Slog Comments


Comments (26) RSS

Oldest First Unregistered On Registered On Add a comment
Dr_Awesome 1
So pissed at this. Anyone comes after my Union pension and there will be hell to pay. I earned that goddamn money, just like the Hostess workers earned theirs.

What happens to their pension account now, Goldy? Is it to be paid out to them after the sell-off?
Posted by Dr_Awesome on November 16, 2012 at 12:21 PM · Report this
Gern Blanston 2
Hopefully a more fiscally responsible company will buy the rights to the brands and keep them going. I don't want to live in a world without Twinkies and Ding Dongs.
Posted by Gern Blanston on November 16, 2012 at 12:34 PM · Report this
Will in Seattle 3
Especially to simple rubes who listen to Komrade Rush and Komrade Rmoney.
Posted by Will in Seattle on November 16, 2012 at 12:34 PM · Report this
Gus 5
If you cannot afford to pay people a living wage to do a job, then either the job isn't worth being done, or you have completely screwed up.

Obviously, the world needs Twinkies, so the owners have completely screwed up.
Posted by Gus on November 16, 2012 at 12:48 PM · Report this
Seeing as there are no shortages of similar snack foods, Little Debby et al, it begs the question 'how could Hostess lose so much market share?'

Sounds like (without being in on the specifics) a classic Equity Firm Pump and Dump.
Posted by Chris Jury on November 16, 2012 at 12:57 PM · Report this
ballard dude 7
Just overheard that windbag dori monson spouting what i'm sure will be the seattle times 'blame the union' b.s. ...
Posted by ballard dude on November 16, 2012 at 12:58 PM · Report this
Rujax! 8
Some pension funds are Federally we get to bail out the vulture capitalist assholes...

Posted by Rujax! on November 16, 2012 at 12:59 PM · Report this
This is complete bullshit. The company, brand and product have been completely trampled over the last 20 years. There is a strike, yes, and the strike will result in higher costs, but to say that the end of Twinkies is because of the strike is silly. Twinkies are ending because times have changed.
Posted by tshicks on November 16, 2012 at 1:15 PM · Report this
keshmeshi 10

Mother's cookies went out of business suddenly several years ago. Keebler bought the rights to the brand, and the brand's most popular cookies started appearing on store shelves within a year.

Hostess' less popular products are finished, but I'm sure someone will buy the rights to the most popular items. Anyone who can't make money selling fat and sugar to the American public is a fool.
Posted by keshmeshi on November 16, 2012 at 1:29 PM · Report this
Will in Seattle 11
Sadly @8 has a point.

Basically, the CEO and execs looted Blue state funds to do this.
Posted by Will in Seattle on November 16, 2012 at 1:39 PM · Report this
Sad for the people who lost their jobs, but maybe there shouldn't be enormous corporations feeding Americans processed shit food.
Posted by Keenan C on November 16, 2012 at 1:52 PM · Report this
Supreme Ruler Of The Universe 13

Why hasn't the health food revolution hit Twinkies?

Shouldn't there be a ground vegetable version featuring lite-unhomogenized white stuff in the center?
Posted by Supreme Ruler Of The Universe http://_ on November 16, 2012 at 1:52 PM · Report this
Get over it. Everyone is to blame.
Posted by AsherCapHill on November 16, 2012 at 1:53 PM · Report this
Blaming it on management is an equally simple (and stupid) message to sell. The problem - over and over and over again - is that basic necessities like health coverage (even with the ACA), retirement coverage, and a basic floor for wages, are tied to employers and not publicly available to all.

Posted by Nothankyou on November 16, 2012 at 1:57 PM · Report this
Cornichon 16
I would like to think that Hostess was driven into bankruptcy by its own shitty products. What host and hostess worth their salt would serve their guests plastic food?
Posted by Cornichon on November 16, 2012 at 2:11 PM · Report this
Let's assume that you are entirely correct and Hostess suffered from egregiously incompetent management. So you find yourself working for egregiously incompetent management that is ruining the company you work for. What are your options? Some that come to mind are...

1. Find a new job.
2. Negotiate for new, competent management.
3. Take a pay cut to compensate for management's failures.

One that doesn't come to mind is "demand continuation of the pay and benefits you got when the company was profitable under competent management".

By the way, @8 and @11, the pension benefit gratuity corporation, the quasi-governmental agency that insures pensions, is funded by premiums paid by the companies whose pensions it insures. It's true that it is backstopped by the federal government because of many recent corporate bankruptcies it will eventually require a taxpayer bailout, but unless you think the Hostess execs caused the great recession, you can't hold them responsible for that.
Posted by David Wright on November 16, 2012 at 3:24 PM · Report this
keshmeshi 20

They already had taken pay and benefit cuts. For whatever reason, they decided to face unemployment than suffer an 8 percent pay cut and 17 percent benefits cut.

If my employer were expecting that from me, I would quit too. It's not my responsibility to save my employer from itself, and my leaving rather than agree to be paid less than I'm worth doesn't make *me* responsible for the company's downfall. That's still management's fault.
Posted by keshmeshi on November 16, 2012 at 3:40 PM · Report this
cracked 21
What a waste of a once dominant brand name. When was the last time they tried to move a new line of treats? How stupid can you be?

I still perk up when I hear the words "Hostess cupcakes" or "Hostess snowball", but I know I can't eat that shit. I can't believe that someone interested in building the business forward couldn't have used routine modern product development techniques to advance the brand. The craving for and consumption of treats has continued unabated, but the increasing trend toward the public wanting healthier food has been clear as NOT just a passing fad since the 80s.

