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Hostess Twinkies
As Hostess Brands announces its liquidation, the company's management is blaming a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers union—those damn workers wouldn't accept having their pay and pensions cut and their health care contributions increased just a few years after they made similar concessions in Hostess' previous, mishandled bankruptcy. "The forces most responsible" for the liquidation, CNBC's John Carney writes, "were two hedge funds that control hundreds of millions of Hostess debt and which have finally decided they won't squeeze any more filling into the Twinkie."
Only Silver Point and Monarch could have kept Hostess out of liquidation and kept the Twinkie bakery ovens firing. But they were, ultimately, unable to reach a deal with the unions that represents the workers who make and deliver products like Twinkies, Wonderbread and Ding Dongs. Without large union concessions—what some would say, total union capitulation—the hedge funds decided Hostess would have to die.
Hostess has clearly been mismanaged in recent years after having grown through the previous decades in ways that make its structure, including its labor force, especially complicated. But the end game is that private equity firms came in to do what they do: squeeze profits for their own multimillionaire investors at whatever cost to workers and to the company itself. Who cares if tens of thousands of workers are left unemployed and without the means to retire? Not Silver Point or Monarch, as long as they get their money. Who cares if Hostess exists tomorrow? Not Silver Point or Monarch, as long as they get their money.

These union members had faced a slow bleed for years. The only question for them was whether to accept an accelerated bleed and hope it would stop in a few years—but hope that in the knowledge that that was not a priority or even necessarily a desirable outcome to Hostess' private equity owners—or to fight for what they earned. We're hearing, and can expect to keep hearing, a lot about how it's so unreasonable of union members to expect to get the pay and benefits they negotiated and worked for, the pensions they've planned their retirements around. Because this is coming after a generation-long war on pensions and unions and middle-class wages. As AFL-CIO President Richard Trumka said in a statement, "What’s happening with Hostess Brands is a microcosm of what’s wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor."

It boils down to this: You don't get to complain about income inequality and the obscene wealth of the top 1 percent and say that it's unreasonable for industrial bakers and truck drivers to send their kids to college and retire before their bodies are completely broken. When we complain about income inequality, we have to understand both sides, that the chipping away at the compensation and value accorded jobs that were middle-class jobs not too long ago is, by design, the flip side of the 400 households with a combined $1.7 trillion. It's not for sport that we think the top 1 percent shouldn't hold nearly 35 percent of the wealth; we have a problem with that because of the poverty and struggle such concentration of wealth creates down the line, where 50 percent of people hold just 1.1 percent of the wealth, where people from the 50th percentile to the 90th have less than 25 percent of the wealth, leaving nearly 75 percent in the hands of the top 10 percent.

Hostess workers are real people, fighting for what they've earned and facing personal economic disaster. But, as Trumka said, this struggle is also part of exactly the broad economic forces Occupy fought and Mitt Romney represented. This is growing economic inequality in action, and standing for these workers' pensions—even if you don't have one yourself—is fighting an economy of hedge funds and for the top one percent.

Originally posted to Daily Kos Labor on Fri Nov 16, 2012 at 11:39 AM PST.

Also republished by In Support of Labor and Unions and Daily Kos.

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Comment Preferences

  •  Tip Jar (129+ / 0-)
  •  Another example of Bain-onomics. (11+ / 0-)

    And to think nearly half the voters in last week's election thought Romney has good business judgment.

    "The fears of one class of men are not the measure of the rights of another." ~ George Bancroft (1800-1891)

    by JBL55 on Fri Nov 16, 2012 at 11:57:52 AM PST

    •  How many more workers will be Bained (12+ / 0-)

      while the lapdog media pretends it's the union's fault?

      A definition is the enclosing of a wilderness of ideas within a wall of words -- Samuel Butler

      by A Mad Mad World on Fri Nov 16, 2012 at 12:17:20 PM PST

      [ Parent ]

      •  What about the public employee pensions funds.... (3+ / 0-)

        ..which have invested in Silver Point and Monarch?  Do they share in the blame as well?

        And if we want to discuss wage erosion in general, can we blame the UAW as well, which agreed to a 50% wage cut for new hires at GM and Chrysler?

        One possible solution to this mess:

        A federal wage supplement financed exclusively via a tax on wealth, starting at 1% for net worth of at least 50M, going to 8% for the likes of Buffet and Ellison.

        Warren Buffet would contribute 8% of his net worth to the federal government each year to ensure a living wage for the likes of Hostess Brands union workers.

        Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project.

        by PatriciaVa on Fri Nov 16, 2012 at 12:50:19 PM PST

        [ Parent ]

        •  Is that you Mitt ? (2+ / 0-)
          Recommended by:
          Eyesbright, Larsstephens

          The free market is not the solution, the free market is the problem.

          by Azazello on Fri Nov 16, 2012 at 12:57:05 PM PST

          [ Parent ]

          •  What part of my comment do you dispute? (1+ / 0-)
            Recommended by:

            (i) That public employee pensions funds have increased their allocation to private equity, whether it be Bain (LBO), Sequoia (VC) or Monarch (hedge funds)?  The truth is, public sector pension funds have an 8% target return rate, and the only way to even approximate that threshold is by investing in alternative investments.

            It is what it is.

            (ii) That a national wealth tax is viable?  The truth is, at one time, proponents of the national income tax were also seen as radical.  Until they weren't.

            Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project.

            by PatriciaVa on Fri Nov 16, 2012 at 01:01:23 PM PST

            [ Parent ]

        •  Robert Rubin Is A Disaster (5+ / 0-)

          Robert Rubin was a Wall street plant in the Clinton Administration who lobbied for the last vestiges of Glass Stegal to be repealed as Citicorp had spent 300 million in lobbying fees over the previous ten years to get most of Glass Stegal repealed. Rubin leaves Government shortly after it is totally repealed and end up at Citicorp whre he is paid 150 million and from all accounts was an awful executive there.

          Now you want us to follow his latest idea!!!

          He is what is wrong with America-somebody who  professes to want to change lives for the better-but he is willing to enrich himself whether he does.


          •  Citi didn't cost taxpayers anything though (0+ / 0-)

            Sure, they got a big TARP loan but repaid it fully plus $4 billion in interest.

            "The way to see by faith is to shut the eye of reason." - Thomas Paine

            by shrike on Sat Nov 17, 2012 at 02:20:45 PM PST

            [ Parent ]

            •  They Have Helped Destroy the US (1+ / 0-)
              Recommended by:

              By the very nature they are multinational; they have helped destroy the middle class and the US in the process. They have been part pof a banking oligarchy which owns our legislators in Washington and many state governments. They have destroyed democracy and therefore any dynamic growth of the middle class.

              The actions they took which forced them to be bailed out by the taxpayer have far reaching onerous effects on peoples' lives than the simple equation of paying back their Tarp money. By the way, the only way they could pay back the Tarp money is by the policies of the Fed which have allowed the banks to profit but have not compelled them to recover the country through loans to small businesses etc.

        •  public employee pension funds (0+ / 0-)

          invest in parasites that feed on private employee pension funds. How nice.

