no defense.
Wow Nid, you got the lunatics howling at the moon.
They aren't responsible for their lunatic behaviour though. It is the GMO's, chemtrials, and the jews forcing them to howl.
Two years after Apollo Global Management LLC and Metropoulos & Co. acquired the maker of Twinkies from liquidation, Hostess is selling $1.23 billion of term loans. Of that, $905 million will be used to pay a dividend to its shareholders, according to Standard & Poor’s. That’s more than double what they paid for the business.
The deal is just the latest example of how record-low borrowing costs from the Federal Reserve are encouraging risky companies to add cheap debt -- sometimes to enrich private-equity firms -- as investors clamor for yield.
For Hostess, the deal will triple debt levels to about six times a measure of earnings, according to an S&P report this month. Regulators including the Federal Reserve and the Office of the Comptroller of the Currency said in their 2013 leveraged lending guidance that debt levels exceeding six times raise concern as they seek to curb risky underwriting.
They were also offered an interest rate of as high as 7.75 percentage points more than the London interbank offered rate on the junior-ranking, second-lien loan, with a 1 percent minimum on Libor, Bloomberg data show.
That compares with an average 4.28 percentage points more than lending benchmarks for new first-lien loans sold to investors this month, according to Standard & Poor’s Capital IQ Leveraged Commentary & Data.
Will it still be 'good for them' when it goes bankrupt again? Real brilliant work taking a brand with big revs out of liquidation and then leveraging it the fuck up and paying yourself a big reward right before it goes back into bankruptcy.
https://www.youtube.com/watch?v=T-j5XWo1fPI
Don't worry the Fed will keep the banks that pushed that bad debt whole and make the rest of us eat the loss through inflation. So its all good.
And it all could have been avoided if the unions hadn't priced themselves out of jobs.
Was the company even solvent when they picked it up? You and I have no idea what the real books look like, so they likely did what was in their own best interests and bailed.
The investors reaping this windfall are the beneficiaries of easy lending and desperation for returns. They staged no grand turn around of a failing company. I can tell you explicitly why. The new Hostess products suck out loud.
Check any comment thread on the "new" Hostess and they will tell you the quality is terrible. Mind you, we're talking about mass produced sugar and calorie filled death cakes, so the bar was pretty low to begin with. Apparently those union workers added something to the product after all...
I'll admit to having an affinity for their cup cakes from time to time. Tried some of the "new" cup cakes recently, not only do they taste worse, they were smaller. So for those of you saying "capitalism works" we'll see how long they can maintain sales with a lower quality/quantity product. All we have evidence of is that "crony capitalism" through the FED, whose easy money policies finance so many of these mergers and acquisitions, can make a select few big money.
Capitalism work, just keep watching, when the whole shit show collapses, that is capitalism in action.
You keep conflating that which makes capitalism good and viable with that which undermines and destroys it.
and then you ascribe the same word to both!
*facepalm*
Capitalism DOES work. The problem, in this day and age, is that too many things (i.e., businesses and governmental entities) are run by BANKSTERS and LAWYERS who don't know DICK about how to RUN a business, but most certainly understand financial manipulation and/or the manipulation of people, the laws that govern them and the press that (mis)informs them.
It works when you have it.
What we have is not capitalism.
^TRUTH^
In the land of free moeny, there is no risk.
This is not capitalism, this is finance... extracting money on the short term without any consideration for the perenniality of the company.
100 percent of all bankruptcies are the fault of management, not unions. After all, it was management that entered into the contracts in the first place. This company has been bankrupt twice in the past ten years and I guarantee you it will be bankrupt again. Anyone stupid enough to buy these bonds deserves whatever is coming to them.
Who gave the unions the power? The Feds did. They enabled the unions to block non union labor, and even forced non union workers to contribute to the union coffers.
Give me a break.
Not really. The fed neutered union power when it made most strikes illegal. Sure, in some states you can have non union members pay union dues. However, those dues are considered compensation to the union for negotiating contracts and representing the nonunion workers.
