Skip to comments.Qeestions about the Hostess Debacle
Posted on 11/18/2012 7:12:53 PM PST by Explodo
So I'm getting the business from the local lefties here in Minnesota on the Hostess thing.
They Keep bringing up how some of the Hostess Exec's received a 300% raise while the company was in trouble and negotiating with the union. Somehow this alleged fact removes all resonsibility from the union.
I've been trying to research this and all I've found on the web are links to the uber-leftie sites who use this to justify union actions
Question 1:, Is this factoid true? (Execs gave themselves a huge Raise
Question 2: If true, why did the execs do this?
Question 3: If it's not true, how can we kill this meme that execs killed the company not the union
Thanks for comments in advance, appreciate your time
“Question 3: If it’s not true, how can we kill this meme that execs killed the company not the union”
Think about it... Why would an exec raise their salery to the point of bankrupting the company and killing the goose that laid the golden egg?
It was a privately held company if they wanted to pay themselves that money it was their right to do so.Who told the workers that they were entitled to what the owner had built?
If it sounds like a union thug talking point....
Besides, who could blame the execs for wanting more money when they have to deal with the union?
If the company was operating under bankruptcy protection, would the brankruptcy judge approve such an increase?
Wonder if the management group was a bunch of LEfties....I seem to remember reading something about the group that took hostess out of trouble the first time were far left Dems.
and why drivers wouldnt load their own trucks and or why workers who loaded bread are not allowed to load cake???
it's called feather bedding...
It sounds like the Hostess execs wanted to squeeze all the money they could out of the company before they filed for bankruptcy.
What business is it of the Unions ,how much money Executives make?
These lefties aren’t too concerned about the exploding pensions in the public sector management, like professors,etc?
These are all good responses, but in the new post-American world we have to avoid bourgeois constructs like math and ask, “Why didn’t Obama save Hostess!”. Obama lied, Twinkies died!
Don't know about far left, but it is a curious thing, especially after the Dems bashing venture capitalists such as Bain/Romney... See here:
Beat me by 17 seconds;-)
you are on the wrong board....perhaps you should head over to Du where they would appreciate your dumb comment
CORRECTION: An earlier version of as well as an earlier headline of this post incorrectly stated that Greg Rayburn received a 300 percent raise as CEO of Hostess as the company approached bankruptcy. Rayburn wasn't CEO of Hostess until after the company filed for bankruptcy. The post also incorrectly stated that he was paid a salary of up to $2,550,000 per year. His salary when he joined the company was $100,000 per month, according to a company spokesman.
“What business is it of the Unions ,how much money Executives make?”
I think that depends on how much the workers are making.
I personally would not like it if I were taking an 8% pay cut and a suspension of pension bennies as well as a cut in health insurance and the CEO got 1 300% raise.
I guess Kenneth Lay was worth every penny huh?
“It sounds like the Hostess execs wanted to squeeze all the money they could out of the company before they filed for bankruptcy.”
It was their company... they could have as easily just shut it down - but they gave the unions a choice.
I wouldn’t be surprised when someone else buys the brands - it won’t be a union shop any mo.....
There was a documentary called “Who Killed the Electric Car?” Now we should have one called “Who Killed the Twinkie?”
Jon Corzine should buy Hostess out of bankruptcy. He’s wonderful at managing money. And he has $1.6B hidden somewhere that he can invest into the company.
Well. I don’t think the pay of the CEO or a few executives is going to bankrupt the company, why would shareholders allow that? It doesn’t really make much sense.
A Labor Victory Over Hostess (satire)
Tell them unions lie. Tell them the Teamsters accepted the contract after examining the company’s books.
Tell them to give you proof to support their claim about executive pay because the Teamsters did not see fit to kill the company and all those jobs. Otherwise, it is a bakers’ union lie designed to cover up a major failure that lost 18,000 innocent people their jobs.
Except he is right.
But blame is properly shared all around.
Best response I’ve seen so far, and be sure to mention that the Huff Post retracted the ‘tripled salary’ lie.
No he isn’t. That is just more baseless ‘beat up on capitalism’ demagoguery.
Wow! Thanks for that link.
unless it can be shown that any “bonuses” were contractual, based on longevity or something like that -— what you assume happened would be criminal fraud -— you cant suck money out in anticipation of bankruptcy and get away with it.
Here’s a fairly in-depth article giving background from earlier this year:
The important thing to remind anyone about this is that the offer given to the baker’s union wasn’t made by management, but by the BK court. The company has been in BK since early this year. Management’s hands aren’t free to do whatever they want - the court (or their appointed administrator for the DIP) is running the show.
He is not correct. He basically has stated that the republicans are guaranteed to sell out everyone to the dims.....now if you really believe that then what I say is you probably ought to frequent Alex Jones’ boards.
