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(Think Progress)   Hostess: Damn those union thugs for making us go bankrupt. It had to be the unions and not at all us giving our CEO a giant-as-fark raise when we had no money. Yep, that's gotta be it   (thinkprogress.org) divider line 159
    More: Asinine, CEO, Hostess Brands, bankruptcy  
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4603 clicks; posted to Business » on 16 Nov 2012 at 7:26 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-11-16 07:13:27 PM
From looking at the past, I've found that things like this happens when you have unreasonable douches on both sides.
 
2012-11-16 07:17:31 PM
It's the Bain plan, your debtors can't go after what you've paid out in salaries so you bleed the company coffers into your upper management and throw the blame on someone else.
 
2012-11-16 07:18:50 PM
They also blamed the strike for closing three plants that they'd already said were going to be closed long before the strike

/Corporations are people
//really, really, f*cked people
 
2012-11-16 07:24:43 PM
NPR had a nice little take on this. Something like 'Why didn't Hostess embrace their unhealthy foods? Make it counter culture to eat a twinkie? Why not make twinkie vodka or some such? It seemed like they didn't care and were willing to fade away.

And then look for a scapegoat when the time came. Oh look, Obama reelected, and now strikes. Oh and obamacare. Perfect.

BCTGM members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.

This doesn't help, either.
 
2012-11-16 07:24:48 PM
That's what all this shiat has been about. CEOs only care about Obamacare and unions if they think it presents a threat to THEIR COMPENSATION.

They are more than willing to shiatcan their company, take boatloads of money out and fark over everyone else in the company.
 
2012-11-16 07:24:54 PM

ShawnDoc: From looking at the past, I've found that things like this happens when you have unreasonable douches on both sides.


Yah, woman interviewed on CBS earlier claimed she was a "twinkie straightener" and when asked why she wouldn't take a pay cut claimed, "well, then, I might as well go back to minimum wage!"
 
2012-11-16 07:29:45 PM
Buying up a company that produces the same stuff, but with a different organizational structure, may not have been a good idea. I mean if you make Wonder Bread in your own bakeries why buy the company that makes Butternut bread in independent bakeries? Oh what's that, merging the two profit centers, which are the sweet stuff, will somehow lead to increased profits greater than the sum of the existing profits? Didn't really work out that way. Surprise.
 
2012-11-16 07:33:58 PM

ShawnDoc: From looking at the past, I've found that things like this happens when you have unreasonable douches on both sides.


No. When you have a group of people who willingly and maliciously fark over everyone else, and then that larger group of people take offensive to it and refuse to pay for the mistakes of the first group...that is not having unreasonable douches on both sides. What we have here is a group of vulture assholes who farked over an entire company and tried to blame it on the working Joes at that company. The influences each side had on the future of the company are not equal.
 
2012-11-16 07:36:37 PM

Nadie_AZ: And then look for a scapegoat when the time came. Oh look, Obama reelected, and now strikes. Oh and obamacare. Perfect.


Yup. They have been in bankruptcy proceedings since January, and had suffered a significant slump in sales.

NPR also noted that Hostess noted that consumers were wanting healthier food, which was a big reason for the drop in sales, which of course means Obama gets blamed (seriously, I'm already seeing the derp on FB that this is Michelle Obama's plan to put Americans out of work by getting people to eat vegetables).
 
2012-11-16 07:38:37 PM
Is anyone surprised?
And is anyone further surprised when the free market asstards roll into to blame the unions for refusing a deal that sees their wages slashed and benefits cut to award a 300% raise to their boss?
 
2012-11-16 07:45:16 PM
I know liberals aren't great at math, but come on. The CEO got an extra $1.8M/year. Hostess had 18,500 employees. So this increase could have been redistributed to all employees, giving each of them $100.

The labor negotiations were over tens of thousands of dollars per employees, or hundreds of millions of dollars overall. Is it OK to get pissed that their CEO got a raise when the company was going under? Absolutely. But as fun as it is to get pissed about CEO pay, any suggestion that his bonus sank the company is mathematically ridiculous.
 
2012-11-16 07:46:06 PM

Silverstaff: (seriously, I'm already seeing the derp on FB that this is Michelle Obama's plan to put Americans out of work by getting people to eat vegetables).


i'd pretend to be surprised, but I can't be bothered.
 
2012-11-16 07:46:11 PM
The CEO pay wasn't going to save the company. It was an asshole move, but hardly responsible for the downfall. The article even said as much:

Certainly, the company agreed to an out-sized pension debt, but the decision to pay executives more while scorning employee contracts during a bankruptcy reflects a lack of good managerial judgement. Click on the links in that paragraph (especially the second one) and you'll get an outline of how farked that company really was.
 