However, these same federal laws prohibit secondary boycotts and sympathy strikes. An employee in the U.S. can only go on strike against a primary employer. For example, Disney employees cannot join a strike against ESPN, a Disney owned corporation, when ESPN workers go,on strike.
Additionally, a union cannot refuse to handle cargo from a nonunion manufacturer.
These laws neutered the labor movement in this country and destroyed worker solidarity. Unions in European countries don't have these restrictions. That is why unions in Europe are stronger and living conditions are better.
Anyone stupid enough to buy these bonds deserves whatever is coming to them.
People buying this shit are rarely stupid, they'll make a mint for themselves and losses will be passed on.
Capitalism is defined as an "economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, especially as contrasted to cooperatively or state-owned means of wealth."
Wealth is defined as "an abundance of valuable possessions or money"
Money is defined as "a current medium of exchange in the form of coins and banknotes; coins and banknotes collectively."
Given this, I don't see how this situation has anything to do with production, distribution or wealth and therefore cannot be defined as capitalism. Perhaps another word would be better. I can think of a few choice ones.
Miffed
Personal initiative is far more valuable than personal morality. Morality is a tool that the weak use to manipulate the stronger.
Strength and pwoer are capital resources in any open exchange. The person bargaigning from a position of strength and power can get a better deal than the person bargaigning with neither.
Morality is a tool that the weak use to manipulate the stronger.
Don't buy into the altruists' false definition of morality. Morality is a function of natural law and a product of reason.
What Is Man? by Mark Twain
Yes, I read that thirty years ago. Glancing over it now I notice that the Old Man sounds a lot like Ayn Rand but without the conviction. Twain's cynicism provided his best humor but as he grew older and saw his wife and children die that cynicism turned in on itself.
Lol. The AK-Twinkie 6
What you just did was the same as someone blaming the rape victim for how she was dressed.
And the current C-level execs will have long pulled the cord on their golden chutes before that implodes.
CHTR / TW merger is going down a similar path.. That aught to be fun to watch as well...
You might want to rethink that, because I'm starving and you sound delicious.
+1 pookie. All your downvotes are coming from people who have no real world small business experience. It reminds me of those slugs clamoring for a "living wage" at entry level unskilled jobs like MCD or WMT. Instead of sucking someones dick and living off someone else's personal risk who started or expanded a business start one yourself. Take a risk. ZH is getting populated with mindless drones sitting in a comfortable office making 40k a year and getting fatter everyday. Losers.
if you dont want to see the problem, why are you looking
By George, you've driven that nail all the way to the board judging by the votes of the too close to home down arrows.
Uhh, sure, right -- and according to creepy.cracker (below) the Twinkie makers got all the way up to 200K / year.
I see that reading comprehension is not your strong point. I'm sorry.
Twinkie-Maker's Labor Unions
Becasue EVERYONE knows that pressing a button on the Twinkie making machine is a "skill" worth $200K/year.
Such highly demanded skills qualifies them to join the Baker's Union. What's that say about the Baker's Union?
Extensive permitting and fees are required to bake these days....its for safety.
rips
Twinkies were gay from the get-go so no trouble with the LGBT crowd there.
Outsource Innovative Financial Products.
Just run over the friggin CEOs
now that democrats allow illegals to come and work for pitance....doesn't really help. I don't like lots of union tactics...but allowing unlimited illegals doesn't help anyone but the rich
It does bring joy in these dark days to hear that a union has been righteously crushed. Faster, please.
Fuck the unions. Everyone needs to learn how to fight for themselves. This why America is decaying, everyone wants a helping hand and then some.
The real concern here should be for the police (another unionized workforce). Without Twinkies what will they eat?
Doughnuts
#41
The NYPD eats people.
I'm against public sector unions, but having a private union is fighting for yourself.
In many cases it is, and was, asking for your job to be sent overseas. "Tlinkies" will start arriving from China soon.
yeah and the cream filling will be laced with industrial chemicals. eat one and you may live. two or more and you are really tempting fate
The "cream" filling is industrial chemicals.