        •  even Nixon (1+ / 0-)
          Recommended by:

          Very good idea - even Richard Nixon considered a negative income tax - that was geared to very low incomes, but something more widespread could certainly work.  Or maybe eliminate federal income tax for under $250K, which would probably give the average middle-class family just as much net income?  Then the government just keeps the wealth tax.  

      •  So - (0+ / 0-)

        Does all this mean, no more twinkies, cupcakes, and Susie Q's?  Nooooooooooo!

    •  Well, if you take away the stolen votes (0+ / 0-)

      I would bet is is more like 40%

    •  It's good (0+ / 0-)

      business judgment if you own the business.

      The purpose of a business is to make money--for the owners. The shareholders are the owners. Anything else is simply...Communism.  

      Workers? Why, they are there to work. That's why they call them workers.

      Facts matter. Joe Biden

      by kpardue on Sat Nov 17, 2012 at 02:50:19 PM PST

      [ Parent ]

      •  The good news is that (2+ / 0-)
        Recommended by:
        kpardue, devtob

        the Hostess brands are worth more than all the other assets of Hostess combined.  So Twinkies will be coming back, and workers will, eventually, be rehired.

        The bad news is that Twinkies and Ding Dongs and all the other crap food that Hostess sells are coming back.  And you wonder why type II diabetes is rampant?

        The sleep of reason brings forth monsters. --Goya

        by MadScientist on Sat Nov 17, 2012 at 03:09:54 PM PST

        [ Parent ]

        •  New Twinkies will be made by slave labor (2+ / 0-)
          Recommended by:
          devtob, dkosdan

          Horrible though they are, at least the workers got union wages.  The brand will be sold to a slave labor (or nearly so) corporation and the crap will be produced by non-union labor, thereby benefitting only the owners.

          •  Unless the new owners hire back (1+ / 0-)
            Recommended by:

            the union workers with a fair contract, the brand will die.

            All of this is very bad PR for a consumer products company that makes unnecessary, unhealthy baked goods.

            A public option for health insurance is a national priority.

            by devtob on Sat Nov 17, 2012 at 06:17:13 PM PST

            [ Parent ]

      •  There is a difference between building a business (0+ / 0-)

        and harvesting the hard work of others.

        Bain and their ilk simply suck out the value others worked build.  Then they spit out the empty husk, which usually consists of newly unemployed worked whose pensions have disappeared.

        "The fears of one class of men are not the measure of the rights of another." ~ George Bancroft (1800-1891)

        by JBL55 on Mon Nov 19, 2012 at 04:52:54 AM PST

        [ Parent ]

    •  Vulture capitalism at work (2+ / 0-)
      Recommended by:
      northsylvania, devtob

      Buy your Twinkies now. They'll still be good for the 2014 election cycle.

      "Good morning, brothers Koch. I see you're doing well. If I had me a shotgun, I'd blow you straight to hell." w/apologies to R. Hunter

      by RUKind on Sat Nov 17, 2012 at 02:58:21 PM PST

      [ Parent ]

  •  We dodged a bullet with Romney. (14+ / 0-)

    Now it's time to take a look at a tax structure that treats hedge fund income as capital gains, and for that matter, at the capital gains tax rate itself.

    There are perverse incentives in the tax code. That problem won't be solved until we remove those incentives. Simple as that.

    Fuck you, I put on pants yesterday.

    by MBNYC on Fri Nov 16, 2012 at 11:57:55 AM PST

    •  Raising the top income tax rate (0+ / 0-)

      to the Clinton level is a lot more likely than getting rid of the absurd carried interest loophole.

      And all the others designed to benefit the rich.

      The 1 percent are used to paying less, percentage-wise, than a union maid, and they own the Congress in this regard.

      A public option for health insurance is a national priority.

      by devtob on Sat Nov 17, 2012 at 06:30:10 PM PST

      [ Parent ]

  •  Decline Americans can understand (10+ / 0-)

    because it's related to junk food and snacks! LOL

    Loved me some Twinkies growing up.

    But everyone quoted above is right. This economic model, the one used to such personal advantage by Romney, is a large part of what's gone wrong with our country over the last decades.
    The people running a company have no interest in what the company does or makes or whether it's around for the long term or not.
    They certainly have no incentive therefore to invest in the company's future or its workers and their futures.
    The entire focus is how much money can you make and how quickly can you make it.
    And if the quickest way to do that is to liquidate the company and throw people out of work - then freedom baby!
    The workers and unions could see where this was going. Giving bigger and bigger concessions would have only delayed the inevitable conclusion the hedge funds were aiming for.
    People have to make sure this is portrayed as the greedy 1% of Wall Street and the banks taking more for themselves and leaving less for everyone else - again.

    Blue is blue and must be that. But yellow is none the worse for it - Edith Sidebottom

    by kenwards on Fri Nov 16, 2012 at 11:58:18 AM PST

  •  I'm glad it was capitalists who killed the Twinkie (6+ / 0-)

    And not the First Lady's "Let's Move" program.

    The Invisible Hand at work.

    "Work for something because it is good, not just because it stands a chance to succeed." -- Vaclav Havel

    by greendem on Fri Nov 16, 2012 at 12:08:00 PM PST

  •  The Meme -- redistribution versus distribution (3+ / 0-)

    The term "redistribution of wealth" has been used with a nasty connotation.   I think we need to fire back, and talk about the DISTRIBUTION of wealth.    We need to make this THE term to use.

    We need to examine publicly held corporations, and talk about how they pay top executives and compensate labor.   The manner in which assets are distributed in a PUBLICLY HELD corporation, in the first place, is where the problem starts.    Too much profit is distributed to shareholders without adequate compensation for employees.

    We need to have a serious conversation about outsourcing.   Obama needs to have his eyes opened,.   I don't know if he has them willfully closed out of political expedience or if he's in a "bubble", but somehow, he missed the boat on this issue.   I think he's in the "bubble".  His answer was that "industry tells me...".   Well LABOR is telling him that these visas are a problem, but he's ignoring US.   He was standing there talking to labor, telling them about what industry says, and basically ignoring what labor was standing right there telling him.   He has selective hearing, and seems to hear those with the fat pocketbooks.   I'm glad he won the race, but until he gets his ears cleaned out, I'm not sure how much good he's going to be on this issue.

    “There is a huge demand around the country for engineers,” he told her, though adding that “obviously, there are different kinds of engineers,” so the general category doesn’t apply fully. “What industry tells me is that they don’t have enough highly skilled engineers,” he noted, and continued, “If your husband is in that field, we should get your husband’s resume and I’ll forward it to some of these companies that are telling me they don’t have enough engineers.”
    The reason that there is a shortage of engineers is the corporations has purposefully circumvented the labor market, which should have reacted to produce more engineers.  The market response SHOULD have been for corporations to offer higher pay and incentives, and to work with schools to graduate more trained labor, and to train engineers on the job.   But, INSTEAD, they imported cheaper labor through H1B visas, keeping wages artifically low, suppressing the growth of the labor supply, and suppressing the college and OTJ jobs that would have grown a better supply of that labor.   And then they whine to Obama that they just can't find any good help, anymore.   BECAUSE THAT'S THEY WAY THEY WANT IT.

