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(CNN)   Hostess seeks court order to help them force new contract on unions and allow them to stay open, threaten to hang Twinkie the Kid with his own rope if things don't go their way   (money.cnn.com) divider line 55
    More: Interesting, Twinkie the Kid, Wonder Bread, Teamsters, equity stakes, Wake Forest University, classic cars  
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1379 clicks; posted to Business » on 15 Sep 2012 at 5:59 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-09-15 06:04:35 AM
hmmmm

2009: Backed by private equity, the company exits bankruptcy as a private entity and changes its name to Hostess Brands.

2012: Hostess again enters bankruptcy, this time with 19,000 employees and $860 million in debt.

I suspect, that private equity thing and somehow having $860 million on their books, which would be at least partly the fault of the private equity people is the bigger problem here.
 
2012-09-15 07:28:35 AM
So, they're actually accusing the union of destroying them, in much the same way that the unions destroyed Old General Motors? Hmm. Interesting.
 
2012-09-15 07:31:55 AM

WhyteRaven74: hmmmm

2009: Backed by private equity, the company exits bankruptcy as a private entity and changes its name to Hostess Brands.

2012: Hostess again enters bankruptcy, this time with 19,000 employees and $860 million in debt.

I suspect, that private equity thing and somehow having $860 million on their books, which would be at least partly the fault of the private equity people is the bigger problem here.


But the unions!

/We'll march til we drop, the girls and the fellas
//We'll fight to the death or else fold like umbrellas 
///So we'll march day and night by the big Twinkie tower
////They have the plant but we have the power
 
2012-09-15 07:40:35 AM
Wouldn't it be ironic if the private equity company was you know who?
 
2012-09-15 08:08:18 AM

ekdikeo4: So, they're actually accusing the union of destroying them, in much the same way that the unions destroyed Old General Motors? Hmm. Interesting.


In three years?
 
2012-09-15 08:22:39 AM
Are we going back to 1984 and the Steel Industry Union again? WTF big business? This isn't the air traffic controllers union. These people make cake. STOP farkING WITH OUR CAKE!
 
2012-09-15 08:31:35 AM

ekdikeo4: So, they're actually accusing the union of destroying them, in much the same way that the unions destroyed Old General Motors? Hmm. Interesting.


More like what happened to Eastern Airlines in the 1980's. The union is at a point where suicide is preferable to the alternative.
 
2012-09-15 08:34:30 AM
Management should be allowed to fark up as much as they want and push all the consequences onto the employees with no consequences themselves.
 
2012-09-15 08:35:43 AM
I'm sure the executives have taken huge cuts to their compensation packages first before making others lose pay.
 
2012-09-15 08:44:41 AM

oldernell: Wouldn't it be ironic if the private equity company was you know who?


You mean...Hitler?
 
ZAZ [TotalFark]
2012-09-15 08:57:06 AM
The last time we had a thread on this bankruptcy the company was worth more to the unions dead than alive.

The comment about debt and private investors reminds me of the Friendly's bankruptcy. The investor sought to take all the worth out of the company while leaving an empty shell with a huge pension obligation. Bankruptcy would erase the pension debt.

Even if it does end up in liquidation, analysts say that some of its most iconic brand names -- Twinkies, Ding Dongs and Wonder Bread, to name a few -- will likely live on, getting scooped up at auction and attached to products from other companies.

Maybe the new owner will turn Wonder Bread into bread.
 
2012-09-15 08:58:28 AM

ZAZ: Maybe the new owner will turn Wonder Bread into bread.


Bad move; sales would plummet.
 
2012-09-15 09:17:59 AM
Dear Hostess:

Welcome to a Free Market and Small Government. Now go die.
 
2012-09-15 09:46:26 AM
Hostess Brands, the maker of Twinkies and Wonder Bread, said Friday that it would seek a court order to force a new contract on one of its unions and stave off its demise.

Fark em. Let them start their own brand under a new name and compete with everyone else. They can pay themselves what they want with whatever benefits they think they deserve.
 
2012-09-15 09:52:48 AM
Isn't a contract an agreement codified in writing by the signatories? How is it called a contract if one of the groups doesn't agree? If a business can get the gummint to force one or more groups to accept a contract, and businesses are people, can I get the gummint to force Olivia Wilde to follow the terms of a contract to make me a sammich and give me a lap dance?
 
ZAZ [TotalFark]
2012-09-15 10:02:47 AM
mofa

Bankruptcy is special. The court can relieve one party of its contractual obligations. Suppose you hire Ms. Wilde for a billion dollars to give you that lap dance. You don't have the money. The bankruptcy judge decides how much you still have to pay her and how many times she has to grind against you.

When you do business with a potentially insolvent company you should demand payment in advance. Cash on delivery is generally safe. Bankruptcy courts deal with debt, future obligations, and past "preferential payments" where one overdue account is paid off and another is not.
 
