Posted on 11/25/2012 7:35:33 AM PST by SeekAndFind
Let's get a few things clear. Hostess didn't fail for any of the reasons you've been fed. It didn't fail because Americans demanded more healthful food than its Twinkies and Ho-Hos snack cakes. It didn't fail because its unions wanted it to die.
It failed because the people that ran it had no idea what they were doing. Every other excuse is just an attempt by the guilty to blame someone else.
Take the notion that Hostess was out of step with America's healthful-food craze. You'd almost think that Hostess failed because it didn't convert its product line into one based on green vegetables. Yet you only have to amble down the cookie aisle at your supermarket or stroll past the Cinnabon kiosk at the airport to know that there are still handsome profits to be made from the sale of highly refined sugary garbage.
It's true that the company had done almost nothing in the last 10 years to modernize or expand its offerings. But as any of the millions of Americans who have succumbed to Twinkie cravings can attest, there has always been something about their greasy denseness and peculiar aftertaste that place them high among the ranks of foodstuffs that can be perfectly satisfying without actually being any good.
Hostess management's efforts to blame union intransigence for the company's collapse persisted right through to the Thanksgiving eve press release announcing Hostess' liquidation, when it cited a nationwide strike by bakery workers that "crippled its operations."
That overlooks the years of union givebacks and management bad faith. Example: Just before declaring bankruptcy for the second time in eight years Jan. 11, Hostess trebled the compensation of then-Chief Executive Brian Driscoll and raised other executives' pay up to twofold.
(Excerpt) Read more at latimes.com ...
Hostess went bankrupt owing nearly 1 Billion in benefits to retired union workers. It was by far its largest obligation, but according to the union shill who wrote the article, unions had nothing to do with it.
I'm sure it's a hard job. Waaaaa. The fact is the sum total of the decisions management made in the past 20 years is that the company died.
That will be George Bush’s fault, of course. (Everything is, after all)
YOU read the LASlimes for...’what reason?’
Zero Hedge reported that the PE firm was run by a big dem contributor. And Dick Gephart was part of it too.
“But management AGREED to every one of those ridiculous conditions. They’ve got to take some responsibility for that.”
Unions are legalized extortion. The union bosses walk into a business and say, “hey you got a nice factory here, it would be a shame if something happened to it. Give the workers 10% more pay and you can stay in business for a couple years.”
Think of it this way, a business hires a worker at age 20, he works for 30 years and retires. You pay him 50% of his highest wage for life + health coverage for the family. You have to hire a replacement. You pay his salary until he retires 30 years later. Now you are paying his retirement and the pension from the guy he replaced. Now you have to hire a replacement. One job, 3 salaries, and dont forget the union is demanding a 5% increase in salary each year for less work.
Liberals in their obama mindset totally confuse private business with government.
The business makes a product, provides jobs, and markets their product to make a profit.
If the product is well made, popular, and safe, the public buys it. If all that is in place, there is no need to “modernize”.
“Modernization” these days usually means more automation, which means fewer jobs as robotics take over the mundane and repetitive jobs that the business USED to pay a human to do.
It it ain’t broke...don’t fix it.
If a company is losing money, the top management should be demanding cuts in workers salaries and benefits and not giving themselves bonuses and salary increases. This is why we have class warfare in the US. This has been going on for decades and it finally took a financial implosion (caused by Wall Street bankers and CEO’s) to have this issue erupt into the open. Dems understand this and will exploit this issue. The GOP does not even have a clue and continue to faithfully back corporate CEO’s motives in everything they do. The anger at the 1 percent is similar to the middle class backlash against the welfare class during the 1970’s.
“Yes - like GM ...”
If you ran an institutional investment fund, is there any way you would buy GM’s bonds in the future? I don’t see how anyone would loan them money after the way bondholders were treated by Obama and his Chicago friends. GM is hopelessly tethered to the Fed. Gov’t mob now that they were bailed out by the mob.
they were able to keep the shelves stocked, at every store i knew that carried them. perhaps they maintained their existing equipment.
A curious question for our FR legal experts. Why is the Hostess bankruptcy(which is a Mid-western company) going through a US Bankruptcy Court located in White Plains, NY? Are there no bankruptcy courts in Kansas or Missouri?
I grew up in a union family. I also have had to make a payroll. It’s never black and white. It’s management and labor and government and customers and competitors and..... I had more inspections by government agencies when I ran a business than I ever had in the military. Those inspections cost money. My employees had to stop working to talk to the government inspectors and show them around. I remember the Federal Wage and Labor lady telling me that the government didn’t care if employees had benefits. The government wanted more (low paying no benefits) jobs. That was how they were measured. Part of my education was to see how an oil refinery operated. I went out to view a repair. One man was working and three were sleeping. Each man had a specialty. One was a pipe fitter, another worked with insulation, etc...It took four people to do one man’s job. Unions quadruple your labor costs. Later, I talked to the head of Human Resources. He told me that they automated wherever possible because they didn’t want more union employees. He had me look at a list of employees. The number of people with the same last names was astounding. The union controlled who was hired for labor at the refinery. It was a good old boys club. My Dad’s mill went under a couple of years ago. The number of private sector union jobs in my state is probably 15% of what it was in the 60s. I tried to be fair as a manager. I had a catered breakfast once a month where the employees could see our books and ask questions. One of the dumbest things I ever did. Here’s what the questions became.
“You spent $30,000 on advertising last month. If you would give that money to the employees, we would work harder.”
“You spent $50,000 last month on vehicle maintenance. If you would give that money to the employees, we would work harder.”
Every expenditure that wasn’t related to employee pay and benefits was questioned every month as to why that money couldn’t go to the employees. To them, we weren’t a business, we were employment for people.
Bump
Probably because Hostess is mostly owned by Ripplewood Holdings of NYC.
Yeah, damn those capitalists!
Yeah, yeah... unions are virtuous, management sucks.
- - -
I have no problems with collective bargaining in the private sector. The marketplace may or may not lose its Twinkies, but at least we’re not paying for union demands with our tax dollars.
At the same time, the company was demanding lower wages from workers and stiffing employee pension funds of $8 million a month in payment obligations.
That Hostess executive pay tripling has been debunked in the Huffington Post, of all places. The rest of this article is similarly suspect.
“This is why we have class warfare in the US...Dems understand this and will exploit this issue.”
That is true. If one cannot reasonably explain to others why one needs a salary as high as some of these people, then you’re setting stage for envy, class warfare, and maybe real warfare.
What I just wrote sounds Socialist...and maybe so, but it is also true - and it is destroying the Republican Party. It’s one thing to keep up with the Jones’s in an upper middle class area. Where I live in Texas, maybe $200k can buy a family a really nice lifestyle. In the Northeast and California (for obvious reasons), maybe $300k. If you have 3 kids and want to put them in private schools and then private colleges, then figure $350k in Texas and $500k in the Northeast and CA. Unless other expenses, such as liability (or malpractice) insurance, exist, then money beyond those numbers is for nothing but luxury and showing off. That’s all fine - but when things get tough, as with Hostess, don’t expect to get much sympathy from the workers - union or not.
In a perfect world, perhaps. But this isn’t it, so your point is invalid since the executive compensation changes had basically no effect on this outocome.
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