http://www.huffingtonpost.com/2012/11/16/nationalize-twinkie-petition_n_2147058.html

Since we all know that government manages businesses better.

Here is the actual petition:
https://petitions.whitehouse.gov/petition/nationalize-twinkie-industry/cJz0ngJR

11/17/2012 8:08:46 PM

Stupid idea.

My take on the whole Hostess thing is a combination of mismanagement, failure to adapt, and vulture capitalism.

-Something like 6 CEOs since their last bankruptcy, none of which had experience in baked goods
-All their products were unhealthy, and they had PR problems because of it.

This is the dark side of free market capitalism and it represents the typical route that failing corporations take nowadays. Pretty much the same as the Bain game. Gut the business and riddle it with debt, pay off the CEO and execs, in this particular case the CEO who came onboard in March 2012 got a 300% raise from 700k to 2.5 mil, and close up shop and blame it all on the laborers and unions. The truth is Hostess was already set to close down plants regardless of the outcome of the union contract.

The Hostess pension plans are beyond fucked. I however will not miss those treats as I never ate them.

11/17/2012 10:19:24 PM

I tried a box of twinkies this year and they had a funny stawberry aftertaste and it has no strawberry in it.

11/17/2012 10:31:30 PM

^^ You summed up most of my thoughts on the Hostess co.

They should have adapted to the market...that is, healthier alternative products. They did not do this.

They also had inefficient old plants... anyway, I won't miss twinkies either.

[Edited on November 17, 2012 at 10:37 PM. Reason : gd it geniusboy]

11/17/2012 10:37:25 PM

If GM and Chrysler can get a bailout, why not Hostess?

11/17/2012 11:47:56 PM

Quote :

"-All their products were unhealthy, and they had PR problems because of it."

What about Nature's Pride, Beefsteak, Butternut, and Wonder breads?

BTW, Twinkies won't go away, but you could see them produced by McKee Foods (of Little Debbie fame) or Bimbo (biggest bakery in the world)...

[Edited on November 18, 2012 at 12:46 AM. Reason : ...or the guys who own Pabst, lol

11/18/2012 12:44:36 AM

Most of their product lines aren't going to die. I'm sure some other food company will pick up their assets in a fire sale.

11/18/2012 2:09:09 AM

Too delicious to fail.

11/18/2012 3:22:19 AM

little debbie twinkies bee-atch

11/18/2012 7:54:42 AM

Oh look, someone pointed out that their products are unhealthy.

11/18/2012 8:35:45 AM

Quote :

"Most of their product lines aren't going to die. I'm sure some other food company will pick up their assets in a fire sale."

How is this any different than the automobile or banking industries? "Too big to fail" is a myth peddled by large corporations (and related unions) when their expenses and liabilities have grown far beyond what is efficient or optimal.

You can justify literally any federal intervention into a would-be bankruptcy by asking, "What about the jobs!?", and you can then later brag about how it was such a success when those businesses still exist. What can never be known is how much better the company would have been if the owners were forced to sell the capital to some better managers and clear out the burdensome pensions and union contracts.

In the case of the automobile industry, it's not as if the factories would have just been demolished and all of the skilled workers would have been permanently out of a job. The factories could have easily have been taken over by new management, probably by some company that was actually profitable without government assistance. The factories still would have been manned by American workers, but there would likely be foreign owners, and that's not a problem.

The same is true here. It's extremely likely that the Hostess brand is going to stay around, it's just going to be owned and operated by a different set of people.

[Edited on November 18, 2012 at 12:10 PM. Reason : ]

11/18/2012 12:08:23 PM

so far the people who have expressed interest are only interested in the brand, not the jobs or facilities. they don't want to deal with the union, and the facilities are all out of date. when this is bought, it will probably be by someone who already has the facilities and will only add a fraction of the jobs that were lost.

11/18/2012 12:30:07 PM

^ So what?

11/18/2012 1:46:21 PM

So the claim above mine that I was responding to that the factories and workers will keep moving along doesn't make any sense

11/18/2012 2:16:22 PM

No, it makes plenty of sense. What do you think they're going to do with the factories and the machines? Buyers might not want just the brand, they want the product, and I would imagine there are custom made machines for Twinkies/Ding Dongs/whatever.