Well excuse me, princess. What does it sound like to you?
The real losers in this are the kids who didn’t want to go to college and now have lost the opportunity to apply in the future for these good jobs. The present continues to eat the future.
Sorry I am not as cynical as some of the diehards around here. Not all republicans are out to destroy the nation hand in hand with the dims. You can’t possibly believe that John Kasich is a sell out....but then again maybe you can. Tell me that people like Jim DeMint and Allen West are sell outs....adn I still won’t believe you.
so be as cynical as you want I am not getting on that trolly
Even as it played the numbers game, Hostess had to face chaos in the corner office at the worst possible time. Driscoll, the CEO, departed suddenly and without explanation in March. It may have been that the Teamsters no longer felt it could trust him. In early February, Hostess had asked the bankruptcy judge to approve a sweet new employment deal for Driscoll. Its terms guaranteed him a base annual salary of $1.5 million, plus cash incentives and long-term incentive compensation of up to $2 million. If Hostess liquidated or Driscoll were fired without cause, hed still get severance pay of $1.95 million as long as he honored a noncompete agreement. When the Teamsters saw the court motion, Ken Hall, the unions secretary-treasurer and No. 2 man, was irate. So much, he thought, for what he described as Driscolls happy talk about shared sacrifice. Hall says he tracked Driscoll down by phone and told him, If you dont withdraw this motion, these negotiations are done. Hostess withdrew the motion a few weeks later when Driscoll left the same Driscoll who, Hostess told the court in its motion, was key to reestablishing Hostesss competitive position going forward. Abbott and Costello couldnt have made this stuff up if theyd gone to Wharton. The board replaced Driscoll with Greg Rayburn, a restructuring expert Hostess had hired as a consultant only nine days earlier. Rayburn was a serial turnaround specialist who had worked with such high-profile distressed businesses as WorldCom, Muzak Holdings, and New York City Off-Track Betting. He became Hostesss sixth CEO in a decade. Within a month of taking over, Rayburn had to preside over a public-relations fiasco. Some unsecured creditors had informed the court that last summer as the company was crumbling four top Hostess executives received raises of up to 80%. (Driscoll had also received a pay raise back then.) The Teamsters saw this as more management shenanigans. Looting is how Hall described it in TV interviews. Dick Gephardt, former House majority leader and current CEO , Gephardt Group Dick Gephardt, former House majority leader and current CEO , Gephardt Group Rayburn announced that the pay of the four top executives would go down to $1 for the year, but that their full salaries would be reinstated no later than Jan. 1. Hostess pays Rayburn $125,000 a month, according to court filings. At the same time Rayburn became CEO, Gephardts son Matthew, 41, the COO of the Gephardt Group, was put on the Hostess board as a $100,000-a-year independent director.
The people who put money into the company to keep it afloat were probably Management. To bring the Bakers Union on board they gave them 25% equity and a seat on the Board. They may have then voted themselves a raise in return for dilution of equity to recover what they lost there.
Check the schedule 10-K/SEC filings. Public Corporations have to list the compensation of the top Executives. This inoformation is on line.
You should be able to look at the last several years to see how much their salaries have increased.
as if millions of voices suddenly cried out in terror and were suddenly silenced
I fear something terrible has happened
From what I understand, this all has to do with transportation. They have two different unions...one for bread and one for sweets. What the company wanted to do was to be able to transport BOTH at one time....currently or before they closed, the bread could not be transported with the sweets and vice versa....isn’t that the craziest? The question I have is, why would the unions want this end? They are out of money now too aren’t they? All those employers are out of work and can’t pay their union monthly fees. It seems like there are zero winners in this mess.
The union mgmt guys sure don’t miss a paycheck!
The leadership is Marxist.
My uncle in England was a labor leader. He sent his kids to Polish Young Pioneer camps for their summer vacation, back in the '70s.
AND WHY NOT TURN THE SEARCH LIGHT upon the Union Bosses and see how much THEY made, this would be enlightening.
Twinkie was guilty of MURDER in California. They accused a wrongful death to the fact the guy ate Twinkies.. Maybe this is the Long Arm of Justice that at last has stuck down A MURDERER.
If you were a senior officer of a company and you concluded that it was failing would you stay or would you look for a more secure position elsewhere?
If your instinct would be to leave, might you be incented to stay with a better compensation package?
Senior management were not slaves and they would not be taken out back and shot for desertion if they resigned. In fact, after driscoll’s raise was denied he did resign and the company lost its key player according to what I read above.
You are writing the way a communist would and fostering class envy. You should not come here to beat down American capitalistic free enterprise.
Hostess was owned and run by Democrats.