the Hostess Story

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This topic contains 70 replies, has 0 voices, and was last updated by  JoB 3 years, 9 months ago.

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  • #605617

    JoB
    Participant

    i kept this in politics because the Wonder liquidation has lately been of interest in the political topics

    for those who want to read beyond the headlines i found this story…

    http://www.zerohedge.com/news/2012-11-16/hostess-liquidation-curious-cast-characters-twinkie-tumbles

    the news media story line for this liquidation is the strike…

    but Hostess came out of it’s last bankruptcy with more debt than it went in..

    it doesn’t take a business wizard to figure out that lightening a business’s labor obligations isn’t enough to bail out a company overloaded with debt…

    but they went back to the same well for their solution and then blamed labor for their demise.

    interesting reading

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    #777725

    JoB
    Participant

    how the numbers stack up in this story

    http://dealbook.nytimes.com/2012/01/13/hostess-has-a-lot-of-debt-but-few-in-finance/

    i linked to this article because it was sourced in a poster on facebook that cited these figures for Hostess debt

    $50 mil trade creditors

    $36 mil lease obligations

    $850 mil secured debt

    $75 mil debtor in possession loans (the investors)

    $80 mil accrued employee compensation (pension obligations)

    i should note that i do not remember see the figures for secured debt or lease obligations in the linked article…

    but following the money trail does get pretty interesting… especially when you follow the trail of intention…

    like no treasury department?

    for the uninitiated..

    that means no-one in-house was in charge of watching the money

    #777726

    DBP
    Member

    Frankly, it’s hard to defend the continued existence of Hostess on any grounds. On the one hand, I feel bad for the workers who lost their jobs. On the other, the demise of the Twinkie can only bode well for the physical health of America.

    (Hooper, feel free to chime in here. But be nice about it, please.)

    I just hope that Twinkies don’t return in some new incarnation. On the Seattle Times site, a guy was saying that they’re going to start shipping them down from Canada, where Hostess is still operating in the black, union and all.

    #777727

    Smitty
    Participant

    Sorry, DBP but I think that line of thinking is ridiculous.

    I am a gen x’er who hangs around a LOT of people my age who all grew up with a twinkie or a ding dong in their lunches. Very, very few have weight issues. Everything is about moderation, and that is taught at home, not dictated by the feds (see; marijuana, alcohol, etc).

    In my experience it is the kids whose parents don’t allow candy in their homes who are the ravenous ones you have to watch a birthday parties!

    #777728

    redblack
    Participant

    smitty: the fed didn’t dictate that hostess go bankrupt. that was the free market working its magic.

    as such, hostess failed. part of it was probably due to increased awareness about the composition of our food stuffs and concentration on better eating habits by consumers. and part of it was probably a push-back against corporate food stuffs in favor of locally-sourced food. both of those are free market decisions.

    for example, top pot is doing well here at home. but what about dunkin donuts?

    anyway, i heard a blurb this morning that PBR is looking at buying hostess’ operations.

    <dennis hopper>

    “heineken??! PABST BLUE RIBBON!!”

    </dennis hopper>

    #777729

    JoB
    Participant
    #777730

    Smitty
    Participant

    “<dennis hopper>

    “heineken??! PABST BLUE RIBBON!!”

    </dennis hopper>”

    Top-10 all-time favs. You made my day…….but forgot the best part of that line!

    I agree on the free market, just taking issue with the comment regarding their part in the physical state of America.

    #777731

    JoB
    Participant

    Smitty..

    here’s the problem twinkie was facing…

    when you are counting your carbs and calories

    and you ask yourself…

    twinkie or dark chocolate salted caramel

    dark chocolate salted caramel wins…

    bet you didn’t have that choice in your lunch box

    #777732

    montanapup
    Participant
    #777733

    JoB
    Participant

    montanapup..

    take a good look at Hostess’s bottom line

    it was only a matter of time before liquidation

    the investor/owners said no to more money…

    the workers could have caved..

    but how long would they have kept their jobs in a rapidly failing company?

    and if they gave up rights to their pensions

    i believe even the federal pension guarantee fund wouldn’t cover them …

    you might want to think this one though before you give a knee jerk reaction..

    what would you do?

    #777734

    montanapup
    Participant

    no knee jerk reaction here – just commentary. we can all be arm chair financial quarterbacks on what we would have done – i dont know. again, everyone lost.

    #777735

    dobro
    Participant

    “Either way, everyone lost.”

    Everyone except upper management. The CEO and his fellows received 100% to 300% raises in the lead-up to the crisis. Wonder if they saw it coming?