I agree that only a fraction of those Hostess workers will be rehired. It's not that there will be no damage or limited damage here. It's a total loss for the owners and many of the workers, but it's not a total loss for the economy as a whole.

11/18/2012 3:22:30 PM

Sell the buildings to another industry, I can show you plenty of bakeries that are no longer bakeries. There are 3 downtown that I can think of. Eventually facilities get too old.

11/18/2012 3:31:50 PM

Quote :

"and close up shop and blame it all on the laborers and unions."

When you specifically can't make your product and bring in revenues because the unions keep striking, then how, exactly, are the unions blameless?

I don't particularly care about twinkies or doo dads or whatever, but it is undeniable that 18000 people will lose their jobs due, in part, to union activity, and many of those people are NOT members of the union. that's pretty fucked up

11/18/2012 3:42:49 PM

Quote :

"in part"

Out of morbid curiosity...

How big a part do you think that is?

What's the threshold between 'in part' being pretty fucked up and not pretty fucked up?

11/18/2012 3:57:53 PM

The company has been mismanaged for years now by incompetent leaders. The unions weren't the last straw, and were one of the smaller factors it seems like.

Now 18,000 people are out of work because they trusted far longer than they should have a bunch of incompetent business and finance people to know what they were doing. Considering they walked away with millions, while the average worker goes on public assistance while they find a new job, maybe they DID know what they were doing.

It's pretty obvious that hostess was going out of business for a while. They just happened to luck out on the union strike so they can blame the unions.

11/18/2012 4:38:28 PM

these guys aren't incompetent, they made a lot of money

11/18/2012 4:45:12 PM

Quote :

"The unions weren't the last straw, and were one of the smaller factors it seems like. "

yeah. small factor like "being able to bring in ANY revenue because the workers are on strike"

11/18/2012 5:24:03 PM

circle of life.

11/18/2012 6:01:14 PM

^^

I can understand having that point of view. Completely ignoring everything before the [very recent] strike is a perfectly reasonable thing to do.

Those silly workers should have taken their 32% compensation cut, smiled, and asked for more. Upper lower class people are just the worst. Really, who do these people think they are? Bunch of selfish bastards.

11/18/2012 6:12:43 PM

If they were willing to take market wages they probably would still be open and still be employed, but when you're paying 40 people the wage of a skilled laborer to turn on the the twinkie machine you're going to be unprofitable. The largest controllable expense for any business is labor costs.

In any modern, industrialized business there are very few truly skilled workers needed. The number of people who are actually "bakers" at Hostess is probably incredibly minimal. I'm sure that if they were capable of doing so they would have loved to have cut their workforce in half and modernize.

By no means am I saying that the unions broke Hostess, but they sure as shit didn't help.

11/18/2012 7:59:48 PM

Quote :

"Bunch of selfish bastards."

If I were one of the roughly 12k employees who wasn't part of the bakers union had already agreed to the concessions, and was now without a job, income, benefits or even a measly portion of that pension package, I might think the bakers union guys were a "bunch of selfish bastards."

11/18/2012 8:04:52 PM

POOR PEOPLE MADE ME DO IT!

11/18/2012 9:10:04 PM

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

If this article is representative, I somehow don't think the employees are angry at each other.

11/19/2012 1:38:52 AM

^good link

Quote :

"What was this last/best/final offer? You'd never know by watching the main stream media tell the story. So here you go... 1) 8% hourly pay cut in year 1 with additional cuts totaling 27% over 5 years. Currently, I make $16.12 an hour at TOP rate of pay in the bakery. I would drop to $11.26 in 5 years. 2) They get to keep our $3+ an hour forever. 3) Doubling of weekly insurance premium. 4) Lowering of overall quality of insurance plan. 5) TOTAL withdrawal from ALL pensions. If you don't have it now then you never will. 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."

11/19/2012 6:48:27 AM

Quote :

" If GM and Chrysler can get a bailout, why not Hostess?"

could buy more votes with the auto industry, for one

11/19/2012 8:34:37 AM

^^why in god's name is a bakery factory worker making 48k?? 25k sounds reasonable for a line of work that requires no education anyway. No wonder they went out of business.





.

[Edited on November 19, 2012 at 8:36 AM. Reason : ]

11/19/2012 8:35:38 AM

It was well played but extremely dishonest for IBC to blame 10 years of bad management on a failure to reach an agreement with the bakers union.