2012-11-16 07:49:13 PM
Maybe people are tired of eating those little turds of sugar and chemicals.
 
2012-11-16 07:49:49 PM
Failing as a business and failing to run a business are two totally different things. We've tons of examples of businesses which have succeeded in the worst of times thanks to intellect and ingenuity.

The whiners complaining right now just can't stand their sour grapes. That's it! It's the only reason. Look, if you couldn't pass Business 101, that's your problem, see? It's time for you to admit you failed.
 
2012-11-16 07:51:19 PM

oren0: So this increase could have been redistributed to all employees, giving each of them $100.


That's not even a dent in the bucket each employee pays the Union over the course of a year.
 
2012-11-16 07:56:07 PM

oren0: The labor negotiations were over tens of thousands of dollars per employees, or hundreds of millions of dollars overall. Is it OK to get pissed that their CEO got a raise when the company was going under? Absolutely. But as fun as it is to get pissed about CEO pay, any suggestion that his bonus sank the company is mathematically ridiculous.


It's more than just math. Having management that actually shared the burdens of a tight budget with its workers could have done a lot to save the company. Having management that rewards itself every time it gets a concession from the workers, and eventually the workers will take their ball, their labor, and go home. Why should they sacrifice so their boss can have a raise?
 
2012-11-16 07:57:42 PM
So we've got an exploded oil rig, turmoil in Jordan, escalating conflict in Israel, a big election coming up in Sierra Leone, and the eyes of America are focused on a snack cake company which may not be able to sell it's assets, resulting in one less cream filled treat on the market.

Got it.
 
2012-11-16 07:58:38 PM
Fark unions and fark the sheep that belong to them. That doesn't mean I agree with management, I just think union members deserve this kind of crap for blindly following their union bosses.
 
2012-11-16 07:59:51 PM
Take a look at their bankruptcy filing. They're a little over 1 billion in debt, and 97% of that debt is to their pension (which works out to a ~$50K per employee benefit). So not only are they raiding the hell out of the company to pay their executives more, they've really just been running the whole company off the employee pensions.

farkers.
 
2012-11-16 08:00:24 PM

Sergeant Grumbles: It's more than just math. Having management that actually shared the burdens of a tight budget with its workers could have done a lot to save the company. Having management that rewards itself every time it gets a concession from the workers, and eventually the workers will take their ball, their labor, and go home. Why should they sacrifice so their boss can have a raise?


For reals. This is bad management. Now they're bankrupt. I wonder why?
 
2012-11-16 08:04:48 PM

OregonVet: oren0: So this increase could have been redistributed to all employees, giving each of them $100.


Symbols matter.

That's not even a dent in the bucket each employee pays the Union over the course of a year.


It's hard to persuade thousands of employees who make working class salaries to accept a cut to their quality of living while at the same time you're doubling the salaries of people at the top.

Maybe the unions would have been more willing to accept wage cuts if the people at the top were seen making their own personal sacrificies.

Let's be honest, the people in charge of Hostess have zero interest in saving the company and are using Unions as a convenient cover as they get everything they want.
 
2012-11-16 08:07:56 PM
As has been said in other threads, when the farking Teamsters accept a larger pay cut and tell your union to stand down, the company really is broke and you should probably take their advice.
 
2012-11-16 08:11:31 PM

"Hostess, Mr. Cromwell, Hostess has 33 different vice presidents each earning over 200 thousand dollars a year. Now, I have spent the last two months analyzing what all these guys do, and I still can't figure it out. One thing I do know is that our snack company lost 110 million dollars last year, and I'll bet that half of that was spent in all the paperwork going back and forth between all these vice presidents. The new law of evolution in corporate America seems to be survival of the unfittest. Well, in my book you either do it right or you get eliminated. In the last seven deals that I've been involved with, there were 2.5 million stockholders who have made a pretax profit of 12 billion dollars.



Thank you. I am not a destroyer of companies. I am a liberator of them! The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Hostess, but that other malfunctioning corporation called the USA. Thank you very "


frankmengarelli.files.wordpress.com

 
2012-11-16 08:13:27 PM
a0.twimg.com

"I'm not saying it was unions, but . . ."

/Seriously, I don't think it was unions.
 
2012-11-16 08:22:38 PM
The correct answer is "All of the Above"

#1 Failing to learn from the first bankruptcy. You can be excused from falling in a hole once, but if you keep falling in, the problem may not be the hole.

#2 Buying a bunch of regional snack food companies to take over their regions but not taking in account all their debt, responsibility to their union contracts and retirement obligations.

#3 Giving the CEO and other raises and bonuses as the ship is sinking.

