Pages

Jump to bottom

7 comments

1 Bob Dillon  Sat, Nov 24, 2012 4:03:46pm

It would seem that both sides were so busy feeding off of Hostess that it simply imploded.

2 TedStriker  Sat, Nov 24, 2012 4:29:01pm

re: #1 Bob Dillon

It would seem that both sides were so busy feeding off of Hostess that it simply imploded.

Umm, no.

As much as some people want to pin some blame on the unions for how this all went down, I can't really fault them for calling Hostess management on their BS. In any case, Hostess might have a suitor; read this CNN/Money story, because there's some very instructive parts in it about why Hostess went tits up:

[Link: finance.fortune.cnn.com...]

"I think that we could offer a slightly better, more labor-friendly deal than what was on the table last week," says Sun co-CEO Marc Leder, in an interview with Fortune. "We also think that one point the unions have made is that there hasn't been a great amount of reinvestment in the business. We've found that investing new capital into companies like this can be very positive for brand, people and profitability... We would look to invest in newer, more modern, manufacturing assets that would enable the company to become more productive and to innovate."

Basically, the current vulture capital ownership has been doing a Romney/Bain Capital and has been wringing any profits out of Hostess into their own pockets and putting the company deeper and deeper into debt, while not investing much into facilities and equipment, ensuring that what we are seeing unfold now with the shutdown and attempted liquidation was going to be inevitable.

Sounds to me like the BCTWGM saw the writing on the wall after Hostess management wanted to slash their pay and benefits closer to the bone and said "NO MORE!", even at the probable expense of their own jobs going into winter and the holidays.

Hopefully, Sun Capital can pull off a buyout and get Hostess and its workers back to work soon.

3 Amory Blaine  Sat, Nov 24, 2012 5:01:30pm

Someone should alert the media. Because if you listen to the soundbites, it was all the unions fault after they "failed" to take the deal.

4 Lidane  Sat, Nov 24, 2012 5:15:49pm

Gee, you mean that shitty, incompetent management and a revolving door at the top which saw a half-dozen CEOs in less than a decade would lead to a multi-billion dollar sales juggernaut imploding?

Who could have ever predicted such a thing?

///

5 calochortus  Sat, Nov 24, 2012 5:32:24pm

But try telling any of this to the anti-union folks.

IIRC, the unions did give up some stuff the last time their contracts were up for renewal. Management was just intent on sucking every possible cent out of the business.

6 Bob Dillon  Sat, Nov 24, 2012 6:36:59pm

re: #2 TedStriker

[Link: littlegreenfootballs.com...]

Management was at fault and I posted as such. However with the following union rules someone would have to be crazy to take on and continue with this:

"Uncounted in the above numbers were the outrageous union-imposed rules that made for a too-high-to-bear cost of sales:

No truck could carry both bread and snacks even when going to the same location
Drivers were not permitted to load their own trucks
Workers who loaded bread were not allowed to also load snacks
Bringing products from back rooms to shelves required another set of union employees
Multi-Employer pension obligations made Hostess liable for other, previously bankrupted, retirement plan contributions from employees that never worked for Hostess at all"

7 KingKenrod  Sat, Nov 24, 2012 6:49:25pm

The best article I've read about the long decline of Hostess was written by David A. Kaplan for Fortune magazine - you can read it here. It was published before the final failure of the company to reach an agreement with its unions.

High labor costs were an issue. But so were high commodity costs, too much debt, a growing public distaste for their products, and finally the recession.

Another reason (not mentioned in the article) is that the acquisition spree that Hostess's predecessor IBC went on in the late 1990's never paid off - IBC wound up paying excessive debt service but never modernized to take advantage of the expansion (cutting labor costs and negotiating better contracts would be part of this). This landed IBC in bankruptcy court, only to emerge after 5 years with even more debt.


This page has been archived.
Comments are closed.

Jump to top

Create a Page

This is the LGF Pages posting bookmarklet. To use it, drag this button to your browser's bookmark bar, and title it 'LGF Pages' (or whatever you like). Then browse to a site you want to post, select some text on the page to use for a quote, click the bookmarklet, and the Pages posting window will appear with the title, text, and any embedded video or audio files already filled in, ready to go.

Or... you can just click this button to open the Pages posting window right away.

Last updated: 2016-01-01 10:29 am PST

LGF User's Guide RSS Feeds

Help support Little Green Footballs!

Subscribe now for ad-free access!

Recent Pages
mishuga
Ted Nugent: Jew(ish Politician)s = Nazis
Ted Nugent singled out 12 Jewish-American politicians, complete with a graphic depicting each of the politicians alongside an Israeli flag, for supporting gun control and other crimes. The post, which has been shared more than 4,000 times and liked more ...