11/19/2012 8:39:17 AM

^^

Some people say the same about teachers...

But for full time employees that have devoted generations of their families to a company, a living wage is not an unusual demand. 25k/year isn't middle class.

why aren't you pissed at the CEOs and executives giving themselves massive raises while the company stumbles through multiple bankruptcies?

11/19/2012 9:49:34 AM

teaching my child vs making a freakin twinkie.

11/19/2012 10:31:05 AM

Quote :

"The largest controllable expense for any business is labor costs."

Well, that and CEO salary, which tripled leading up to the bankruptcy.

http://www.sacbee.com/2012/11/13/4983174/hostess-continues-pattern-of-misinformation.html#storylink=cpy

11/19/2012 10:54:56 AM

Hostess, ya'll got Bain'd

11/19/2012 10:55:35 AM

^^^

LOL, that attitude just put a 2bn $ company out of business.

Congratulations, you're as "smart" as the management of Hostess.

11/19/2012 11:19:52 AM

the executives made out like bandits. they don't sound all that stupid to me.

11/19/2012 11:29:07 AM

Damn, I didn't realize how sweet some of the pensions these workers got. I need to join a union so I can make more and get more benefits!!!

11/19/2012 11:34:05 AM

It's almost as though unions are good for the American worker, and CEO's would rather liquidate a company and make off like bandits with the pensions and other assets than deal with them.

11/19/2012 11:42:58 AM

^ So does that Actual Wages number include benefits cost? Because my company pays somewhere between $300-$400 / person for health benefits (increasing at ~20% next year), which would put total compensation back in line with productivity.

Also:

Quote :

"and CEO's would rather liquidate a company and make off like bandits with the pensions and other assets than deal with them. "

What assets? Last I read, the company is millions underfunded in the pension department and has something like $1 billion in assets to cover > $800 million in debt.

[Edited on November 19, 2012 at 1:27 PM. Reason : gsf]

11/19/2012 1:24:36 PM

Quote :

"o does that Actual Wages number include benefits cost? Because my company pays somewhere between $300-$400 / person for health benefits (increasing at ~20% next year), which would put total compensation back in line with productivity."

First: Not everyone has benefits.

Second: I can't tell from the numbers you're giving me that that this would "put total compensation back in line with productivity", maybe you could jot down the math and show me?

Third: Why not go all the way? Zero take-home pay, but your company covers your food, housing, entertainment. This is an appeal to company-store Capitalism.

Quote :

"What assets? Last I read, the company is millions underfunded in the pension department and has something like $1 billion in assets to cover > $800 million in debt. "

Bankruptcy has a nice way of protecting assets in one department from debts in the other. They will still be able to sell the assets. I'd also remind you also that Hostess shorted the workers of about $160 million in pension payments while they were tripling their own salary months ahead of the bankruptcy filings. In other words, they started liquidating long before bankruptcy, and they started with the livelihoods of the workers.

11/19/2012 1:35:11 PM

I'm not clear how whether or not it includes benefits explains away that gap?

If it does then that means that people are still taking home less and less because their benefits are being cut, if it doesn't it still means people are taking home less.

The only way his "point" makes sense is if benefits are something that came into existence around the 70's

[Edited on November 19, 2012 at 1:46 PM. Reason : .]

11/19/2012 1:44:39 PM

Quote :

"First: Not everyone has benefits. "

And? Not every worker is generating ~2x the productivity of an equivalent worker from the 1960's either.

Quote :

"Second: I can't tell from the numbers you're giving me that that this would "put total compensation back in line with productivity", maybe you could jot down the math and show me?"

Oh for crying out loud. You really want to quibble over < $200 here? Fine let's quibble. $612 in wages, let's split the difference and call it $350 in health insurance. Now let's tack on the $50 for dental/vision that I didn't include. Our health plan actually has a $5,000 deductible, but the company pays the first $2500 because it's cheaper for the company to buy a high deductible plan and self insure the deductible, so if you use it, there's $208 / month. So, we're up to $1220 in compensation just on the health benefits my small company provides. At my previous job with one of these big evil 1% companies, I also had long term and short term disability, life insurance, public transport vouchers, fitness vouchers, stock purchase plans, 401k match, a health plan that cost ~$600 per person and ~$4000 / year tuition assistance. So yes, I do think that if we included benefits, that total compensation for workers might just fall in line with productivity.

