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Hostess Going out of Business

The mean hourly wage for the designation of “bakeries and tortilla manufacturers” was $12.57 in 2011, according to the Bureau of Labor Statistics. Workers manning the Hostess picket lines this week were earning roughly 35% more than the national average.

“The union’s demands had plagued Hostess for years, forcing — through the legalized monopolization of labor supply — wages that the market wouldn’t bear,” writes Bob Confer in a column for The New American. “The striking line workers were paid healthy salaries, $16 to $18 per hour. :faint::faint::faint: In a low-profit, low-selling-price business such as baked goods, those wages aren’t sustainable, especially considering that baking and distribution involve a lot of manpower.”

“Hostess was looking for wage concessions of only eight percent,” continued Confer. “Even after the cuts, Hostess still would have been paying their workers handsomely, 24 percent more than the industry norm. Mind you, this one-year cut would have been followed by guaranteed wage increases of three percent in each of the three years that followed, capped off by one percent in the fourth year. So, the pain would have been only temporary and cancelled out in just three years.”

Those high wages, do not even include benefits like healthcare and extras like pensions that most people do not get at all.
 
chgobob33 said:
Possibly:
"Con Agra and Flowers Foods are among the companies that have expressed interest in Hostess, but Mexican company El Grupo Bimbo may have an edge, the Christian Science Monitor reported Saturday. Grupo Bimbo, headed by Mexican billionaire Daniel Servitje Montull, is the largest bread-baking company in the world. Economists say part of the reason Hostess struggled was due to high sugar tariffs meant to protect local producers, the Monitor reported.
Grupo Bimbo could take advantage of lower sugar prices in Mexico"
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Is what killed Maurice Lennell Cooky Company.
 
They were looking for wage concessions from workers while their executive staff were taking multi-million dollar raises, bonuses, and golden parachutes.

This Hostess thing is just what it looks like when companies become irrelevant. The company was bought out of it's last BK and nobody really expected it to bounce back. This closure was predictable.

HOWEVER, no BK judge will just discard the brand. They will sell it to whichever bidder will offer the most for the brand so Hostess' creditors can be paid.

Blaming it on the union workers and the union is specious given the other factors - however, it is valid to point out that unionization and worker support of unions is on the decline. Mostly because of a difference in worker thinking. I saw this with my DHs job. Workers diluted the value of their union work with side work and employers undercutting union work. Now all of his fellow tradesmen, if they can find work, it is not union, it is at around $10-$15 per hour (down from $25-30), with no benefits, and paid on a 1099 so they are responsible for their own taxes. Or it is piecework/paid by the job, which depending on the job can calculate out to much less than even minimum wage when taxes & expenses are taken into account.

I think a lot of this worker attitude stems from the governmental golden parachute available to everyone. Until now there has been pretty much unlimited unemployment, and a host of other gov't benefits to fill the gap. Not making a value judgement about any of those things, but when those safety nets are not there, unionization increases because workers will demand fair compensation and benefits because the alternative is starving.

If you look at the financials, Hostess went BK during their highest revenue period in their history. Sales are not down. They simply dismantled the company. It wasn't an accident.
 
i had a dream i was at a outlet center fighting over there apple pies& wonderbread.... lmao
 
savor said:
http://chicago.craigslist.org/chc/clt/3419864660.html
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Holy crap!


"Serious buyers only my number is 7852098787 please no calls Text only I work nights. I have for sale the last three boxes of Hostess ****ins that I could find in the Valporaiso Northern Indiana area. 60 ****ins total two boxes of blue berry one box of banana walnut. Unopened and refrigerated. The longer time passes the more the price goes up. And included in the price one pack of Soft batch chocolate chip cookies ione of the last products Hostess made. They still have New on the package. I will sell iteams seperate. One box of ****ins 120.00 and the pack of cookies 200.00. I already sold the two boxes of twinkies for 170.00 a box. Freeze these and sell latter for a super inflaited proffit. First come first serve.'
 
This is so silly. Hostess did not immediately run out of product the moment they announced their closure. There are warehouses and distribution centers full of this stuff out there.