    Anyway, we need to use the word DISTRIBUTION, and have a national conversation about where the problem starts -- with publicly held corporations and outsourcing and other related issues -- and push back hard when Republicans talk aobut REDISTRIBUTION.   We need to have a serious conversation about why we believe that 400 households DESERVE a combined $1.7 trillion, and whether we truly believe, as a society, that these people are entitled to this amount of wealth, or whether we believe that this wealth derives from the labor of other people, and that those people are entitled to a share of the wealth that we create.

    We need to stop being afraid of "wealth redistribution" conversations, and start tackling "Distribution of Wealth" discussions head-on.   And, we need to say, right out loud, that Wealth should be shared by those who work to produce it.

    •  Engineers, Scientists, and Mathematicians (3+ / 0-)
      Recommended by:
      Eyesbright, rhauenstein, gulfgal98

      You said --

      The reason that there is a shortage of engineers is the corporations has purposefully circumvented the labor market, which should have reacted to produce more engineers.

      The market response should have been for corporations to offer higher pay and incentives, and to work with schools to graduate more trained labor, and to train engineers on the job.

      But, instead, they imported cheaper labor through H1B visas, keeping wages artificially low, suppressing the growth of the labor supply, and suppressing the college and OTJ jobs that would have grown a better supply of that labor.   And then they whine to Obama that they just can't find any good help, anymore.   Because that's the way they want it.

      You are absolutely right, and this is going on even as STEM programs are being promoted in the schools.

      "Facts are meaningless. You could use facts to prove anything even remotely true." -- H. Simpson

      by midnight lurker on Fri Nov 16, 2012 at 01:52:09 PM PST

      [ Parent ]

    •  Piece in "The Nation" (0+ / 0-)

      several issues ago talked about  "predistribution".

      If you don't want to be kept in the dark and lathered with horse dung, stop acting like a mushroom.

      by nomorerepukes on Sun Nov 18, 2012 at 11:57:57 AM PST

      [ Parent ]

  •  It's not the unions, it's management! (9+ / 0-)

    You cannot blame the employees for mismanagement. A pension and health benefits upon retirement were promises made to the employees in return for years of loyal service.

    It is not the employees' fault that greedy insurance companies have raised their rates over 1,000% since the 80's, it is not the employees' fault that management, wanting a quick buck, gambled the company's pension funds on the stock market.

    How many employee's salaries equal just the bonuses that are paid out to these hedge fund managers? At $40K/year = 250 employees would have to lose their jobs to pay out just $10 million (5 executives) bonuses.

    It is not the employees or the union that is destroying the company! Don't believe the lies.

    •  Right -- don't blame the workers (4+ / 0-)

      If your company cannot afford the price of the sugar that goes into your products, you don't blame the sugar producers for killing your company.  If you cannot afford the rent, you don't blame the building owner.  If you cannot raise prices, you don't blame consumers for not wanting to pay more.

      If you cannot pay people enough that they want to continue working for you, your business model isn't working.  Unions do not bear the responsibility for keeping your business afloat no matter what.

      See you in Heaven if you make the list. R.E.M.

      by Akronborn on Fri Nov 16, 2012 at 12:48:26 PM PST

      [ Parent ]

      •  Unions don't bear the responsibility... (0+ / 0-)

        ...for the liquidation, that is true, but unions have as much of a stake as anyone (that is the argument here, no?) - so they need to act responsibly - with flexibility and readiness to compromise.

        That said - that is exactly what these union members did. Then the incompetents running the show lowered the bar. Then they delivered an ultimatum that was only designed to cosmetically increase the on-paper value of a company they wanted to do nothing else with but sell to the highest bidder.

        Don't take the argument somewhere where you speak of labor costs like you do of sugar, flour and rent.

        Labor is a partner in the business. That why we think they should be rewarded.

        This business could have survived. The inexorable logic of private equity-driven deals made that impossible. That is the tragedy of this story - that unions are part of the equation, unions do bear responsibility, but they are treated like high-cost commodities instead of as the people who make a company a thriving, successful enterprise.

  •  Gigantism is killing us in every imaginable sense (2+ / 0-)
    Recommended by:
    dmiller64152, Eyesbright

    Will it ever be possible to return to a robust form of at least semi-localism?

    Why do we understand economies of scale so well but not the diseconomies of scale?  Probably because the latter tend to be more diffuse, less connected to the pure internal monetary transactions.

    We've been seeing for decades now what happens when we let these mega-vampires suck the prosperity out of mainstream America, too often sending it not just out of the community but out of the country, too.

    Ideology is when you have the answers before you know the questions.
    It is what grows into empty spaces where intelligence has died.

    by Alden on Fri Nov 16, 2012 at 12:23:33 PM PST

  •  amazing how CEOs and execs... (13+ / 0-)

    ...are now not responsible for their companies' failures.

    i saw the Hostess CEO on Today this morning and basically said "twinkies are dead because unions." with no"as the CEO aren't you responsible if your company fails?"

    you know...something like that.

    "An inglorious peace is better than a dishonorable war." -Mark Twain

    by humanistique on Fri Nov 16, 2012 at 12:27:25 PM PST

  •  Romney should be happy he lost. (1+ / 0-)
    Recommended by:

    If he won, and this had happened, the country would be seeing this in a less nostalgic light.

    It already feels like what Bain usually does.

    But coming on the heels of yesterday, this doesn't help the GOP.

    cheerleaders need not apply.

    by kravitz on Fri Nov 16, 2012 at 12:28:55 PM PST

  •  Hostess Brands vs. real food (9+ / 0-)

    Once a visiting European expressed a desire to eat something "dirty" (= junk food) so I steered him to Hostess cupcakes.

    He actually spat it out saying "I'm sorry but that's just too dirty".....

    If you are raised on real food....your taste buds guide you better.

    I really miss the little local store near my office in London where they sold home made apple turnovers to the after-school crowds. Definitely worth eating. the owners lived behind the store.

    When I lived in France I saw kids eating fresh French bread with some pieces of chocolate as an after-school snack.

    It took me a year of eating real food when I lived in France before I understood how ghastly our American food can be.

    •  Baguette w/ Brie in Tours.....mmmmmm..eom (4+ / 0-)
      Recommended by:
      LNK, ColoTim, Eyesbright, MarkInSanFran

      Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project.

      by PatriciaVa on Fri Nov 16, 2012 at 12:42:58 PM PST

      [ Parent ]

    •  ingredients (5+ / 0-)

      from a story yesterday on Chicago Tribune

      Highland Park native Steve Ettlinger, author of the 2007 book "Twinkie, Deconstructed," said [Twinkie] history started when Continental plant manager Dewar was looking for a way to use shortcake pans that had been used seasonally for a strawberry shortcake knockoff known as Little Shortbread Fingers.  Twinkies, Ettlinger quoted Dewar saying, were "the best darn-tootin' idea I ever had."
      Dewar, who said he ate at least three Twinkies with a glass of milk before bed, eventually became known as Mr. Twinkie, according to the Historical Society of Oak Park and River Forest.