Quote :

"Third: Why not go all the way? Zero take-home pay, but your company covers your food, housing, entertainment. This is an appeal to company-store Capitalism."

Hey, don't give me this bullshit. I don't like the way that we incentivize businesses to buy benefits rather than pay their employees the money directly. But that doesn't change the fact that people are still compensated better than simply looking at their raw take home pay would suggest.

Quote :

" I'd also remind you also that Hostess shorted the workers of about $160 million in pension payments while they were tripling their own salary months ahead of the bankruptcy filings."

Ah yes, the $2.5 million CEO salary thing. Don't get me wrong, dick move, but let's do some math here. The CEO supposedly went from 750k to 2.5 million, so an increase of $1.75m, which would have worked out to $97.2 / year / employee now out of work, or roughly 8 hours of work for the above ex-hostess employee at the reduced wage. So dick move or not, the CEO's grand raise isn't what sunk the company.

Quote :

"If it does then that means that people are still taking home less and less because their benefits are being cut, if it doesn't it still means people are taking home less. The only way his "point" makes sense is if benefits are something that came into existence around the 70's "

Or if the and cost of amount of benefits paid have increased.

[Edited on November 19, 2012 at 2:20 PM. Reason : fdj]

11/19/2012 2:14:01 PM

well the Employer Costs for Employee Compensation includes benefits, so look that up per year

11/19/2012 2:30:35 PM

Well, assuming just private industry and without any further info as to how the chart's previous numbers are calculated in Dec 2008, compensation was $27.35 / hour or $1094 / week (assuming 40 hour work week). Although there must be some difference between the numbers I'm using and the chart author's numbers as the wage figure given by the BLS of $19.37 / hour leads to a weekly compensation of 774.80 / week, not $612.

http://www.bls.gov/news.release/archives/ecec_03122009.htm

So yeah, I'd say factoring in benefits brings those numbers back in line. At the worst, it's short about $100, it's certainly not a ~$600 discrepancy.

Incidentally, just realised in my previous post I was mixing weekly compensation numbers with monthly numbers, my bad. BLS numbers make my argument better anyway.

[Edited on November 19, 2012 at 4:30 PM. Reason : asf]

11/19/2012 4:25:00 PM

I am curious as to the legality of one of the "bargaining parties" literally and knowingly trying to kill the other party through negotiations. If the union was actually trying to bankrupt the company and force a liquidation, well... That just doesn't seem right. Something about "bad faith" seems to come to mind...

but naaah, unions would NEVER do anything wrong

11/21/2012 12:20:46 AM

^^chart that over the same time period, the trend doesn't change

11/21/2012 6:56:35 AM

^^ lol

The unions have FAR more of an interest in the company staying alive than the executives on the other side.

If the company goes under, the 18000 employees are left poor and jobless.

While the executives walk away with millions.

I don't see how you think the unions were acting in bad faith by secretly wanting to force a shutdown, but ignore the fact that shutting down leaves 18000 people that largely already only make between $10-15/hour without jobs.

11/21/2012 11:10:05 AM

The American CEO makes millions when they succeed, they make millions if they get fired, they also make millions when they fail and the companies go bankrupt.

The stockholders and employees get screwed when the companies fail.

What if CEO's only got paid in stocks and dividends that they could not sell until after leaving? Stock goes to zero? so does your net worth.

11/26/2012 11:20:44 PM

It's not a horrible idea, and it's clearly part of the reason why executive compensation often includes stock and stock options. The problem is doing it right so as to attract good executives. As a simple example, when would you mark the cutoff? Obviously, the day after the CEO leaves doesn't solve the short term pump and dump problem. But at the same time, I doubt many executives would agree on a majority of their pay being contingent on what their successors do in a year or two either.

And I also imagine that were such compensation schemes commonly in place, it might even make situations like hostess (where the company has been failing for 10 years) even worse for the workers, as no distressed capital company is likely to find a replacement CEO willing to stake the next year or two of their earnings on whether or not the sinking ship can be righted. So for many companies, you'd likely see a much sooner liquidation. Though arguably that would just mean a faster reallocation of those resources to something someone actually wants to buy. Alternatively, you'd see CEOs taking over distressed corporations that are paid primarily by the capital company, thereby having even less loyalty to sinking ship in question.

11/27/2012 12:21:22 AM