#4 And the most damning of all, not keeping the product on the shelf. When I did pull-up, I would go weeks and even months with up to a dozen items missing from the shelves I stocked. You have to have income coming in to be able to spend money on your CEO or buying other companies.
 
2012-11-16 08:27:15 PM

Lsherm: The CEO pay wasn't going to save the company. It was an asshole move, but hardly responsible for the downfall. The article even said as much:

Certainly, the company agreed to an out-sized pension debt, but the decision to pay executives more while scorning employee contracts during a bankruptcy reflects a lack of good managerial judgement. Click on the links in that paragraph (especially the second one) and you'll get an outline of how farked that company really was.


Yeah, it was more like the CEO's failure to fully fund the pensions, not the actual pay of the CEO.
 
2012-11-16 08:30:27 PM
Amazing.... truly amazing
 
2012-11-16 08:32:53 PM
It really isn't uncommon to increase the compensation of an executive during a bankruptcy. It might not make sense, but if you want to retain the executive (or bring someone in), you need to pay them. Additionally, the executive may have lost options and other equity comps.
 
2012-11-16 08:35:28 PM

oren0: I know liberals aren't great at math, but come on. The CEO got an extra $1.8M/year. Hostess had 18,500 employees. So this increase could have been redistributed to all employees, giving each of them $100.


So in other words, you didn't RTFA and you're fine with a CEO getting a million dollars for running a company into the ground.
 
2012-11-16 08:36:50 PM

WhyteRaven74: I mean if you make Wonder Bread in your own bakeries why buy the company that makes Butternut bread in independent bakeries? Oh what's that, merging the two profit centers, which are the sweet stuff, will somehow lead to increased profits greater than the sum of the existing profits? Didn't really work out that way. Surprise.


Well, no. But a lot of top level people from both sides walked away from the merger table smelling like fresh country air. Get a little more breathing room to issue debt (and pay bonuses) on "forward-looking synergies". The important stuff.
 
2012-11-16 08:38:20 PM
Additionally, what was the total comp per employee per year? Yes, the employees may have been asked to reduce their comp. but what was the starting point?

As for the lady in the article "might as well go back to minimum wage"...what was your job? How do you pay in medical benefits? What does your pension look like? What is your pay or is this just hyperbole?
 
2012-11-16 08:39:30 PM

Chakro: Fark unions and fark the sheep that belong to them. That doesn't mean I agree with management, I just think union members deserve this kind of crap for blindly following their union bosses.


Blind, impotent, ignorant rage is the best form of rage.
 
2012-11-16 08:49:41 PM

machodonkeywrestler: Lsherm: The CEO pay wasn't going to save the company. It was an asshole move, but hardly responsible for the downfall. The article even said as much:

Certainly, the company agreed to an out-sized pension debt, but the decision to pay executives more while scorning employee contracts during a bankruptcy reflects a lack of good managerial judgement. Click on the links in that paragraph (especially the second one) and you'll get an outline of how farked that company really was.

Yeah, it was more like the CEO's failure to fully fund the pensions, not the actual pay of the CEO.


Well, they should have been funding it way back before they ever declared bankruptcy. Once they did in 2004, they did assume what appears to be a billion dollar responsibility to fund it, but they did that by borrowing from hedge funds. Which, ultimately, they couldn't pay back.
 
2012-11-16 08:52:05 PM

MrEricSir: oren0: I know liberals aren't great at math, but come on. The CEO got an extra $1.8M/year. Hostess had 18,500 employees. So this increase could have been redistributed to all employees, giving each of them $100.

So in other words, you didn't RTFA and you're fine with a CEO getting a million dollars for running a company into the ground.


I didn't say I was fine with it, I said that the argument that his pay was the cause of the bankruptcy flies in the face of basic math. You can try to make emotional arguments about symbolism if you want do, but it doesn't change the fact that the money given to the CEO was insignificant in the scheme of the whole bankruptcy.
 
2012-11-16 08:52:20 PM
OCCUPY, MOTHERfarkERS!
 
2012-11-16 08:53:09 PM
I could see retaining upper management under the circumstances for a publicly traded company, but not so much a private one. Bad management, but what was done was done. At least the union employees will have their principles to keep them warm over the winter.
 
2012-11-16 08:57:09 PM
If corporations are people, they're sociopaths and should be medicated and/or institutionalized.
 
2012-11-16 08:58:15 PM

Sergeant Grumbles: And is anyone further surprised when the free market asstards roll into to blame the unions for refusing a deal that sees their wages slashed and benefits cut to award a 300% raise to their boss?


Yeah...getting paid ZERO is sooooo much smarter.

Congrats guys.
 