      But the tasty cakes originally made with milk and eggs had a shelf life of two or three days, Ettlinger said from his home in New York City. By the 1940s, postwar America was pushing hard for consumer convenience and had a huge chemical capacity surplus from the war effort, Ettlinger said.  That combination led food scientists to find new uses for, among other chemical concoctions, polysorbate 60. The petroleum-based egg yolk substitute includes a toxic gas used to thicken paint and rocket fuel, Ettlinger said. Polysorbate 60 also happens to be a Twinkie ingredient.

      As food processing evolved, the composition of Twinkies expanded to include artificial butter flavor, high-fructose corn syrup, calcium sulfate and sodium stearoyl lactylate, to name a few. Today Twinkies include about 40 ingredients.

      Ugh!  terrifying.  That said, I'd eat one right now if it was in front of me....

      although it's getting late, you still have plenty of time

      by maracuja on Sat Nov 17, 2012 at 02:32:16 PM PST

      [ Parent ]

    •  We were in France for a week last spring (4+ / 0-)

      The portions were much smaller, but somehow, we were more satisfied with real food. Everything was so good.

  •  Great diary, thanks (1+ / 0-)
    Recommended by:

    "Let us never forget that doing the impossible is the history of this nation....It's how we are as Americans...It's how this country was built"- Michelle Obama

    by blueoregon on Fri Nov 16, 2012 at 12:48:53 PM PST

  •  It's called Capitalism (1+ / 0-)
    Recommended by:

    You can shut it down if you own it.  That's your right.  No one can force you to take any less for your investment than you wish to.   No one.  

    The good news is that, if Twinkies can be made profitably, someone will make Twinkies.  Just not Hostess.

    Intolerance betrays want of faith in one's cause. - Gandhi

    by SpamNunn on Fri Nov 16, 2012 at 01:00:08 PM PST

    •  Vulturism (1+ / 0-)
      Recommended by:

      Is NOT capitalism with a big 'C' nor frankly a small one, unless you and friends enjoy being screwed, disrespected and you don't feel you have any worth nor your contributions to the workplace are worth much!!!!!!!!!!!!!

      Vets On FLOTUS and SLOTUS, "Best - Ever": "We haven't had this kind of visibility from the White House—ever." Joyce Raezer - Dec. 30, 2011

      by jimstaro on Sat Nov 17, 2012 at 02:28:17 PM PST

      [ Parent ]

      •  Rentier capitalism (0+ / 0-)

        Living off what's already there instead of making and selling something new, entrepreneurial capitalism. The most degenerate form of rentier capitalism, actually; it doesn't just live off what it already has, it destroys it. Such people were universally hated by classical economists.

        "They smash your face in, and say you were always ugly." (Solzhenitsyn)

        by sagesource on Sat Nov 17, 2012 at 02:47:13 PM PST

        [ Parent ]

    •  When is a contract not a contract? (1+ / 0-)
      Recommended by:

      When one of the parties is a worker.  Funny how contracts between owners are always valid.

      As far as I know, capitalism includes honoring written contracts, even if all the investors want to "shut it down".

    •  No it isn't capitalism. Capitalism is an economic (2+ / 0-)
      Recommended by:
      Brian1066, schnecke21

      system based on private ownership of the means of production and the creation of goods and services for profit.  These private equity pirates have no real intention of producing goods and services for any longer than it takes for them to loot the company of all of its value and leave the carcass for the lawyers and the creditors to fight over.  They are not stupid, they run financial projections, they know the companies they pillage cannot last for long, burdened with the amount of debt they pile on, in addition to the plethora of fees they extract year after year.  No, this is not Capitalism in any honorable sense at all, and your characterization of it as such is either naive or deliberately obtuse.  I was in the Junk Bond business for twenty years, I know of what I speak.  I could tell you stories.....

      "Too often we enjoy the comfort of opinion without the discomfort of thought." - John F. Kennedy -7.8., -6.6

      by helpImdrowning on Sat Nov 17, 2012 at 03:45:43 PM PST

      [ Parent ]

  •  Just got back to the grocery store. (2+ / 0-)
    Recommended by:
    Phil S 33, el dorado gal

    Saw a man ask an employee where the Hostess Cupcakes were located.  The employee directed the man to the nearby aisle and told him there has been a "run" on Hostess products.

  •  As I see it... (4+ / 0-)

    ...all of those bakers whose jobs were lost have now been liberated to go out and bake better goods. Lord knows there's a need for it. That Hostess shit is poison.

  •  yep (0+ / 0-)

    Continental bakery just north of Denver was there when I went to H.S. about a mile away. It employed folks at a good wage for decades...


    Cream filled chocolate cupcakes

    Fuckin WONDER BREAD!

    and jobs...

    "Wonder bread builds strong bodies..12 WAYS!"

  •  Consider this (3+ / 0-)
    Recommended by:
    Blackhawks, Brian1066, schnecke21

    Despite what the Supreme Court says, corporations are not people they are legal entities that exist because we say they do.  The structure, behavior, ownership, etc. is all governed by laws, laws that are created by we the people through our elected state representatives.    There is no reason that we have to allow these kinds of financial games to be played with a corporation's assets.  None at all.  Yes, sometimes the creative destruction thing results in something better, but what we are seeing with these hedge funds is not creative destruction, it is just plain destruction for the financial gain of a few.  The cost to the economy and to our society far exceeds whatever value there is in all of this.  Our corporate and tax laws need to reward companies and owners who build something or improve things, not those that gut viable organizations in order to reap unearned profits.  It is our economy, all of ours, and we should begin to make choices that benefit all and not just a few.  

    The difficulty lies not so much in developing new ideas as in escaping from old ones! - John Maynard Keynes

    by Do Something on Fri Nov 16, 2012 at 05:22:58 PM PST

  •  Hostess lasted what, 87 years? (0+ / 0-)

    Sounds like it had a good life.  Its execs pulled the plug after a long illness...

    Conservatives need to realize that their Silent Moral Majority is neither silent, nor moral, nor a majority.

    by nominalize on Sat Nov 17, 2012 at 06:28:02 AM PST

  •  All the while, the execs were boosting their (8+ / 0-)

    own pay as much as 300% for "bonuses."  Skimming off the top before shutting it down.  But it's the union's fault.

    "It's not like lightning or earthquakes. We've got a bad thing made by men, and by God that's something we can change." John Steinbeck

    by Snarky McAngus on Sat Nov 17, 2012 at 02:08:13 PM PST

  •  The Union should buy the brand and operate it (1+ / 0-)
    Recommended by:

    itself.  Finally having control of all of the means of the production of Twinkies would, I am sure, be a very sobering experience.  

    Intolerance betrays want of faith in one's cause. - Gandhi

    by SpamNunn on Sat Nov 17, 2012 at 02:15:06 PM PST

  •  The hedge funds did nothing wrong (0+ / 0-)

    "Who cares if tens of thousands of workers are left unemployed and without the means to retire? Not Silver Point or Monarch, as long as they get their money."

