Hostess Plans to Liquidate After Mediation Fails

Wall Street Journal ^ | 11/20/12 | JULIE JARGON And RACHEL FEINTZEIG

[Windflier]

Thanks for the inside data, Kara.

[Delta 21]

Making the Twinkies that Americans wont make.

Just my Coke in the bottle Hecho in Mexico.

[panaxanax]

“If you do the math, the driver is making around $125,000 a year. wonder why they went broke?”

My son was top driver in his area and had to take $150.00 per week cut to keep his job. His retail sales exceeded over a half-million $$ a year for Hostess.

The drivers bust their asses for that money. It’s NOT the drivers fault Hostess bit the big one, it’s the Bakers Union.

[Windflier]

Don’t have to deal with unions. Use existing facilities in right to work states. Run the place with temps if you wish. Unions are screwing things up worse than illegals

Agreed to all, but as Kara said upthread, Bimbo already owns bakeries in the US, and will likely pick up Hostess' factories as part of the deal. Seems they know what they're doing, as regards the unions.

Little tip. Use quotation marks around comments you paste into your posts, otherwise no one knows it's not you speaking. Better yet, use HTML to put them in italics.

[Windflier]

Glad you’re on our team now. :)

Well, when I said that I was a teamster "long ago", I wasn't kidding. The union busted up my shop in 1979, and put me and several hundred other people out of the best jobs we'd ever had.

It took me more than a decade after that to finally start voting Republican, but that only happened because I finally came home to the core values I was raised with.

What can I say - I was mugged by reality.

[kara37]

Thanks for the inside data, Kara.
*********************************

No Problem. That’s what so great about this site. You can always find someone that knows something about everything.

[mcmuffin]

[DUMBGRUNT]

Google lists many Twinkie recipes!

http://leitesculinaria.com/71100/recipes-homemade-twinkies.html

[Jane Long]

will have to try coming up with a twinkie recipe

Here you go...

You will need a spice bottle, approximately the size of a Twinkie, ten 12 x 14 inch pieces of aluminum foil, a cake decorator or pastry bag.

Cake
Nonstick Spray
4 egg whites
one 16 ounce box golden pound cake mix
2/3 cup water

Filling
2 teaspoons very hot water
1/4 teaspoons salt
2 cups marshmallow creme (one 7 ounce jar)
1/2 cup shortening 1/3 cup powdered sugar
1/2 teaspoon vanilla

Instructions
1. Preheat oven to 325 degrees F.
2. Fold each piece of aluminum foil in half twice. Wrap the folded foil around the spice bottle to create a mold. Leave the top of the mold open for pouring in the batter. Make ten of these molds and arrange them on a cookie sheet or in a shallow pan. Grease the inside of each mold with a light coating of nonstick spray.
3. Disregard the directions on the box of cake mix. Instead, beat the egg whites until stiff. In a separate bowl combine cake mix with water, and beat until thoroughly blended (about 2 minutes). Fold egg whites into the cake batter and slowly combine until completely mixed.
4. Pour the batter into the molds, filling each one about 3/4 of an inch. Bake in the preheated oven for 30 minutes, or until the cake is golden brown and a toothpick stuck in the center comes out clean.
5. For the filling, combine the salt with the hot water in a small bowl and stir until salt is dissolved. Let this mixture cool.
6. Combine the marshmallow creme, shortening, powdered sugar, and vanilla in a medium bowl and mix well with an electric mixer on high speed until fluffy.
7. Add the salt solution to the filling mixture and combine.
8. When the cakes are done and cooled, use a skewer or chopstick to make three holes in the bottom of each one. Move the stick around inside of each cake to create space for the filling.
9. Using a cake decorator or pastry bag, inject each cake with filling through all three holes.

  Makes 10.

Good Luck!!

[eyedigress]

Whatever. I haven’t had a twinkie in 30 years and could care less. Obamanation wins again. Idiots

[Windflier]

That’s what so great about this site. You can always find someone that knows something about everything.