2012-09-15 10:03:02 AM
Fine, Hostess. Tell ya what. Cut Drakes Cakes loose so they can go national, then go DIAF. Deal?
 
2012-09-15 10:11:28 AM
No more twinkies or wonderbread? No loss

Even if it does end up in liquidation, analysts say that some of its most iconic brand names --Twinkies, Ding Dongs and Wonder Bread, to name a few -- will likely live on, getting scooped up at auction and attached to products from other companies.

The worst of all outcomes
 
2012-09-15 10:11:44 AM

oldernell: Wouldn't it be ironic if the private equity company was you know who?


Ripplewood Holdings
 
2012-09-15 10:12:29 AM
How much are they saving by restructuring these contracts? $10M maybe? How much is their CEO and their Board of Directors paid?
 
2012-09-15 10:28:43 AM

GAT_00: How much are they saving by restructuring these contracts? $10M maybe? How much is their CEO and their Board of Directors paid?


I think the even better question is how much debt did the Vulture Capitalists saddle them with to cause this mess?

It sounds like they're $860 million in the hole. That just doesn't happen overnight -- unless a private equity firm borrowed against them to pay themselves.
 
2012-09-15 10:29:51 AM
So why haven't unions started to understand they need to protests bad management?
 
2012-09-15 10:29:51 AM

Dog Welder: GAT_00: How much are they saving by restructuring these contracts? $10M maybe? How much is their CEO and their Board of Directors paid?

I think the even better question is how much debt did the Vulture Capitalists saddle them with to cause this mess?

It sounds like they're $860 million in the hole. That just doesn't happen overnight -- unless a private equity firm borrowed against them to pay themselves.


Yeah, but that could be addressed by cutting costs elsewhere. I'm just saying that if they need to cut down some salaries, how much are they wasting on a CEO and Board who clearly aren't leading them anywhere good?
 
2012-09-15 10:50:03 AM

GAT_00: Dog Welder: GAT_00: How much are they saving by restructuring these contracts? $10M maybe? How much is their CEO and their Board of Directors paid?

I think the even better question is how much debt did the Vulture Capitalists saddle them with to cause this mess?

It sounds like they're $860 million in the hole. That just doesn't happen overnight -- unless a private equity firm borrowed against them to pay themselves.

Yeah, but that could be addressed by cutting costs elsewhere. I'm just saying that if they need to cut down some salaries, how much are they wasting on a CEO and Board who clearly aren't leading them anywhere good?


I would hope their BoD is taking a cut, but I don't think it's going to make up that much debt.

When you saddle a company with that much debt for the sole purpose of paying yourself, you really limit the company's ability to either expand, take care of its employees, or weather the storm of tougher economic times.

While I realize all private equity firms are not using these types of tactics to enrich themselves, and this is certainly legal, it's slimy. It's the problem I've had with guys like Romney and his Bain Capital flunkies for years. It's all short-term gain for the guy at the top and fark everybody else.
 
2012-09-15 10:54:30 AM

Dog Welder: I would hope their BoD is taking a cut


HAHAHAHAHAHAHAHAHAHA

Probably not. They would have ordered the union cuts after all.
 
2012-09-15 11:07:35 AM

GAT_00: How much are they saving by restructuring these contracts? $10M maybe? How much is their CEO and their Board of Directors paid?


I know you like to rail against the corporate elite, but executive compensation is always a much smaller line item than overall wages.

In this case there is an issue because the CEO restructured his pay immediately before announcing some bad results and there has been an effort (or at least discussion) to clawback his bonus.
 
2012-09-15 11:18:10 AM
The company's execs are just playing chicken with their employees' lives. The union should call their bluff. Companies wouldn't be able to get away with these shenanigans if unions had better membership and were more powerful.

Same song and dance every time: "I farked up the company! If we all want to keep getting paid, you guys all need to take a pay cut and lose benefits."
 
2012-09-15 11:20:14 AM

You're the jerk... jerk: In this case there is an issue because the CEO restructured his pay immediately before announcing some bad results and there has been an effort (or at least discussion) to clawback his bonus.


Oh come on, he must have known how bad things were before he restructured and that's why he did it - so his pay couldn't easily be cut.
 
2012-09-15 11:30:55 AM

oldernell: Wouldn't it be ironic if the private equity company was you know who?


Not ironic at all, but that was the first thing that popped into my mind...
 
2012-09-15 12:18:58 PM

stiletto_the_wise: The company's execs are just playing chicken with their employees' lives. The union should call their bluff. Companies wouldn't be able to get away with these shenanigans if unions had better membership and were more powerful.

Same song and dance every time: "I farked up the company! If we all want to keep getting paid, you guys all need to take a pay cut and lose benefits."