    Which is as it should be. It's not the job of the hedge funds to employ people for life. If these people haven't earned enough to retire then that's either their fault for agreeing to work at too low a salary, or else the government's fault for not setting a high enough minimum wage or providing a strong enough safety net. But it should never be the investors fault for not looking out for the employees. That would be a massive conflict of interest.

    •  Why are hedge funds so (0+ / 0-)

      privileged as to be allowed--through non-regulation--to destroy companies? They may not be at fault (although they are, really; they stripped the company of profits that could have been plowed back into operations/salaries/pensions), but they are responsible. Hedge funds and other similar corporate byproducts of an unregulated capitalism have no "job" at all except redistributing revenue away from the companies that earned them toward others.

      "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

      by bryduck on Sat Nov 17, 2012 at 02:21:01 PM PST

      [ Parent ]

      •  Explanation (0+ / 0-)

        "Why are hedge funds so privileged as to be allowed--through non-regulation--to destroy companies?"

        Because companies are supposed to be killed off at the end of their life cycle. Once they can no longer grow or earn steady profits then the money it takes to run them would be better off deployed elsewhere. At this point in time if you had a billion dollars it would make a lot more sense to invest in a company like SpaceX or Tesla rather than bailing out Hostess. Owning hostess is like having a billion dollars. It makes more sense to drain them of all their money and put it into another company that would be both more profitable and possibly better for society.

        "Hedge funds and other similar corporate byproducts of an unregulated capitalism have no 'job' at all except redistributing revenue away from the companies that earned them toward others."

        As a business owner you can choose to keep your company private, or you can choose to sell it. You can't have your cake and eat it too though.

        The fact is that Hostess employees basically made their living poisoning children. Firing them all and making them find jobs that actually benefit society can really only be a net win.

        •  Some of what you say is true, but not inevitable. (0+ / 0-)

          It is eminently possible that there could instead be laws regulating the disbursal of revenues regardless of ownership, limiting the ability of Bain-like entities to strip a company of everything that has value, which would have the effect of "re-naturalizing" the life cycle of the company. The current behavior creates an artificial decline of profitability and subsequent death; the results of which we see as a radical decrease in competition in the marketplace. It also seems to me that you think investors are omniscient and possibly beneficial to society, which I think is naive; who's to say that hypothetical billion dollars from Hostess is going to go to a more profitable company at all, let alone one that does any good for anybody? Looking at the top 10 Forbes fastest growing companies, we find an oil refiner, another oil and gas company, a Chinese company, a mortgage financier, an athletic fashion designer/manufacturer, Apple, a laser manufacturer, and another energy company. Which one of those can really be touted as beneficial to our society, as an example? Obviously there are many other choices, but it takes real genius to be able to find even one that you can bet will be both successful and beneficial, and that's assuming the investor even cares about the latter.
          I find your attitude toward Hostess employees condescending as well. You must be a hoot at parties--unless you only go to those where no alcohol, soft drinks, or snack foods are served.

          "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

          by bryduck on Sat Nov 17, 2012 at 03:42:11 PM PST

          [ Parent ]

      •  Steal a twincky from the factory=theft (1+ / 0-)
        Recommended by:

        Steal from the company by loading it down with debt to pay unnecessary management fees and bonuses that did not come from operation, and your are considered a great America capitalist and Patriot.

        Ain't America Great???

    •  The funds' existence is what's wrong (0+ / 0-)

      That's an oversimplification, of course, but it makes the point: The economy is currently structured to make financial predation systematically more lucrative than production.

    •  I'm sorry but wow, you are so obviously lacking (0+ / 0-)

      in the ability to see the forest for the trees that it is mind boggling.  If you knew anything, at all, about business, you would not have made this ridiculous comment.  It is drivel. You should be over at Free Republic.

      "Too often we enjoy the comfort of opinion without the discomfort of thought." - John F. Kennedy -7.8., -6.6

      by helpImdrowning on Sat Nov 17, 2012 at 03:55:29 PM PST

      [ Parent ]

    •  Nothing wrong...hmmm... (0+ / 0-)

      No - the Fund managers did nothing wrong - our system allows private investors to buy the distressed debt of a struggling company and do with that company whatever they like. That is the price we pay as a society to enjoy the benefits of an open market system where investors and entrepreneurs can easily employ their skills and capital where and as they see fit.

      But, is it the unions fault for 'agreeing' to work at a low salary? Forced is more like it. And, then you say it's the "government's fault"? Are you not championing the free market here?

      The fault here is in a system where Silver Point et. al. maximize their profit by shutting down the company.  Do you not understand? They get PAID. We pay. They get paid, but the rest of us are on the hook for the unemployment checks, the health costs, food stamps, you name it. The guy with a small business down the street bears the cost of the lost customer base - in the form of workers who used to get a decent paycheck but are now using public resources to get by. The Hedge fund and private equity managers get PAID - the rest of us bear the costs.

      That is a broken system.

  •  Speakin of Hostess (2+ / 0-)
    Recommended by:
    Lily O Lady, maryru

    Wall street vultures are blaming workers for getting rid of your sweets—and that’s just not right.


    Sign on to the AFL-CIO Shoutout!!

    Vets On FLOTUS and SLOTUS, "Best - Ever": "We haven't had this kind of visibility from the White House—ever." Joyce Raezer - Dec. 30, 2011

    by jimstaro on Sat Nov 17, 2012 at 02:20:00 PM PST

  •  I would like to see... (1+ / 0-)
    Recommended by:

    A breakdown on Hostess wages. Lets look into what upper management was paid vs union members.  This could be a real opportunity to disect the negativity of vulture capitalism.

  •  Hostess is gone (0+ / 0-)

    because we don't eat that crap anymore. Like NPR said yesterday, if a bakery started up today the last thing they would do is create a preservative-packed piece of trash like a Twinkie.

    Hostess did not adapt. And equity firms don't know shit about nutrition.

    No Jesus, Know Peace

    by plok on Sat Nov 17, 2012 at 02:23:58 PM PST

    •  I must disagree- and the NPR story was anti-union (2+ / 0-)
      Recommended by:
      plok, Ender

      Here's the comment I posted at NPR concerning that horrible anti-union propaganda.
      This is really bad journalism - it's anti-union propaganda.

      I found out more about this story in ten minutes of research than Alisa told in the entire story. Here's a link to some actual journalism:

      For instance - Hostess is in it's second's an empty shell of the company it once was because a series of leveraged buyouts left it saddled with debt. Management demanded and received concessions from the unions to

      "give up thousands of jobs and millions in benefits"
      (from the Forbes article linked above).
      In 2011, tittering on the edge of it's second bankruptcy management turned again to the unions for even more concessions.

      Union members had been burned before by management and then...