You're telling me... I started lurking here around 2004, and signed up in 2007, and still am constantly amazed by the depth and breadth of the Freeper knowledge base.

[livius]

Interesting. Pan Bimbo owns a lot of things here and most people don’t even know it.

Conditions may have been bad, but the problem is that the strikers didn’t seem to be striking over conditions (more AC in the bakery, for example) but to maintain bizarre job restrictions. For example, Wonderbread trucks couldn’t be loaded by Hostess employees or carry Hostess products, etc., even though they were the same company.

As for heat, I have worked in restaurants and bakeries, and the fact of life is simply that they are very hot. There’s no way of controlling this, because if you cool a restaurant kitchen down, you’ll cool the food so much that the customers won’t like it, and in a bakery, you won’t have the right conditions for baking.

As they say, if you can’t take the heat...

[M-cubed]

Maybe some of the “illegals” will move back to Mexico.....and do those jobs that Americans wont do!

[kara37]

Conditions may have been bad, but the problem is that the strikers didn’t seem to be striking over conditions (more AC in the bakery, for example) but to maintain bizarre job restrictions. For example, Wonderbread trucks couldn’t be loaded by Hostess employees or carry Hostess products, etc., even though they were the same company.

***********************************************

I agree, I don't think that most bakeries have AC. That's why most bakeries are run at night, depending on the area of the country. The ones that work in the bakery really don't seem to mind the heat that much. I guess they are use to it.

Don't get me wrong, I am not defending the bakers union. I think they got exactly what they deserved, but at the expense of a lot of people. There are a lot of good people in our company, even the ones in the bakers union, that don't sound like a lot of the idiots I saw on TV.

In fact, that goes for a lot of Hostess employees too. I saw the Hostess bread guy and the Hostess cake guy everyday. We delivered to most of the same stores at the same time.
The Hostess cake rep use to give me Ring Dings several times a week for my kids. The cake routes were independently owned, so he literally lost his business. The Hostess bread rep was one of my favorite people(very conservative) that made me laugh everyday. I feel sad for them and will miss them both.

[CutePuppy]

Equipment, management, and distribution system goes to Mexico...union keeps foaming in U.S.

Bimbo (the largest Mexican confection conglomerate) already owns Sara Lee and several other smaller U.S. brands, so it's unlikely that they will pass anti-trust requirements for the brands deal. There are several PE firms and other bakeries that could buy the brands and have expressed interest in them. They are not likely to utilize the "friendly" services of the BCTWGMIU - Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

Here is the truly delicious part of this liquidation that many liberals don't get when they blame it on "evil capitalists" aka "Bained", as even NYT had to point out - the PE firm Ripplewood Holdings, which bought Interstate Bakery / Hostess from bankruptcy in 2009, is run by a long-time big Democrat donor, Timothy C. Collins:

From Private Equity And Hostess Stumbling Together - NYT, Dealbook, by Andrew Ross Sorkin, 2012 November 19

< snip > ..... >Ripplewood>, which was founded by Timothy C. Collins, a major Democratic donor, is expected to lose most, if not all, of the $130 million or so it invested in Hostess. The company's lenders, led by Silver Point Capital and Monarch Alternative Capital, are not expected to fare well either.

The behind-the-scenes tale of Hostess and Ripplewood may be the opposite of a project to buy it, strip it and flip it. When Mr. Collins originally looked at Hostess, he was trying to make investments in troubled companies with union workers. He was convinced that he could work with labor organizations to turn around iconic American businesses, and he hoped Hostess would become a model for similar deals.

Early on, Mr. Collins sought out Richard A. Gephardt, the former House majority leader, who had become a consultant on labor issues, to help Ripplewood acquire Hostess and work with its unions. Mr. Collins had previously been a donor to Mr. Gephardt's election campaigns ..... < snip >

..... It was Mr. Collins's relationship with Mr. Gephardt - a Democrat and longtime friend of labor - that helped make the deal happen in the first place.