    Here’s some testimony from a Hostess employee about what really happened…

    http://www.dailykos.com/story/2012/11/18/1162786/-Inside-the-Hostess-Bankery

    #777736

    JanS
    Participant

    DBP…do you ever eat bacon? fast food? do you follow a stringent healthy diet? I do not eat Hostess products, although I am a sugar-holic. As one above said, every thing in moderation..

    someone did win..Little Debbie…

    and on the east coast? Tastycakes (one can sometimes get them at Hey Paisan , in Burien or Philadelphia Fevre , Madison and 24th)

    #777737

    JanS
    Participant

    more about the CEO, etc….make sure to read the first comment by Erik Reider…

    http://thinkprogress.org/economy/2012/11/16/1203151/why-unions-dont-shoulder-the-blame-for-hostesss-downfall/

    #777738

    mtnfreak
    Participant

    EVERYONE saw this coming. This is what, the third time Hostess filed for bankruptcy? I don’t believe that the union reps weren’t warned about the consequences of a protracted strike.

    Proof? The union is still protesting outside of Seattle factory last I heard.

    I am a union member, and I still think that the management AND the union did EVERYONE a disservice in this incident. The people it will hurt the worse: the line employee, of course.

    #777739

    dobro
    Participant

    Take a minute and read that article I posted from the Hostess employee. He outlines the ways the unions were undermined and shafted by the management.

    Here’s one quote…

    “Remember how I said I made $48,000 in 2005 and $34,000 last year? I would make $25,000 in 5 years if I took their offer.

    It will be hard to replace the job I had, but it will be easy to replace the job they were trying to give me.

    That $3+ per hour they steal totaled $50 million last year that they never paid us. They sold $2.5 BILLION in product last year. If they can’t make this profitable without stealing my money then good riddance.”

    #777740

    Talaki34
    Participant

    The problems can be traced back to Continental Baking Company and then Interstate Brands Corporation acquisition of CBC from Ralston Purina. Mix in Charles Sullivan, Frank Coffey, James Elsesser and other company executives. None had any good decision making skills and were loath to listen to those who did.

    Year after year mid-level managers and workers watched helplessly as each bad decision gave birth to more bad decisions. It was almost as if many in upper management were addicted to poor decision making and could not or would not help themselves. Those in the positions of responsibility who were trying to keep the business from imploding either left in frustration or just gave up and waited for the worst to happen and it finally did.

    #777741

    Smitty
    Participant

    “bet you didn’t have that choice in your lunch box”

    I was a free (hot)lunch kid, believe it or not!

    Back in the day when we had a different color ticket than everyone else. Talk about stigma. But, I got over it…..I think

    #777742

    DBP
    Member

    The problems can be traced back to Twinkie the Kid’s whipped-lard ectoplasm and World Domination Corp’s short-sighted decision to dump a half cup of depleted uranium into every batch instead of the full cup recommended by the FDA.

    Year after year, mid-level Ho Ho’s and Ding Dongs watched helplessly as each bad batch gave birth to a new army of defective zombie marauders. It was almost as if many in upper management were addicted to the idea of non-biodegradability and could not or would not help themselves.

    Those in the positions of responsibility who were trying in vain to devise a landfill-safe Twinkie finally ate one out of frustration and waited for the end to come.

    But it never did, you see, because that which cannot be digested . . . cannot kill!

     

     

     

    And somewhere there lurks a creature – with the face of a child and the heart of a demon – cackling in demented glee.

       

     

    #777743

    Talaki34
    Participant

    Aren’t you just a funny little man.

    #777744

    c@lbob
    Member

    This was an inenivitable train wreck.

    There was no hope that Hostess would regain its glory days, when Howdy Doody could get kids to kick a scream at the check out line for cupcakes or Twinkies. Our mom’s, not wanting to risk a scene, would comply with the scam Bob Smith had foisted upon them.

    Today’s moms have a range of reply, supplied by PCC – “Have a biscoti pretzel bite, darling” says a modern mom. Who could resist?

    Besides, search and search, you will find no Twinkies at PCC.

    This assault on the corporate treasury may amount only to the buzzards cleaning the desert.

    KB Toys, however, I’m not so sure.

    #777745

    Talaki34
    Participant

    You have to know the company history to understand the problems. Hostess would have done just fine if they had listened and had been flexible in the market.

    #777746

    JoB
    Participant

    Talaki34

    “Hostess would have done just fine if they had listened and had been flexible in the market.”

    To do so would have required managers who understood they were making a product …

    #777747

    DBP
    Member

     

     

     

     

     

    I wonder. Can people get kicked off this blog just for being annoying?

    Oh jeezus . . . I hope not.

     

    #777748

    kootchman
    Member

    The union crapped in their own nest.

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