[RoosterRedux]

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

Feast on the shiite, unions. That's the only cream filled center you will get.

[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.