That's true of any job. If you push hard enough and demand increases your job will be given to someone else.
Yup.
No it is not. Joining a union is simply joining hands with the two Corporate wolves that are going to eating you for dinner.
Who exaclty does a public union collectively bargain with?
They don't bargain with a stakeholder like unions do when bargaining with a private or public company. They bargain with peole who have no skin in the game and in fact have a vested interest in giving the union everything it seeks in return for endorsements, money and votes.
It's a sick, twisted system.
What do you expect from the same populace that got brainwashed inthe public education system controlled by unions...
You think the make decisions on the best interest of your children's education?
Actually it's hiring a hit man to do your killing for you.
Everyone but the rising Do it yourselfers known as "preppers". The hobby of "prepping" is a funny one because some of the people that are doing it have great jobs and are now bank rolling since they are not shopping for shit but if anything turning their property into a self sustaining fortress. No helping hand needed, none wanted. No to mention that they are in some cases turning a positive cash flow from ordinary residential properties while still employed full time. No wonder the establishment hates them.
I rent my basement out to 22 illegal aliens.
Gekko would swoon over this deal.
Blue Horseshoe loves Twinkies.
Some unions need to be crushed.
Some corporations need to be crushed--in fact the corporation, as such, needs to be crushed. https://search.yahoo.com/yhs/search?p=the+corporation+movie&ei=UTF-8&hsp...
Unions use the threat of gov't violence to obtain leverage over owners, customers and taxpayers.
Unions are evil.
and illegal invited by democrats are good for wages?
Corporations use the threat of gov't violence to obtain leverage over owners, customers and taxpayers.
Corporations are evil.
#41
And gov't isn't?
" Imagine that, kill the parasites and you can make profits. "
Cool.....now they can continue to push out cream filled death to the useless eaters on EBT. Just what our broken health care system needs. Hey....but somebody's profiting....so it's ALL good.
"Imagine that, kill the parasites and you can make profits."
Let us be perfectly clear here. Parasites extract sucor from their hosts. The parasite in this little parable is Apollo. The workers at Hostess, their victims.
How soon till the next bankruptsy?
And all they had to do was pick up the carcass of a company which did nothing more than crush its unions.
Or, a non slated way of saying it might be that the cancer of the unions killed the company, which was brought back to life by investors who risked THEIR OWN MONEY only after the cancer was removed.
Spin... spin... spin.
That's a bit simplistic. No doubt the union caused the problem for the initial owners. These "billionairs" are using bankster debt instruments to massively enrich themselves, not build up the company. They are far worse parasites than the unions, who I have little love for.
You just outed yourself as a socialist. What is the point of buying a company? Making money FOR YOURSELF is the ONLY REASON.
"Build the company" is just another way of saying, pay taxes, or be a nanny to your workers. You might as well paint your face black and call yourself obama. If you think rich guys owe something to poor folk, go fuck yourself and pick up that ebt card and obama phone.
The officer of every corporation should feel in his heart – in his very soul – that he is responsible, not merely to make dividends for the stockholders of his company, but to enhance the general prosperity and the moral sentiment of the United States.
– Adolphus Green, founder, Nabisco
Naw but your idea of I'm going to get what's mine and screw everbody else is what we need more of in our society. I mean its working so well right now isn't it?
Simply put, if the Unions did fuck themselves and gave into demand earlier they wouldn't have been flushed away.
Nice negotiating.
Unions don't negotiate ,they demand .
Public sector unions don't negotiate, they take hostages.
Private sector unions can be tolerated (though not at my business), public sector unions are traitorous and should be outlawed.
Thank JFK for the public unions.
They gave in to management the first time it went bankrupt in 2009. Obviously that worked out well for them.
Contracts work both ways.
That is not incorrect.
However, by getting repaid for their "risk" (a debatable concept under ZIRP) with leverage that will assure the bankruptcy of the company yet again, this time the "investors" guarantee that thousands of non-unionized workers will soon be out of a job too.
As for the blame game, read the end of the post.
