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torchbearer
11-20-2012, 07:07 PM
http://dealbook.nytimes.com/2012/11/20/hostess-brands-says-it-fails-to-reach-labor-deal-in-mediation/


Hostess Brands announced on Tuesday night that despite the help of a mediator, it had failed to reach a new labor agreement with the bakery workers union – and union officials said the company had indicated it would proceed with plans to liquidate.
“It’s over,” said David Durkee, secretary-treasurer of the Bakery, Confectionery, Tobacco Workers and Grain Millers Union.
Hostess, an 82-year-old company, said that it would have no further comment until a hearing scheduled for 11 a.m. Wednesday before Judge Robert D. Drain of the Federal Bankruptcy Court for the Southern District of New York. At a hearing on Monday, Judge Drain, eager to save the 18,500 jobs at Hostess, pressed the two sides to meet with a mediator, hoping the long-feuding company and union could narrow their differences.

Tuesday’s announcement came four days after Hostess – producer of such famed brands as Twinkies and Wonder Bread — announced that it would wind down its operations, a move precipitated by a bakery workers’ strike that began on Nov. 9 at two-thirds of the company’s 33 bakeries.
Ever since Hostess filed for bankruptcy last January, it has insisted that its labor costs were unsustainable and that it needed to cut its wage, health and pension costs to continue operating. But the bakery workers’ union balked, asserting that Hostess was badly mismanaged and that the company would likely face liquidation again in a year or two even if the union were to agree to a new round of cost-cutting concessions.

Zippyjuan
11-20-2012, 08:02 PM
They weren't going to reach an agreement. They had already decided to liquidate and only met because the judge ordered it. For there to have been an agreement to be reached, both need to have wanted to reach one.

torchbearer
11-20-2012, 08:04 PM
They weren't going to reach an agreement. They had already decided to liquidate and only met because the judge ordered it. For there to have been an agreement to be reached, both need to have wanted to reach one.

right, i recall reading that the judge ordered the sit down because it wouldn't be prudent to precede without doing that first.
not sure why the media put spin on that story.

BAllen
11-20-2012, 08:04 PM
So, when does the gubmint bail them out? Someone needs to remind them that it is too big to fail.

ghengis86
11-20-2012, 08:05 PM
http://www.zerohedge.com/news/2012-11-20/hostess-mediation-fails-liquidation-proceed-furious-former-workers-now-turn-labor-un

Last week, when discussing the next steps for the company, and specifically the hope that mediation may resolve the epic animosity between management and workers, we stated that "What makes a mediation improbable is that the antagonism between the feuding sides has certainly hit a level of no return: "Several unions also objected to the company's plans, saying they made "a mockery" of laws protecting collective bargaining agreements in bankruptcy. The Teamsters, which represents 7,900 Hostess workers, said the company's plan would improperly cut the ability of remaining workers to use sick days and vacation." Sure enough, moments ago we learned that mediation has now failed and the liquidation may proceed. And since in America nobody understands that proper sequence of events involved in a bankruptcy liquidation, where the valuable parts always end up being acquired by someone, in this case the Twinkie brand and recipe, let the pointless Ebay bidding wars over twinkies continue. As for what really happens next, if indeed Bimbo is prohibited from acquiring the assets in the Stalking Horse auction due to anti-trust limitations, then the buyer will almost certainly be a "financial", i.e., another PE firm, whose coming means the end of any hopes and dreams of preserving union status at fresh start Hostess, or whatever the new firm will be named.

From the WSJ:


Hostess Brands Inc. said Tuesday night it would proceed with liquidation plans after mediation fails.

Earlier Tuesday, the head of the bakers union whose strike precipitated Hostess liquidation plans didn't attend a last-ditch mediation session and wasn't hopeful about its prospects, he said.

"I'm not too optimistic about this mediation," Frank Hurt, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, said when reached earlier Tuesday afternoon in Columbus, Ohio. He said he couldn't get to New York, where the session was taking place; instead, he said, the union's secretary-treasurer was attending.