      " Some unsecured creditors had informed the court that last summer -- as the company was crumbling -- four top Hostess executives received raises of up to 80%."
      On top of that --
      "Driscoll, the CEO, departed suddenly and without explanation in March. It may have been that the Teamsters no longer felt it could trust him. In early February, Hostess had asked the bankruptcy judge to approve a sweet new employment deal for Driscoll. Its terms guaranteed him a base annual salary of $1.5 million, plus cash incentives and "long-term incentive" compensation of up to $2 million. If Hostess liquidated or Driscoll were fired without cause, he'd still get severance pay of $1.95 million as long as he honored a noncompete agreement."
      So Hostess was looted by the management and investors over and over again until there was nothing but and empty shell.

      But did Alisa Chang report ANY of that? Did she even hint at the dismal record of looting by hedge funds and investment firms? Not a whisper.

      I would expect this sloppy biased propaganda from Fox News or Audie Cornish. Unfortunately it looks like we've got another propaganda artist in Alisa Change.

      And this is during pledge drive week! I can get this kind of trash at Fox News for free.

      •  I didn't hear the entire story (0+ / 0-)

        and I hope they respond on-air to your comments. But I assume that whenever a company gets sold to investors that it's already too late. Whether it's the first time, or if it's food or parts, etc. Perhaps NPR could do a story on the kinds of companies that tend to sell themselves to save themselves. I find it all rather dubious.

        On top of that, I'm really not interested in the story because my family simply does not eat that stuff anymore, even though like most people I grew up on the stuff. So maybe there's a bit of apathy toward this story from many directions, including NPR.

        No Jesus, Know Peace

        by plok on Sun Nov 18, 2012 at 06:03:19 AM PST

        [ Parent ]

  •  bad timing: twinkies go away as weed (2+ / 0-)
    Recommended by:
    bobtmn, davethefave

    becomes legal?

  •  I started arguing this one at work with (5+ / 0-)

    a Fox-watching colleague and continued it last night on Facebook after a childhood friend asked if "someone could please explain to him why accepting an 8% paycut wasn't preferable to the permanent loss of 18,000 jobs, and weren't the "union bosses" completely irresponsible in recommending this strike?"

    Even after I posted the facts of long-term mismanagement, 6 CEOs in 8 years, the planned closing of many plants regardless of the contracts, and the list of doubled and tripled salaries of senior management just a few months ago, including the CEO from $750K to $2.25M, I did not get any empathetic comments.  Beyond the ignorant (and of course irrelevant) comments about Obamacare, there were also several plain anti-union comments. The people commenting are white working class people mostly without college educations — people just like the strikers — but they felt the strikers should be "grateful to have a job at all."  

    My tea party colleague at work used a similar phrase. I honestly don't understand it. Some kind of national Stockholm syndrome?

    •  Welcome to the race to the bottom. n/t (0+ / 0-)

      "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

      by bryduck on Sat Nov 17, 2012 at 02:31:30 PM PST

      [ Parent ]

    •  Not binary (3+ / 0-)
      Recommended by:
      kpardue, helpImdrowning, schnecke21

      Follks who use Hostess as a justification for union-bashing are missing the point.  While the union members may or may not have made the best choice in their decision to strike, they are most emphatically not the people who destroyed the company.

      It wasn't the union that bled the company dry and mismanaged it for the past decade.  It wasn't the union that caused management to give themselves big pay increases while telling everyone else at the company to take it on the chin.  

      And the workers most definitely shouldn't be "grateful to have a job at all" -- that's the sort of attitude that leads to an abusive environment, period.

      That said, hopefully the union members who voted to strike did understand that their decision was between taking a bad deal and being unemployed, since it was clear that management was going to liquidate the company before giving in.  I can't second guess that decision since I don't work there -- but I will note that sometimes a job environment can become so toxic that you just can't take any more of it.  And perhaps the union members had arrived at that point.

      Political Compass: -6.75, -3.08

      by TexasTom on Sat Nov 17, 2012 at 02:39:35 PM PST

      [ Parent ]

    •  National Stockholm syndrome? (1+ / 0-)
      Recommended by:


      I worked with people who excoriated our management for the bonuses and high pay checks, and then they turn around and agitate for "fair and flat taxes" lower taxes for the upper 1% etc.

  •  Bakers & takers. (2+ / 0-)
    Recommended by:
    sagesource, Magnifico

    Who cares what banks may fail in Yonkers. Long as you've got a kiss that conquers.

    by rasbobbo on Sat Nov 17, 2012 at 02:29:10 PM PST

  •  What? No mention of the nutritional content? (1+ / 0-)
    Recommended by:
    Stuart Heady

    Sure this is a story of industrial relations, but you can't really taste the full well preserved irony of this story until you report on the fact that that company and those jobs are all built around pumping out food that rots teeth and provides no nutritional value.

    The story is bigger than the union jobs.  There is a kind of tragedy involved in the way in which those jobs are reliable producers of dental caries and diabetes and bad academic performance.   This is JUNK food.  It is "food" as a commodity divorced  from the health creating power of real food, food reduced to a purely market model that is indifferent to the well being of the consumer, and the worker too.

    This is a poverty creating product, a sickness creating product for those who purchase it, and it's not particularly healthy for the workers to work at creating it (as an economic matter.)   There are layers of sickness here.  Many layers.

  •  And this very dynamic, in a nutshell, is why (1+ / 0-)
    Recommended by:

    Romney wanted the GM and Chriysler to file for bankruptcy absent any govt intervention: because it would have put the auto unions out of the picture and put the vultures in a dominant position to demand the de-unionization of the US auto industry as a precondition for receiving any private loans to emerge from bankruptcy.

    "Well, yeah, the Constitution is worth it if you succeed." - Nancy Pelosi // Question: "succeed" at what?

    by nailbender on Sat Nov 17, 2012 at 02:36:04 PM PST

  •  Twinkies failed because they made a lousy product (0+ / 0-)

    For decades they pretty much had the monopoly on junk food in filling stations and connivence stores.

    In the face of increasing competition that made a better product they continued to make a lousy product.

    Their recipes are not the fault of the union. Their management decisions to not produce a competitive produce in a changed market is not the fault of the unions.

  •  It's also an example of what happens when you (0+ / 0-)

    reduce quality in an attempt to improve margins.

    Have you had a twinkie recently? They just taste like chemicals. The sponge is dry and the scant filling is greasy.

  •  The sancity of contracts (1+ / 0-)
    Recommended by:

    is sooooo important as long as it's the little guy the gets screwed in the end. Tell ya what, if you're under water in your house, pack up, walk away and screw em' - it's no less than they'd do to/for you. Once the rich discovered that poor people were honest, the table was set and the gilded cannibals went to it.

  •  Jeopardy (1+ / 0-)
    Recommended by:

    Contestant:  "I'll try 'Food Like Substances Known To Cause Obesity, Diabetes, and Cancer,' for 400, Alex."

    Trebek:  The answer is Twinkies.

    Contestant: "“What will be the primary food source for cockroaches after a nuclear apocalypse?”

    Trebek:  Correct!

    •  Hilarious (0+ / 0-)

      I give you an honest lol for that!  Yeah, they're not anchor of a good diet, but even dumb little treats sustain a few jobs.  And now, maybe they won't even be there if there's an apocalypse.