Thank you Tyler for pointing out the Huge investment risk those BILLIONAIRES took. (Thanks for the Money ZIRP).....
Sounds like Credit Suisse is taking all the risk to me. Not the a-holes who put the deal together, they get paid on the front end of the deal.
And exactly where do you think Credit Suisse gets "its" monies to "take all the risk"? They fucking print it up from thin air or less, just enter a few digits against the US Taxpayers' accounts.
The non unionized workers are at no risk so long as people buy the product. If there is a second bankruptcy due to the debt, that debt will be discharged and the company can be re-born again. So it is the debt holders who are at risk, not the employees.
Tyler Durden:
However, by getting repaid for their "risk" (a debatable concept under ZIRP) with leverage that will assure the bankruptcy of the company yet again, this time the "investors" guarantee that thousands of non-unionized workers will soon be out of a job too.
Of course you are entitled to your opinion on the probability of another bankruptcy.
My experience is that no group of bankers lends money to an enity which is certainly going bankrupt. Maybe they had information about thecompany that is not available to you?
Tell that to Greece.
#41
Thats what all these morons on ZH who are bitter and living in a basement dont understand; someone could have lost their bet and been out millions. Too many people on here rail against big business and investors yet do nothing to improve their own lot in life. This article is severely biased in its commentary. Such crap like this wouldnt even have been posted on ZH five years ago.
There simply aren't enough private security guards to protect these fuckers if the population ever turns on them.
How does the quote go? "we are your cooks, your drivers, your landscapers, we guard you while you sleep. Don't fuck with us."
unions killed a US company, and now it has been moved to Mexico and brought back to life... great job! is this how we're going to "compete" in the global economy? taking out more college loans will fix everything!
unions didnt kill that company, though.
why are you spreading lies?
http://money.cnn.com/2012/11/16/news/companies/hostess-closing/
Well, he is the imbecile that diagnosed America's problems (at least in part) as the religious people. Meh, he offers a simpleton's analysis.
if you think only an "imbecile" would believe part of America's problems are religious zealots - you are an imbecile.
and, I'll venture to guess - a bit of a cunt.
'why are you spreading lies' says the guy who links to CNN.
did you read the fucking article you linked to, and have you read anything else, you contemptible scoundrel?
lots o' junks as expected - anything that deviates from the "unions are bad/I just read Ayn Rand and need read nothing else" script will get that...
but 15 minutes on the intertubes reading about it should disabuse you of the notion that eeevil and greedy workers demanding "wages" or "benefits" tanked that company.
Years of mismanagement, by a very overpaid management, killed that company.
So, in essence, go fuck yourselves. I wipe dogma off my shoe - I don't roll around in it.
Sorry Mr. Socialist. You are not special. The mexican or chinese guy can turn a screw and not demand $30 an hour, plus $20 an hour in benefits. Get yourself a decent skill or start your own business. Quit demanding someone else take care of you.
Spoken like a true AmeriKa hating, transnational capitalist A-hole. Lemme guess, you also believe hard work is it's own reward too?
Working-class people, stroked and pumped up when the country had to be built up - the USSR and the left who worshipped the so-called worker's paradise had to be discredited - now the money-class and money changers throw them away like garbage for the cheap illegal mestizos or the slave economy chinks.
Nice economy you and your ilk created and pimp for. I hope that was your soup I pissed in last week.
I hope that was your soup I pissed in last week.
Truely spoken like a member of the Worker's Class. Let's just cut out the middleman, open wide. ;0
I do so much like to watch the trannie tag-team thingie goin' on.
{farflung and the oh-so-delicate thang, please, please, please don't let Mrs_Meat that I'm a'watchin' u 2 go}.
Lovingly,
- Ned
A big problem was the war on poverty and all of its misguided efforts created a horde of useless folks who will keep on breeding and consuming without producing until they suffocate us all.
Don't give a shit, I don't eat Twinkie's and don't belong to a union. If they want to have a money circle jerk, more power to them.....
I'm here for the gangbang.
everything they make - is shit.