But union power should include compulsory inclusion into the Union.
 
2012-09-15 12:36:39 PM

Girion47: stiletto_the_wise: The company's execs are just playing chicken with their employees' lives. The union should call their bluff. Companies wouldn't be able to get away with these shenanigans if unions had better membership and were more powerful.

Same song and dance every time: "I farked up the company! If we all want to keep getting paid, you guys all need to take a pay cut and lose benefits."

But union power should include compulsory inclusion into the Union.


That was supposed to read "shouldn't"
 
2012-09-15 01:22:35 PM

Girion47: But union power should include compulsory inclusion into the Union.

Girion47: That was supposed to read "shouldn't"


Free riders are never a good thing. Either union membership has to be compulsory, or people in the union don't receive the union payscale and benefits.

It's the same thing as hospitals being required to provide medical services regardless of the ability to pay. The free riders are inflating the price for the paying patients. Either you get everyone insurance or you remove the requirement everyone be treated. You can't have it both ways without problems.
 
2012-09-15 01:25:33 PM

Sergeant Grumbles: Girion47: But union power should include compulsory inclusion into the Union.
Girion47: That was supposed to read "shouldn't"

Free riders are never a good thing. Either union membership has to be compulsory, or people in the union don't receive the union payscale and benefits.

It's the same thing as hospitals being required to provide medical services regardless of the ability to pay. The free riders are inflating the price for the paying patients. Either you get everyone insurance or you remove the requirement everyone be treated. You can't have it both ways without problems.


But being forced to contribute your wages towards an organization which you don't support or operates contrary to your ethics should be reserved to the government.
 
2012-09-15 01:26:13 PM

Sergeant Grumbles: Girion47: But union power should include compulsory inclusion into the Union.
Girion47: That was supposed to read "shouldn't"

Free riders are never a good thing. Either union membership has to be compulsory, or people in the union don't receive the union payscale and benefits.

It's the same thing as hospitals being required to provide medical services regardless of the ability to pay. The free riders are inflating the price for the paying patients. Either you get everyone insurance or you remove the requirement everyone be treated. You can't have it both ways without problems.


I also don't like the idea that you can be harassed if you vote against a union joining in your company. The voting should be kept anonymous otherwise intimidation will occur, and that's unacceptable.
 
2012-09-15 01:32:53 PM
The good news is that they'll see a temporary spike in revenue as I stockpile a ten-year hoard of Twinkies.

None of those damn snowballs, though. I can't stand coconut. Not the flavor- the consistency.
 
2012-09-15 01:33:59 PM
if i was the head of the baker's union i would only agree to the deal if all the execs got paid no more than the average wage of a non exec employee, that surely would save the company even more.
 
2012-09-15 01:43:49 PM

Girion47: I also don't like the idea that you can be harassed if you vote against a union joining in your company. The voting should be kept anonymous otherwise intimidation will occur, and that's unacceptable.


I agree. As long as unions remain democratic in nature, I don't believe that your Boobies is a problem. You contribute your wages, but you get a vote like everyone else.
And unlike healthcare, there's nothing ethically wrong with exempting non-union employees from the union payscale and benefits. It eliminates free riders. If the union is ineffectual, no one will want to join it. If it provides good benefits, people will want to join.

I do have to ask though, can you give me an example of a union that operates contrary to your ethics? To my ears, it sounds like unions are forcing religion on people or something. Or does it mean that unions as a whole are largely Democratic voters?
"Unions are lazy commies because Republicans say so." isn't really a reason based on reality, but it seems that flavor of idea is the main reason behind anti-union workers.
 
2012-09-15 02:46:10 PM

oldernell: Wouldn't it be ironic if the private equity company was you know who?


I wouldn't put it past him, the bastard!

i105.photobucket.com
 
2012-09-15 02:54:08 PM

tillerman35: The good news is that they'll see a temporary spike in revenue as I stockpile a ten-year hoard of Twinkies.

None of those damn snowballs, though. I can't stand coconut. Not the flavor- the consistency.


Tallahassee is that you?
 
2012-09-15 04:02:00 PM
Do any of you do any grocery shopping? Twinkies and Hostess Cupcakes cost over $4 per box. Little Debbie costs less than half that. Sadly, the quality of Hostess products is much higher than Little Debbie...but most kids couldn't care less about the actual quality of a Little Debbie cupcake vs. Hostess.

Unless Hostess can be more competitive with Little Debbie and other 'cheap' brands, they will not make it out of constant bankruptcy. I am not sure if that all lies with their union pay/benefits or something else. Maybe both ends of this deal are greedy.
 
2012-09-15 05:10:14 PM

WhyteRaven74: hmmmm

2009: Backed by private equity, the company exits bankruptcy as a private entity and changes its name to Hostess Brands.