While Ripplewood sought significant concessions from the unions in 2009, some insiders and outside analysts privately suggested that Ripplewood did not fight hard enough for even greater givebacks from the unions in the bankruptcy process - savings worth $110 million - perhaps as a function of Mr. Collins's relationship with Mr. Gephardt. ..... < snip >

..... Worse still, Mr. Gephardt's son was added to the board of Hostess and paid an annual fee of $100,000. ..... < snip > ..... Hostess's employees are likely to lose their jobs soon. And either way, Ripplewood isn't going to walk away with millions of dollars. So much for being Bained.

Here is what's really happened and the reality of what's involved when working with unions (something the big donor to Dick Gephardt thought he could overcome and create another "bailout" as a "model for working with labor organizations"):

From The Twinkie, a Suicide - WSJ (sub), Editorial, 2012 November 16

< snip > ..... Hostess's owners have decided to liquidate rather than ride out a nationwide strike by one of the largest of its dozen unions, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union. The Texas-based company owned by the private-equity shop Ripplewood Holdings and other hedge funds essentially gave up. On Friday it shut down its 33 bakeries and 565 distribution centers and prepared to fire nearly 18,500 employees en masse and auction off its brand and recipe portfolio. ..... < snip >

..... One reason is a labor-rule burden that by comparison makes Detroit look like Hong Kong.

The snack giant endured $52 million in workers' comp claims in 2011, according to its bankruptcy filing this January. Hostess's 372 collective-bargaining agreements required the company to maintain 80 different health and benefit plans, 40 pension plans and mandated a $31 million increase in wages and health care and other benefits for 2012.

Union work rules usually required cake and bread products to be delivered to a single retail location using two separate trucks. Drivers weren't allowed to load their own vehicles, and the workers who loaded bread weren't allowed to load cake. On most delivery routes, another "pull up" employee moved products from back rooms to shelves. ..... < snip >

The economically illiterate union idiots believed the president of the AFL-CIO Richard Trumka, when he said: "What's happening with Hostess Brands is a microcosm of what's wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor."

The truth is, there is overcapacity at the baked goods and confections companies, Hostess was losing shelf space at major customers like Costco, and nobody needs the overhead of the bakers union. BTW, the Teamsters Union had made a deal and ratified the contract with Hostess earlier in the year, and many Teamster drivers have crossed the Bakers Union picket lines in the latest strike, but Bakers Union leadership kept telling their workers to vote for a strike because "the management is bluffing" and union bosses spread the rumors that there was a plan by one or several companies to buy Hostess as a company and everything would go back to "normal." In light of Gephardt's involvement with the company it may have sounded believable to them.

The Hostess' union workers have not been "Bained," they have been Ho-Hos'ed and "organized" and now they can go and "labor" themselves.

[JCBreckenridge]

Well, I had to go to university to be a conservative. I like to blame a very close friend of mine for opening my eyes. :)

Never worked in a union though.

[livius]

It’s very sad for these people. I don’t think they had much choice about being in the union, and now they’re suffering for the union leaders’
stupidity.

[beebuster2000]

i read that it isnt just the dollars the drivers got paid but the work rules requiring two or more drivers to do the work of one. apparantly each product needs its own driver and unloader at the retail site.

clearly its the union, and in this case the teamsters. apparantly the actual manufacturing cost wasnt out of line, and therefore concessions by the millers union wasnt gong to fix it. problem was work rules of the teamsters. good article on that here:

http://professional.wsj.com/article/SB10001424127887324352004578130912150512612.html?mod=WSJ_Opinion_LEADTop&mg=reno-wsj

[panaxanax]

The drivers work on commission. My son has worked his route for 20 years alone except when training a new driver. He did say that bread and cakes could not be on the same truck, which is criminally stupid, IMO.

[beebuster2000]

they work on commission? so they get paid a percent of what they deliver, meaning what the store is buying? do they stock the shelves as well?