15 hours, 24 minutes ago
Views: 131 • Comments: 0 • Rating: 0
Tweets: 0 • Share to Facebook

Shares: 0
Likes: 0
Comments: 0
: 0
I Stand With Planned Parenthood
Why We Need to Think Beyond Roe v. Wade - Pacific Standard
For the immigrant mothers—Dolores Madrigal, the lead plaintiff, and the nine others named in the suit, and countless others whose names we will not know—the story was more complex, the culpable more numerous. First, there were the doctors and ...

21 hours, 21 minutes ago
Views: 178 • Comments: 0 • Rating: 1
Tweets: 1 • Share to Facebook

Shares: 0
Likes: 0
Comments: 0
: 0
I Stand With Planned Parenthood
Are Pets Really Good for Us? - Pacific Standard
We just adopted a dog, meaning I'm now a pet owner, meaning I'm now responsible for another living creature. It's weird. Her name is Bella. She's a pit bull mixed with something that is not a pit bull, and ...

21 hours, 30 minutes ago
Views: 189 • Comments: 0 • Rating: 0
Tweets: 1 • Share to Facebook

Shares: 1
Likes: 0
Comments: 0
: 1
Thanos
Marvel’s Captain America: Civil War - Big Game Spot
Choose your side with the latest preview for Marvel's "Captain America: Civil War," in theaters May 6! ► Subscribe to Marvel: bit.ly Watch more from Marvel's Captain America: Civil War now: bit.ly Follow Marvel on Twitter: ‪twitter.comLike Marvel on ...

2 days, 11 hours ago
Views: 372 • Comments: 3 • Rating: 0
Tweets: 1 • Share to Facebook

Shares: 0
Likes: 0
Comments: 0
: 0
Thanos
DNA Study of First Ancient African Genome Flawed, Researchers Report
True science is often about finding errors, mistakes, and bad data and correcting it. As it turns out, the data produced by the program used to map Mota’s DNA came in a format that had to be tweaked before the ...

2 days, 12 hours ago
Views: 509 • Comments: 0 • Rating: 1
Tweets: 39 • Share to Facebook

Shares: 0
Likes: 0
Comments: 0
: 0
Thanos
The NFL Wants You to Think These Things Are Illegal
The voiceover in the clip says: "This telecast is copyrighted by the NFL for the private use of our audience. Any other use of this telecast or any pictures, descriptions, or accounts of the game without the NFL's consent ...

2 days, 12 hours ago
Views: 662 • Comments: 3 • Rating: 3
Tweets: 93 • Share to Facebook

Shares: 0
Likes: 0
Comments: 0
: 0
Thanos
Future Islands - the Chase
Filmed live at The Music Farm in Charleston, SC on April 14, 2015 by Allen Alcantara on a GoPro Hero4. US Tour Crew:Live Sound: Dan FromeLighting Designer: Phil WeinholtTour Manager: Allen AlcantaraKing of Shirts: Dan GaetaLive drums: Michael Lowry ...

3 days, 14 hours ago
Views: 350 • Comments: 0 • Rating: 0
Tweets: 1 • Share to Facebook

Shares: 0
Likes: 0
Comments: 0
: 0
Thanos
Kimbra - ‘Goldmine’ a Day at Salvation Mountain Ft Nicholas Slick Stewart
My extremely talented friend Slick wanted to film a dance to Goldmine, a song from The Golden Echo that he was particularly inspired by. So on the day of my 25th birthday Kenny took us all to Salvation Mountain ...

4 days, 10 hours ago
Views: 413 • Comments: 0 • Rating: 0
Tweets: 1 • Share to Facebook

Shares: 0
Likes: 0
Comments: 0
: 0
Thanos
Polica - Wedding (Live on the Current)
Polica perform "Wedding" off the album 'United Crushers' live in The Current studio. Listen to the full in-studio session: thecurrent.orgConnect with The Current:thecurrent.orgyoutube.comtwitter.comfacebook.cominstagram.com Become a member:contribute.publicradio.org Current

4 days, 10 hours ago
Views: 394 • Comments: 0 • Rating: 0
Tweets: 1 • Share to Facebook

Shares: 0
Likes: 0
Comments: 0
: 0
Thanos
Tom Winter - Catalyst - Multi-Tracked Acoustic Guitar
An original composition by Tom Winter dedicated to and inspired by the late Michael Hedges. For more of Tom Winter's music, including original music and acoustic video-game arrangements, check out his YouTube channel: youtube.com Follow his Facebook fan page ...

5 days, 9 hours ago
Views: 511 • Comments: 0 • Rating: 0
Tweets: 2 • Share to Facebook

Shares: 0
Likes: 0
Comments: 0
: 0