Fuhgeddaboudit Posted November 16, 2012 Share Posted November 16, 2012 http://money.cnn.com/2012/11/16/news/companies/hostess-closing/ Hostess Brands -- the maker of such iconic baked goods as Twinkies, Devil Dogs and Wonder Bread -- announced Friday that it is asking a federal bankruptcy court for permission to close its operations, blaming a strike by bakers protesting a new contract imposed on them. The closing will result in Hostess' nearly 18,500 workers losing their jobs as the company shuts 33 bakeries and 565 distribution centers nationwide. The bakers' union represents around 5,000. Hostess will move to sell its assets to the highest bidder. That could mean new life for some of its most popular products, which could be scooped up at auction and attached to products from other companies. "We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," said CEO Gregory Rayburn in a statement. The company had given a 5 p.m. ET deadline for the bakers to return to work or face a shutdown of the company. The unions at Hostess could not be reached immediately for comment on the decision. Hostess filed for bankruptcy in January, its second trip to bankruptcy court since 2004. It previously emerged from restructuring in 2009 after a four-and-a-half year process. The company is now controlled by a group of investment firms including hedge funds Silver Point Capital and Monarch Alternative Capital. In September, one of its major unions, the International Brotherhood of Teamsters, voted narrowly to accept a new contract with reduced wages and benefits. The bakers' union rejected the deal, however, prompting Hostess management to secure permission from a bankruptcy court to force a new concession contract on workers. The new contract cut salaries across the company by 8% in the first year of the five-year agreement. Salaries were then scheduled to bump up 3% in the next three years and 1% in the final year. Hostess also reduced its pension obligations and its contribution to the employees' health care plan. In exchange, the company offered concessions, including a 25% equity stake for workers and the inclusion of two union representatives on an eight-member board of directors. UNION POWER! But really, 'Merica obesity rates decrease. Link to comment Share on other sites More sharing options...
NYR2711 Posted November 16, 2012 Share Posted November 16, 2012 This sucks, I like eating a Hostess Cupcake every now and then, and they have the best pies. Also, I love wonder bread, now I need to find a new brand of bread. Link to comment Share on other sites More sharing options...
Fuhgeddaboudit Posted November 16, 2012 Author Share Posted November 16, 2012 You would think.... do these unions really have this much power that they are forcing Hostess hand like this? Crazy shit how this works. Greed everywhere. Now all these fatties won't get to eat twinkies and shit ever again from Hostess. Link to comment Share on other sites More sharing options...
Cash or Czech Posted November 16, 2012 Share Posted November 16, 2012 My dad worked at hostess for a few years. Glad he got out this summer before this happened. The only product of theirs I'll really miss is Nature's Pride. Marginally healthier bread that still tasted good. Original wonder break wasn't that good. Too flimsy and manufactured. You would think.... do these unions really have this much power that they are forcing Hostess hand like this? Crazy shit how this works. Greed everywhere. Now all these fatties won't get to eat twinkies and shit ever again from Hostess. Yes, they do. They cause so many headaches for upper management and the negotiations at the beginning weren't going well. They struck a deal, but apparently more issues have come up since. THe union's expenses effectively killed the company, so I hope the idiots there are happy with the results they got from hard bargaining. Link to comment Share on other sites More sharing options...
Fuhgeddaboudit Posted November 16, 2012 Author Share Posted November 16, 2012 My dad worked at hostess for a few years. Glad he got out this summer before this happened. The only product of theirs I'll really miss is Nature's Pride. Marginally healthier bread that still tasted good. Original wonder break wasn't that good. Too flimsy and manufactured. Yes, they do. They cause so many headaches for upper management and the negotiations at the beginning weren't going well. They struck a deal, but apparently more issues have come up since. THe union's expenses effectively killed the company, so I hope the idiots there are happy with the results they got from hard bargaining. Nice to see someone with some experience here to be honest. Crazy story. They make Nature's Pride??!?! FUCK. Link to comment Share on other sites More sharing options...
NYR2711 Posted November 16, 2012 Share Posted November 16, 2012 From what I have heard over the past couple of days, Hostess filed for bankruptcy and wanted the workers to give up their pensions, benefits and take a huge pay cut. There are 18,500 employees that work for hostess and only about 5,000 are unionized. Hostess doesnt want to pay their employees. From what I read, they are going to sell off all of their products as well. I dont know how good that will be because if a different company is making twinkies from cup cakes, the taste is going to be a big difference from the original taste that everyone loves. Either way, a major company like Hostess closing is bad news for the economy as well. Link to comment Share on other sites More sharing options...