      A mind is a terrible thing to close.

      by alliwant on Sat Nov 17, 2012 at 06:00:01 PM PST

      [ Parent ]

  •  Another side of "what's wrong".... (1+ / 0-)
    Recommended by:
    Online seller asks $300 for 3 boxes of Twinkies, hours after Hostess Brands shutters bakeries - @AP all levels
  •  We should tax the hell out of those 400 families. (3+ / 0-)
    Recommended by:
    kpardue, helpImdrowning, lurkyloo

    They are the moochers.  That wealth is not reinvested in the productive capacity of the US economy.  Nothing but a bunch of rent seekers.

    Yes, yes, I know someone will say but ohhhh they earned it and it is theirs and all that.  Well, I'm tired of being trickled down upon, LOL, by the uber wealthy.  They and their apologists can all kiss my royal Irish-American ass.

  •  This is why we need more regulations (1+ / 0-)
    Recommended by:

    Having worked there for 27 yrs.this was legal raping of a company,class warfare on steroids "BAINED"

  •  Lots of red herrings in this thread. (3+ / 0-)
    Recommended by:
    nomorerepukes, helpImdrowning, Zaq

    That the product was not very good does not justify the way in which management has behaved. I have to seriously question the honesty of anyone who argues that way. If the market was behaving as it should, declining sales would have prompted more attention to product quality, not looting and burning the entire organization.

    "They smash your face in, and say you were always ugly." (Solzhenitsyn)

    by sagesource on Sat Nov 17, 2012 at 02:54:15 PM PST

  •  uh huh (1+ / 0-)
    Recommended by:

    It boils down to this: You don't get to complain about income inequality and the obscene wealth of the top 1 percent and say that it's unreasonable for industrial bakers and truck drivers to send their kids to college and retire before their bodies are completely broken.

    If the repeated stereotype is always that unions are hordes of lazy, entitled grifters ripping off their members like devils whilst execs at the top are extolled like living gods for their always-benevolent "job creation" -- then at what point does it becomes clear that the power possessors at the top do not in any way wish for those below them to be anything but chattel slaves, and that they will repeat any propaganda to achieve that end?

    Maybe we should wait until enough people are making 8 cents an hour before the Revolution. After all, Here Comes Honey Boo Boo is on.

    "Some of you are going to die... martyrs, of course, to the Freedom that I will provide!"

    by emperor nobody on Sat Nov 17, 2012 at 02:56:15 PM PST

  •  I am torn. (0+ / 0-)

    Because I hate to see American jobs lost. On the other hand, while I wouldn't go with the Bloomberg ban stance on these things, is the country worse off if Twinkies and Wonder Bread are unavailable? I mean, that's a health care benefit on its own.

    by Magenta on Sat Nov 17, 2012 at 02:57:11 PM PST

  •  I've never tried a Twinky. (1+ / 0-)
    Recommended by:

    I always meant to try one. You could buy one to keep, like a pet rock. I hear they last forever.

    Facts matter. Joe Biden

    by kpardue on Sat Nov 17, 2012 at 03:03:12 PM PST

  •  a microcosm in multiple ways (0+ / 0-)

    As regards the rift between management & workers, sure.

    But look at the products!!  The products have no nutritional value, and their popularity is reflected by the ill health of too many Americans.

    I absolutely feel for the workers ... but from health perspective, the U.S. is better off with store shelves devoid of these products.

  •  Trumka nails it. (2+ / 0-)
    Recommended by:
    helpImdrowning, KnotIookin

    Just to repeat the clearest statement yet on what happened to Americans and the American economy: "What’s happening with Hostess Brands is a microcosm of what’s wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor."

    Nobody's said it more clearly or more profoundly. This has to be the post-election battlecry.

  •  Thanks for another great story (0+ / 0-)

    Once again you've done a great job reporting.

  •  pay raise = bankruptcy (1+ / 0-)
    Recommended by:

    Hostess Twinkies’ CEO tripled his salary to $2.55 million while the company was preparing to go into bankruptcy.

    And nine top executives saw massive pay raises, some nearly doubling their salary.

    Ah, another greedy CEO who courageously blamed the union for his failure, while omitting the part about tripling his own pay while preparing to go under. Damn unions, indeed.....

  •  Good names for mismanagement of Hostess (0+ / 0-)

    Ding Dongs
    Ho Hos

    What ever these brands morph into I will never buy until I know if the workers are union or working for lowest possible wage.

    Psst!!!......GOP you lost.

    by wbishop3 on Sat Nov 17, 2012 at 03:32:47 PM PST

  •  The sequence goes like this: (0+ / 0-)

    Hostess companies close the doors, files bankruptcy and liquidates, selling off the property including vehicles, plants, equipment, trademarks and licenses to the Hostess brands.

    The investment company currently waiting for this all to happen, buys it all up on the cheap, hires non-union workers, and starts making the Hostess brand of shit all over again.

    Hostess won't be gone for long.

    ...someday - the armies of bitterness will all be going the same way. And they'll all walk together, and there'll be a dead terror from it. --Steinbeck

    by Seldom Seen on Sat Nov 17, 2012 at 03:37:14 PM PST

    • really doesn't... (0+ / 0-)

      Hostess files for Ch 11 bankruptcy in January 2012.

      At some point hedge funds buy up Hostess debt - before or after bankruptcy filing.

      Debt holders gain control of company and try to work out a solution, putting in $30mm of additional funds.

      The investment company that had put in $130 million in equity loses everything.

      The debt holders and the unions cant agree on a restructuring, so debt holders force conversion to a CH 7 liquidation.  

      Assets auctioned off, equity holders wiped out, debt holders get pennies, pension probably voided, workers screwed.... all happens again.

  •  I'm sorry but that Twinkie looks good (0+ / 0-)

    I know, I know.  Sue me.

    Nobody puts Baby in the binder

    by chicago minx on Sat Nov 17, 2012 at 03:50:07 PM PST

  •  Both Democrats and Republicans instead (1+ / 0-)
    Recommended by:
    Tenn Wisc Dem

    of fixing the postal retirement issue are rushing to dismantle the US Post Office. What if some hedge fund raids the private companies that take over the business, sends them into bankruptcy  and we have no mail delivery at all, public or private?

    "...on the (catch a) human network. Cisco."

    by hoplite9 on Sat Nov 17, 2012 at 04:01:59 PM PST

  •  It's our Pawn Shop Economy. Sell off (0+ / 0-)

    everything to sustain a lavish lifestyle until everything collapses.

    "The object of persecution is persecution. The object of torture is torture. The object of power is power. Now do you begin to understand me?" ~Orwell, "1984"

    by Lily O Lady on Sat Nov 17, 2012 at 04:11:23 PM PST

  •  One of these plants is in Tulsa, OK (0+ / 0-)

    I was pleasantly surprised when the television news story began with a worker saying something like "It's just greed, nothing but greed," continued with people talking about how their pensions had been taken away and they had given up other concessions.  The story made no attempt to contradict the workers.  If that can happen in Tulsa, maybe there' some hope.