2012: Hostess again enters bankruptcy, this time with 19,000 employees and $860 million in debt.

I suspect, that private equity thing and somehow having $860 million on their books, which would be at least partly the fault of the private equity people is the bigger problem here.


Don't forget the two deals the unions already agreed to, or the fact that the unions actively worked with Hostess to help it emerge from bankruptcy the first time.

Hostess can suck it. It's time to stick a friggin' fork in Twinkie the Kid, for no reason other than the simple fact that those assholes first changed the recipe to, and then discontinued, their only reason for existence - the Suzy-Q.
 
2012-09-15 05:12:48 PM

k1j2b3: Do any of you do any grocery shopping? Twinkies and Hostess Cupcakes cost over $4 per box. Little Debbie costs less than half that. Sadly, the quality of Hostess products is much higher than Little Debbie...but most kids couldn't care less about the actual quality of a Little Debbie cupcake vs. Hostess.

Unless Hostess can be more competitive with Little Debbie and other 'cheap' brands, they will not make it out of constant bankruptcy. I am not sure if that all lies with their union pay/benefits or something else. Maybe both ends of this deal are greedy.


Have you tried to actually eat some of what Hostess has made over the last four years or so? It's not that much better than Little Debbie, but they want double (or more) the price for their product, hoping to coast on the "Hostess" IP.

They trashed quite a bit of their overall product lines, and seriously drove the quality of what remained into the ground with cheaper ingredients, recipe changes, and size reductions per portion.

Again, fark Hostess.
 
2012-09-15 05:16:07 PM

FormlessOne: Have you tried to actually eat some of what Hostess has made over the last four years or so? It's not that much better than Little Debbie, but they want double (or more) the price for their product, hoping to coast on the "Hostess" IP.They trashed quite a bit of their overall product lines, and seriously drove the quality of what remained into the ground with cheaper ingredients, recipe changes, and size reductions per portion.Again, fark Hostess.


So what you're saying is, they're just Dong Dongs
 
2012-09-15 05:25:11 PM

Girion47: But being forced to contribute your wages towards an organization which you don't support or operates contrary to your ethics should be reserved to the government.


Nobody is forcing you to take a union job. Be a good Republican and start your own business if you don't like it.
 
2012-09-15 05:47:57 PM

12349876: Nobody is forcing you to take a union job. Be a good Republican and start your own business if you don't like it.


Heh, this is the same argument the Repubs use when Mississipi allows employers to forbid birth control in their insurance plans. I think it's a load of bullshiat because it assumed workers have absolute freedom to choose an employer, but I never fail to note the hypocrisy.
 
2012-09-15 06:26:25 PM

ZAZ: mofa

Bankruptcy is special. The court can relieve one party of its contractual obligations. Suppose you hire Ms. Wilde for a billion dollars to give you that lap dance. You don't have the money. The bankruptcy judge decides how much you still have to pay her and how many times she has to grind against you.


I've decided that I'm talking about a contract wherein Ms Wilde was to pay ME to receive a lap dance. I can offer to reduce my fee to $500M, the lapdance and half of a meatball sub because of Hostess' bankruptcy. See, she made this agreement with my girlfriend, Morgan Fairchild ...
 
2012-09-15 06:52:06 PM

Another Government Employee: ekdikeo4: So, they're actually accusing the union of destroying them, in much the same way that the unions destroyed Old General Motors? Hmm. Interesting.

More like what happened to Eastern Airlines in the 1980's. The union is at a point where suicide is preferable to the alternative.


Jobs?
 
2012-09-15 06:59:48 PM

stiletto_the_wise: The company's execs are just playing chicken with their employees' lives. The union should call their bluff."


Yeah.

i47.tinypic.com
 
ZAZ [TotalFark]
2012-09-15 07:05:00 PM
jjorsett

The dispute includes pensions. Hostess wants unions to take a pension cut. Large company pensions are federally insured. The union could be better off killing its employer and having taxpayers fund the pension. Having to find a new job once could be better than losing 40% of your pension forever.

Suppose you buy a company worth $1.1 billion but with $1 billion future pension liability cancelling out most of that worth. You have it invest $1 billion in your other ventures. That investment can be made to lose value. Declare bankruptcy. Taxpayers pick up the $1 billion pension liability. You keep the $1 billion investment in your own enterprise. Net effect, you walked away with $1 billion in taxpayer money.

Something like this is alleged in the Friendly's bankruptcy. It was blatant enough that the federal government wants to recoup losses, but not so blatant that the federal government has to put rich people in jail.
 
ZAZ [TotalFark]
2012-09-15 07:07:04 PM
After further investigation it can't be exactly as I wrote because the federal pension guarantee is limited, not necessarily 100% of agreed value. But there is a pension dispute involved and the value of the corporate brand could be greater than the value of the company as a going concern.
 
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