NYR2711 Posted November 16, 2012 Share Posted November 16, 2012 My dad worked at hostess for a few years. Glad he got out this summer before this happened. The only product of theirs I'll really miss is Nature's Pride. Marginally healthier bread that still tasted good. Original wonder break wasn't that good. Too flimsy and manufactured. Yes, they do. They cause so many headaches for upper management and the negotiations at the beginning weren't going well. They struck a deal, but apparently more issues have come up since. THe union's expenses effectively killed the company, so I hope the idiots there are happy with the results they got from hard bargaining. The number of union employees is so small compared to the number of employees. They employ 18,500 and only 5,000 are unionized. This is poor management by hostess. They had already filed for bankruptcy and wanted that to take away everything from all of its employees, even the non union members. Link to comment Share on other sites More sharing options...
Pete Posted November 16, 2012 Share Posted November 16, 2012 The way I understood it is that they couldn't function because of how much they had to pay union workers. Link to comment Share on other sites More sharing options...
Phil Posted November 16, 2012 Share Posted November 16, 2012 I'm a sucker for Twinkies. This sucks. It's gonna be like Zombieland. Link to comment Share on other sites More sharing options...
Fuhgeddaboudit Posted November 16, 2012 Author Share Posted November 16, 2012 The way I understood it is that they couldn't function because of how much they had to pay union workers. That's how I took it. I thought most of their employees were union workers which I guess is not entirely true. Link to comment Share on other sites More sharing options...
josh Posted November 16, 2012 Share Posted November 16, 2012 From what I have heard over the past couple of days, Hostess filed for bankruptcy and wanted the workers to give up their pensions, benefits and take a huge pay cut. There are 18,500 employees that work for hostess and only about 5,000 are unionized. Hostess doesnt want to pay their employees. From what I read, they are going to sell off all of their products as well. I dont know how good that will be because if a different company is making twinkies from cup cakes, the taste is going to be a big difference from the original taste that everyone loves. Either way, a major company like Hostess closing is bad news for the economy as well. No, 5,000 of the unionized employees are bakers. All the manufacturing, distribution, and warehouse employees are organized. Wiki - On January 10, 2012 Hostess Brands filed for Chapter 11 Bankruptcy for the second time. In a statement in its filing, the company said it "is not competitive, primarily due to legacy pension and medical benefit obligations and restrictive work rules." The company said it employs 19,000 people and carries more than $860 million in debt. The company said it would continue to operate with $75 million debtor-in-possession financing from Monarch Alternative Capital, Silver Point Capital and other investors.[3] Although they cut the wages, benefits and pension obligations crippled the company. Once again, good old union taking money and forcing companies out of business. On top of that, there was shit going on with the execs, too, they doubled their salaries when they knew the business was going under... then it was discovered and I think they lost their wages. This entire company represents the issues with greedy owners and greedy unions. The place was a political machine. No shock that it could not survive. Link to comment Share on other sites More sharing options...
Cash or Czech Posted November 16, 2012 Share Posted November 16, 2012 The number of union employees is so small compared to the number of employees. They employ 18,500 and only 5,000 are unionized. This is poor management by hostess. They had already filed for bankruptcy and wanted that to take away everything from all of its employees, even the non union members. That's fantastic, but who are the unionized workers? The guys in the bakery and the guys loading up the trucks and moving product around the warehouse. When they're already making $17.50 an hour plus benefits and asking for even more, what can you do? Costs are rising too much to remain profitable. You need these guys in order to be in business, but you can't afford the union's demand for their wages. Also, Hostess has never had good management. Their upper-level executives were always taking huge bonuses that drove the company further and further into debt, which is why they filed for Chapter 22 (Chapter 11 twice ;)) Link to comment Share on other sites More sharing options...
josh Posted November 16, 2012 Share Posted November 16, 2012 That's fantastic, but who are the unionized workers? The guys in the bakery and the guys loading up the trucks and moving product around the warehouse. When they're already making $17.50 an hour and asking for even more, what can you do? Costs are rising too much to remain profitable. You need these guys in order to be in business, but you can't afford the union's demand for their wages. Also, Hostess has never had good management. Their upper-level executives were always taking huge bonuses that drove the company further and further into debt, which is why they filed for Chapter 22 (Chapter 11 twice ;)) 17.50 + > $500 month per individual on single insurance, $1500+ for those on family + >$500 month per employee per pension They need employees to work.. they just dont need these employees to work. Federal law prevents them from doing anything else but closing. Link to comment Share on other sites More sharing options...