    Five years after I chose my username, happily living somewhere else.

    by Tenn Wisc Dem on Sat Nov 17, 2012 at 04:54:11 PM PST

  •  Union declined a reasonable offer (0+ / 0-)

    I couldn't help but wonder what sort of offer the union found so disagreable.   According to CNN

    The workers were offered a 25% equity stake.
    The salaries were to drop by 8% in year one, then go up a total of 10% over the next four years, basically putting them back where they are now.

    Owners were offering real equity to the workers in exchange for assistance from the employees to manage the company debt, and hopefully come out stronger.

    People should not blame management without considering what the employees  walked away from.  Sounds like a pretty good offer to me, considering the trouble Hostess was in.

    The teamsters (6700 workers) voted for it, the bakers voted against it.

    The new contract cut salaries across the company by 8% in the first year of the five-year agreement. Salaries were then scheduled to bump up 3% in the next three years and 1% in the final year.
    Hostess also reduced its pension obligations and its contribution to the employees' health care plan. In exchange, the company offered concessions, including a 25% equity stake for workers and the inclusion of two union representatives on an eight-member board of directors.

    Religion gives men the strength to do what should not be done.

    by bobtmn on Sat Nov 17, 2012 at 05:16:36 PM PST

    •  Equity in a dying company? (1+ / 0-)
      Recommended by:

      From hedge fund managers that had managed to run the company into the ground? You've got be kidding.
      On top of that management would cut worker pensions, salaries and increased their health care costs.
      And workers are supposed to trust management to increase their pay in coming years? The same management that had given themselves huge raises at the same time they're asking for cuts from the workers?
      And for what? For a couple of union seats on an eight person board - what good would that do? They'd be voted down every time.
      Where was the cut in management salaries?
      Where was the cut in management pensions and increase in management healthcare?
      Why would the union members trust management to honor this proposal when, as part of the proposal,  management was reneging on pension agreements?
      If you think that sounds like a good deal then you've got a few screws loose.
      The only reason to take that deal was out of desperation. It was a sleazy move from a management that couldn't be trusted.

      •  You are right. (2+ / 0-)
        Recommended by:
        lurkyloo, Ender

        After reading the details in "Inside the Hostess Bankery", I change my mind.   The unions were probably right to walk away.    Even if they knew that their action would lead to closing the company, they had every right to draw the line.

        I don't think I have had a hostess product in 40 years.    

        No company can survive if it is not making money, and bad management decisions are usually to blame.

        Religion gives men the strength to do what should not be done.

        by bobtmn on Sun Nov 18, 2012 at 06:18:42 AM PST

        [ Parent ]

  •  Wish I could feel sorry for the employees (1+ / 0-)
    Recommended by:

    but they have been employed making crap.

    Never promote men who seek after a state-established religion; it is spiritual tyranny--the worst of despotism. It is turnpiking the way to heaven by human law, in order to establish ministerial gates to collect toll. John Leland

    by J Edward on Sat Nov 17, 2012 at 05:34:33 PM PST

  •  Killing the Goose? (1+ / 0-)
    Recommended by:

    The one that laid golden eggs, that is.  That's what I think every time I hear of a business that is being chloroformed because rich investors aren't making enough money.  Many of the wealthy few don't seem to understand that working stiffs with a little more money is good for the economy, the nation and the world.  That's what really drives job creation, prosperity, and a better life.  

    With Mitt slinking off into the sunset, at least we will not have one of these vampire capitalists running the government.  His business experience didn't get close to impressing me.  He built a fortune.  That's not the same as building an economy.  It's pretty near the opposite.  He vacuumed up wealth and left the working people in the lurch.

    Fortune building leads us to become a banana republic, which is not in the best interest of anyone but the wealthiest few.  As another kossack brilliantly puts it, "The wolf pack eats venison.  The lone wolf eats mice."  I'm lucky enough to work in a business mostly run by immigrants who understand that they have to be somewhat equitable for the common good.  Too bad all businesses are not run with an eye to the common good.  I'm sure the folks getting shafted at Hostess would have appreciated that.

    A mind is a terrible thing to close.

    by alliwant on Sat Nov 17, 2012 at 05:50:20 PM PST

  •  Now you employees (0+ / 0-)

    can get a real job doing something that helps people instead of manufacturing slow-poisonous pseudo food.

  •  I'd like to know (0+ / 0-)

    why Dick Gephardt's son Matthew is on the Hostess board as an independent contractor pulling in a cool $100,000 a year.....from a bankrupt company.

    We need to start questioning the elites of the Democratic Party in some of their actions that duplicate the Republicans.

    I'm not going anywhere. I'm standing up, which is how one speaks in opposition in a civilized world. - Ainsley Hayes

    by jillian on Sun Nov 18, 2012 at 12:45:02 AM PST

  •  Private Equity Firms (1+ / 0-)
    Recommended by:

    Perhaps its time to consider legislation to force these private equity firms to use their own money in the investments.

    Their fortunes need to be tied to the long term success or failure of these companies. They need to be held accountable, perhaps personally liable for the decisions they make and the companies they loot.  That may be the only way to force the raiders to be constructive instead of destructive.

    Clearly, they would be much more engaged and careful about where they invest and long term potential and viability of their targets.  

  •  14 years in Hostess bankery, Waterloo and Lenexa (3+ / 0-)
    Recommended by:
    la58, lurkyloo, Ender

    I have watched in amazement as the tv and print media fail to list what the company demanded from us. Here is a brief summary. 1) we are a self funded pension. We pay $3+ per hour to our pension. In July of 2011 the company announced it was 'borrowing' that money until they were profitable again and stopped forwarding the money to the pension. They then filed Bankruptcy and this debt to us was waved by the judge. That money will never be recovered. 2) an 8% hourly pay cut in year 1 and a total pay cut of 27% over 5 years. 3)Double the weekly insurance premium. 4) Total withdrawal from the pension. No more retirement to earn, if you ain't got it, you won't get it.

    They received approval to impose their offer from the judge before they ever showed it to the Union. People say we caused this. I say we stood up to a bully. I hope they lost their asses because I have lost mine. Keep in mind they sold $2.5 BILLION last year and their theft from our pension was a mere $50 million. Our pension had nothing to do with their unprofitable history.

  •  Hostess was "harvested". Credit Default Swaps may (0+ / 0-)

    ...also have been a factor. Its clearly obvious that Hostess was "harvested" as Bain Capital's former CEO Mitt Romney would say. The company's assets were handed to management to the detriment of even investors lol, Given that management KNEW they were going to file for bankruptcy I was wondering if KOS or anyone else with financial savvy could research if Hostess took out Credit Default Swaps against this bankruptcy immediately leading up to the event, thanks.

  •  Too Much Ado about Twinkies (0+ / 0-)

    I feel for the workers.  The bosses are jerks to give themselves huge bonuses just before shuttering the plant.

    But at the end of the day, nobody should cry over spilled Twinkies, which are only so much junk!  It's not like a granary or a tomato processing plant went belly up.  Twinkies aren't even food!

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