This is seeming more and more like a stunt - just silly.
 
to be honest i dont even know where there is a whole store and havnt even looked at regular store to see whats left but thanks for the idea
 
If I had not been at work when the story broke, I might have a freezer full of Twinkies right now :snicker:
 
Hostess STILL wants to pay the executive staff almost $2M in bonuses to stay and facilitate the closing down. So they have $$
 
From what I have read, the union contributed $3 per hour towards their pensions. In 2011, they got a letter from Hostess saying that the company was "borrowing" that money. Guess what the company doesn't have to pay back? Court says that is debt they can't pay back.

Also, I have read that the contract called to 8% concession on salary now and more cuts totaling 27% over 5 years.
Doubling of their insurance premiums
A cut in the quality of their insurance plans.
Total withdrawal from pensions.
It was in the contract that they don't have to pay back the $3/hour that they still don't have to pay back due to the courts.
 
CharlieQ said:
Like buy some myself and create my own listing. :snicker:
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I was trying to talk IC2 into hoarding Twinkies then starting a business but she wouldn't bulge. I bet she is crying in her non-Twinkie filled home as we speak knowing she passed up a deal of a lifetime. :roll:
 
Fuzzysox said:
I was trying to talk IC2 into hoarding Twinkies then starting a business but she wouldn't bulge. I bet she is crying in her non-Twinkie filled home as we speak knowing she passed up a deal of a lifetime. :roll:
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Yep :cry1: I should have said to heck with it and ran to the Dom's and Target by work at lunch.

I'd have had trouble parting with them to sell on eBay though :lol:
 
icoupon2 said:
Yep :cry1: I should have said to heck with it and ran to the Dom's and Target by work at lunch.

I'd have had trouble parting with them to sell on eBay though :lol:
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I wouldn't!! I don't ebay but I would just to make extra money to put away.
 
Clars said:
Also, I have read that the contract called to 8% concession on salary now and more cuts totaling 27% over 5 years.
Doubling of their insurance premiums
A cut in the quality of their insurance plans.
Total withdrawal from pensions.
It was in the contract that they don't have to pay back the $3/hour that they still don't have to pay back due to the courts.
Click to expand...

As I quoted before its not even a real 8% cut since they get the original wage back over the next 3 years, its temporary:

chgobob33 said:
“Hostess was looking for wage concessions of only eight percent,” continued Confer. “Even after the cuts, Hostess still would have been paying their workers handsomely, 24 percent more than the industry norm. Mind you, this one-year cut would have been followed by guaranteed wage increases of three percent in each of the three years that followed, capped off by one percent in the fourth year. So, the pain would have been only temporary and cancelled out in just three years.”
Click to expand...

As I find out more you just :faint: at what the unions made the company deal with and that those management raises did not happen in reality:

http://www.foxbusiness.com/investing/2012/11/19/death-twinkies-union-contract-hit/

"The unions will say management had given itself millions in pay raises while demanding worker cuts. (True, but the raises were barely a rounding error at a company that had lost almost half a billion bucks in two years; and Rayburn rescinded the raises anyway, making the brass work for a dollar a year apiece.)"

"And here’s what you won't hear the unions ever talk about:

--Hostess paid out almost $100 million in health benefits for retirees last year, but over half of it covered workers who never had worked at Hostess. The Teamsters’ onerous and antiquated “multi-employer pension plan” foists the pension obligations of a bankrupt company on to the balance sheets of surviving rivals—ensuring a steady death spiral in any declining industry. A similar “MEPP” almost killed YRC, one of the largest trucking companies.

--Union rules forced Hostess to run separate truck fleets for delivering bread vs. sweets. A sweets driver, serving a 7-11 store, was forbidden from restocking shelves with breads already delivered and waiting in the back—he had to call for a bread driver to swing by and handle. :faint:

--The union restrictions on the 5,500 distribution routes at Hostess made it unprofitable to serve tiny outlets, yet Hostess was barred from using smaller, sleeker—and non-union—distributors.

--Workers were asked to take an 8% pay cut and pay 17% of their health-care costs instead of zero. Welcome to the club, guys. For this, they would have received 25% ownership of Hostess plus $100 million of Hostess debt to be paid back to the unions."



​
 
The judge ordered them to mediation :cartwheel:

How did we not know before that the union hadn't gone through all the steps? Oh wait we were focused on those golden, delicious sponge cakes :giggles:
 
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