Pete Posted November 16, 2012 Share Posted November 16, 2012 This is the problem with these unions of unskilled workers. Triple minimum wage to load a truck. Insane. Link to comment Share on other sites More sharing options...
josh Posted November 16, 2012 Share Posted November 16, 2012 This is the problem with these unions of unskilled workers. Triple minimum wage to load a truck. Insane. *load half a truck Link to comment Share on other sites More sharing options...
Fuhgeddaboudit Posted November 16, 2012 Author Share Posted November 16, 2012 *load half a truck Must be harder than doing loads of other stuff Link to comment Share on other sites More sharing options...
NYR2711 Posted November 16, 2012 Share Posted November 16, 2012 That's fantastic, but who are the unionized workers? The guys in the bakery and the guys loading up the trucks and moving product around the warehouse. When they're already making $17.50 an hour plus benefits and asking for even more, what can you do? Costs are rising too much to remain profitable. You need these guys in order to be in business, but you can't afford the union's demand for their wages. Also, Hostess has never had good management. Their upper-level executives were always taking huge bonuses that drove the company further and further into debt, which is why they filed for Chapter 22 (Chapter 11 twice ;)) I agree they make a lot of money, but this is also the number two bread company in the nation behind Stroehman. The main problem was poor management and the higher ups taking their huge bonuses. From what I heard earlier this week was that Hostess wanted to cut employee salaries in half, get rid of pensions for current and future employees and cut medical benefits. I dont know anyone that would take a 50% paycut. This is a company that had annual sales of $2.5 billion. There is more to this than just the employees expenses. They refused to negotiate any new contracts and only wanted the employee give backs. Link to comment Share on other sites More sharing options...
josh Posted November 16, 2012 Share Posted November 16, 2012 18,000 x 50,000 puts you at 1bil per year. And that's well under the average total compensation per employee. Link to comment Share on other sites More sharing options...
Cash or Czech Posted November 16, 2012 Share Posted November 16, 2012 This is the problem with these unions of unskilled workers. Triple minimum wage to load a truck. Insane. Considering I could've done it and should've been over the summer, yeah it's a hell of a lot of money for unskilled workers. And it brings to the forefront the idea that why are unskilled workers deserving of such high pay? They aren't. No offense to anyone, but I've done more work for less money. The fact that unions can form over such unskilled and mundane work as pushing bread is as much bullshit as anything. I understand that getting their basic necessities is important and they don't want to be taken advantage of, but the unions just kept pushing for more and more, acting like these guys can't be replaced with an average joe off the streets. Link to comment Share on other sites More sharing options...
Patrick Bateman Posted November 16, 2012 Share Posted November 16, 2012 Unions are killing America Link to comment Share on other sites More sharing options...
Fuhgeddaboudit Posted November 16, 2012 Author Share Posted November 16, 2012 Unions are killing America :+1: Also, another question. Are unions a big reason why the S.I tolls and MTA tolls are going up so fucking often? I'm getting sick of it Link to comment Share on other sites More sharing options...
Parsley Posted November 16, 2012 Share Posted November 16, 2012 Damn. RIP. Grew up on Wonder Bread and my fair share of Hostess Cupcakes and Twinkies (preferred the cupcakes). These days I'm an Entenmanns fiend. Link to comment Share on other sites More sharing options...
H-Dreamer Posted November 16, 2012 Share Posted November 16, 2012 I never get the hate Americans seem to have for Unions. A company that goes bancrupt cause it can't survive without paying their employees minimum wages, wasn't that healthy to begin with. Link to comment Share on other sites More sharing options...
josh Posted November 16, 2012 Share Posted November 16, 2012 I never get the hate Americans seem to have for Unions. A company that goes bancrupt cause it can't survive without paying their employees minimum wages, wasn't that healthy to begin with. The union environment here is extremely different than in other countries. Unions are essentially legalized Mobsters in the US. And minimum wages? What are you talking about? Link to comment Share on other sites More sharing options...
Dave Posted November 16, 2012 Share Posted November 16, 2012 Is it just me, or did Hostess cakes suck balls anyway? Link to comment Share on other sites More sharing options...
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