2012-11-16 09:01:24 PM

MrEricSir: oren0: I know liberals aren't great at math, but come on. The CEO got an extra $1.8M/year. Hostess had 18,500 employees. So this increase could have been redistributed to all employees, giving each of them $100.

So in other words, you didn't RTFA and you're fine with a CEO getting a million dollars for running a company into the ground.


Prob had to pay the officers extra money to stick around since they could see the ship going down and THEY are able to get other jobs.

If you lose all your management , incompetent thou they may be, you are def going into bankruptcy .
 
2012-11-16 09:20:04 PM

LouDobbsAwaaaay: Chakro: Fark unions and fark the sheep that belong to them. That doesn't mean I agree with management, I just think union members deserve this kind of crap for blindly following their union bosses.

Blind, impotent, ignorant rage is the best form of rage.


That's all the workers have left so there's that. Meanwhile the owners, investors and union bosses move on and are not nearly the worse off for it in the end.
 
2012-11-16 09:20:12 PM

Chagrin: Take a look at their bankruptcy filing. They're a little over 1 billion in debt, and 97% of that debt is to their pension (which works out to a ~$50K per employee benefit). So not only are they raiding the hell out of the company to pay their executives more, they've really just been running the whole company off the employee pensions.

farkers.


They are doing this to dump the pensions.

Old people don't deserve pensions you know.
 
2012-11-16 09:24:38 PM
oh for fark's sake!

Cost of a pension is around 46%Link and average CEO pay is 10 million Link.

Average CEO pay would work out to $833.34(rounded up!) per year per employee for the 12,000 employees. This guy was making like 10% of average.
Average pension cost would be $11481.60 per year per employee assuming the employees work full time and only make $12 per hour.
Since they were union employees they likely made substantially more so the cost of the pension would likely be higher, but I'm going with a known wage for a factory worker.(He works at the Russell Stover plant in Corsicana, TX which has to managed not go bankrupt.)

Thus a conservative estimate of the pension cost is $11481.60 per employee times 12,000 employees for a total of $137,779,200.00 per year.

Now, I know a lot changes with science every year, so a lot of what I was taught in school is no longer valid, but I'm going to go out on a limb here and say that my math is still good and $2,550,000
If my company were in trouble and struggling to stay in business I'd stop funding pensions too.

And if my employer explained what was happening I'd be OK with keeping my job and losing my pension.
Job without pension > nothing.

Just sayin'
 
2012-11-16 09:32:10 PM
What happened at Hostess was like a terminal cancer patient deciding to shoot himself in the head. Yeah, he had cancer, but the cause of death was a motherfarking bullet.

And the unions are not responsible for killing the company, the idiots at the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union are responsible.

The Teamsters Union looked at Hostess's books and realized that there was no way that the company could fork over any more money, and they compromised.

The Bakers union weren't going to let a little thing like math get in the way of their pensions.
 
2012-11-16 09:32:33 PM

Chakro: Fark unions trolls and fark the sheep that belong to laugh at them. That doesn't mean I agree with my troll controllers, I just think union members trolls deserve this kind of crap for blindly following their union troll bosses.


FTFY, troll.
 
2012-11-16 09:33:01 PM

veive: Now, I know a lot changes with science every year, so a lot of what I was taught in school is no longer valid, but I'm going to go out on a limb here and say that my math is still good and $2,550,000


ampersand-l-t-semicolon; ampersand-g-t-semicolon

Learn them lest the HTML parser makes you look silly.
 
2012-11-16 09:35:46 PM

HempHead: Old people don't deserve pensions you know.


Straightening twinkies for 37 years doesn't mean the company should have to pay you 50k/yr until you die after you retire. Max your 401k, accept the social security, hell, find another job. The retirement age will go up under this administration anyways.

If the union had anything to lose in this deal, it never would have happened. They'll get a new crop of people straightening twinkies at $10/hr instead of $20 and dues will still be the same per week. Hell, now is a good time to raise dues. Watch that happen.
 
2012-11-16 09:41:54 PM

veive: And if my employer explained what was happening I'd be OK with keeping my job and losing my pension.


I don't think there is a lot of labor contracts out there that allow for that information to come directly from the employer without the union filtering it or flat out writing it.
 
2012-11-16 09:54:07 PM
I swear corporations are like abusive husbands: "Look what you made me do!"
 
2012-11-16 09:55:03 PM
Correlation does NOT equal causation.

The CEO's raise had nothing to due with the bankruptcy and to claim it does is specious.

Did he earn more money that the line workers?

Yeah. So? Why does this bother you?
Bosses make more money.
If any of the union workers had truly planned their lives they would be CEOs or have their own companies but they didn't so they don't.

Stop biatching and being jelous of those who've done better than you.
Obama is a liar; you DON'T deserve other people's money.
 
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