I'm with @6. Sounds like they drove it under trying to extract maximum cash at all times instead of grow advance business.
Posted by cracked on November 16, 2012 at 5:13 PM · Report this
Free Lunch 22
I will miss that delicious Hostess smell when biking along Dexter.

Here's a fascinating article from Fortune about the demise of Hostess from back in July. It sounds like even if the unions had agreed to all terms, it would in no way make up losses: $341 million in fiscal 2011 alone.

Employees would have to concede $18,400/year EACH to cover 2011 losses, and 2012 was looking to be much worse.

Hard to blame this just on the unions. I'm sure it won't stop a thoroughly discredited paper like the Seattle Times, though.
Posted by Free Lunch on November 16, 2012 at 7:00 PM · Report this
Fnarf 23
The real problem with Hostess is that they have a 1960s business in a 2010s world. And Bimbo is eating their Twinkies in the flourescent snack cake market.
Posted by Fnarf on November 16, 2012 at 7:12 PM · Report this
biffp 24
It's the 2010s hedge fund financial model that is the real problem.
Posted by biffp on November 16, 2012 at 7:15 PM · Report this
Cascadian Bacon 25
Has goldstein ever been an actual worker?

And no, whining isn't a job.
Posted by Cascadian Bacon on November 16, 2012 at 7:55 PM · Report this
seandr 26
Americans are to blame for not eating twinkies.
Posted by seandr on November 16, 2012 at 8:09 PM · Report this
The people who produce the profit and know the company best - the workers, should be the ones who democratically select top management. Our entire corporate shareholder model begs for this kind of idiocy.
Posted by Tent_Liberation_Army on November 16, 2012 at 10:18 PM · Report this
Whether you blame management or the union, it's Democrats at fault. This is a blue on blue fiasco. The evil management company is a big Democratic donor linked to all kinds of Democratic politicians. Looks like both sides are getting what they deserve.

If it wasn't for the loss of those tasty Hostess fruit pies, this would be a top ten most apropos moment.…
Posted by delbert on November 17, 2012 at 6:56 AM · Report this
I am so fucking sick and tired of hearing the incessant "it was the unions' fault!" coming from the frothing mouths of the right-wing troglodytes on this issue. If the unions were guilty of anything, it was engaging in the mistaken belief that they were dealing with a management team that was actually interested in saving Hostess from insolvency, which the pattern of recent events shows was clearly not the case.

Hostess has been bleeding out for more than a decade, losing market share to other regional-turned-national brands, engaging in a serious of ill-advised acquisitions, mounting up astronomical debt, and basically being mismanaged at its highest levels. No company in good straights burns through six CEO's in eight years or ends up with a debt burden equal to roughly 40% of its annual earnings. And while one could argue that labor costs factor into that, the fact is, Hostess workers already agreed to major concessions in their 2004 contract, which resulted in a savings of over $100 mm, but which, primarily because of debt-servicing, was never re-invested back into the company. As a result of all this slip-shod management, Hostess was forced to declare bankruptcy for a second time in January. Subsequently when contract negotiations began with the Teamsters and Bakers, workers were once again - not even asked, but threatened - with additional wage cuts, increases in employee contributions to health benefits, and a de-facto gutting of their pension plan, otherwise the company would have no choice but to close its doors.

But anyone who was paying attention would have seen the writing was on the proverbial wall for Hostess when in late March they hired Gregory Rayburn as their "Chief of Restructuring", who, less than nine days after being hired, took over the CEO position when the company's then-current Chief Brian Driscoll suddenly resigned, with no warning or explanation.

So, all of a sudden you've got a guy who's entire career has been spent engaging in a series of Bain-style asset acquisition-and-liquidation schemes, heading a company carrying nearly $1 B in debt, running a board comprised almost exclusively of representatives from private equity firms, and engaged in an acrimonious contract negotiation with its two largest unions. And nobody thought this smelled fishier than an Alaskan crabber in a heat-wave? Really?

Rayburn was brought on-board at Hostess to serve one purpose: to prep the company for closure and liquidation of its assets; that's what he DOES, and has done for nearly two decades. Anyone believing anything else was seriously deluding themselves. The problem was: a company undergoing reorganization can't just up and call it quits without permission from the Federal Bankruptcy Court, and Rayburn undoubtedly knew he'd need more than just the set of current circumstances to convince them. What he needed was something along the lines of, oh, say, how about a work stoppage? That would provide him with the proverbial "straw that broke the camel's back", and allow him to close shop, then sell off the only assets of any real value, namely the Hostess brand name and product line. So, all he needed to do was make an offer to the unions that at least one of them would refuse, which turned out to be an 8% pay-cut (on top of the concessions the unions had already made in 2004), flat-out halting contributions to their contract-mandated pension funds, additional plant closures (on top of the 21 they'd already shut down in the previous decade), and "sweetening" the deal by promising to restore the wage reductions over the 3-year term of the contract. In response, the Teamsters agreed to take the offer, as crappy as it was, but the Bakers took the bait, rejected the contract and walked out. And that was all the excuse Rayburn needed.

The result of all this is that 18,000 workers are losing their jobs, while Rayburn & his cronies will cut off the handful of salable assets, in the same manner as an ivory poacher takes only the valuable tusks, and leave the remainder of the carcass to bloat and rot in the sun, where it will be picked over by lower-order vultures and hyenas until there's nothing left but bones. They will of course, walk away with handsome "golden parachutes" for their efforts, while the workers will be left with nothing, not even the spoiling meat to perhaps sustain themselves with until something more promising comes along.

But yeah, this as all the unions' fault...
Posted by COMTE on November 17, 2012 at 1:34 PM · Report this

Add a comment

Commenting on this item is available only to registered commenters.