The mediation came at a judge's suggestion after the Twinkie maker said Friday that a week-long strike by the bakers left the company no choice but to seek a bankruptcy judge's approval for liquidation.



The judge, Robert Drain, urged mediation, citing among other things the hope for saving some 18,500 jobs. The company filed for bankruptcy protection for the second time in January.



The judge indicated Monday that if mediation wasn't successful, Hostess could return to court Wednesday to pursue its liquidation plan.



Doug Mansky, a Hostess driver in Detroit and a member of the International Brotherhood of Teamsters, was in the process of moving to a cheaper condominium on Tuesday, after his union had agreed to an 8% pay cut that he said would shave $200 a week from his income. After Judge Drain cleared Hostess to impose the same new labor terms on the bakers union, they went on strike.



"I hope things work out. I'm going to be 49 and trying to find a job in a market that's terrible," Mr. Mansky said.

Sadly, the reality of learning just how bad the labor market truly is, all smoke and mirrors of a recovery aside, will now have to be experienced by not only Mr. Manksy but 18,499 of his fellow co-workers, who may have been duped into hoping by their union that by holding out a hardline stance, they would gain something.

They have now lost everything. And not too unexpectedly, the workers are now turning on the Union!


[S]ome Hostess workers in another union awaiting the
mediation results criticized Mr. Hurt, the 20-year president of the
bakers union, who defended his decisions and actions during the
company's bankruptcy process.



Scott Quenneville, a Hostess truck driver represented by the Teamsters, said he feels his colleagues were misled by Mr. Hurt into believing that a buyer would swoop in for the company. Mr. Hurt on Sunday said he thought there was a good chance a buyer would emerge who would give union members their jobs back.



"Frank misled a lot of people. He was not going to settle for anything less than closing the company down, because they didn't want that 8% pay cut," said Mr. Quenneville. "If you don't want the job, leave the job. Why ruin 18,000 jobs?"



"I didn't mislead anybody on anything," Mr. Hurt said. He said he didn't tell workers preparing to strike that a buyer for Hostess was definitely waiting in the wings.



Mr. Hurt said, "I don't want anybody to think that anybody is guaranteeing anyone anything, but we did know that there were people taking a look at this company."

This would be a truly fantastic drama, if people's lives were not at stake. And no, not one former Hostess worker will retain their job at the new company: that much is certain.

As we said, if only people had a basic understanding of how bankruptcy truly worked, and what the real state of the economy was, then Hostess' workers may have had a chance and some amicable comrpomise would have been possible.

Then again, if people in America actually understood economics and simple finance, then the "Ohio outcome", and many others, would have likely been quite different.

Now we can only hope we were not correct about the ultimate outcome too: namely that the US government will effectively hijack the bankruptcy process, and in doing so "bailout" a junk food maker, just so 18k votes can be preserved at the expense of creditors and making yet another mockery of the bankruptcy process, and property rights in the US.

Then again, this is precisely what the Union was likely hoping for all along, because once the government starts bailing everyone out, just where does it draw the line?

torchbearer
11-20-2012, 08:06 PM
So, when does the gubmint bail them out? Someone needs to remind them that it is too big to fail.

if only bakers ran our government(or had a cartel that was partnered with it).

CaseyJones
11-20-2012, 08:07 PM
So, when does the gubmint bail them out? Someone needs to remind them that it is too big to fail.


http://www.youtube.com/watch?v=pzaQjS1JstY

Danke
11-20-2012, 08:14 PM
I'll bet Dollars to Donuts that the judge is corrupt.

ghengis86
11-20-2012, 08:16 PM
if only bakers ran our government(or had a cartel that was partnered with it).

oh, the stealth bailout is highly probable:
http://www.zerohedge.com/news/2012-11-19/us-tries-wrest-control-hostess-liquidation-management-seeks-pay-175-million-incentiv
But wait, it gets better: because it is quite likely that should an emboldened US Trustee get her wishes granted, will push to continue operating Hostess as a going concern, potentially with a court appointed, and US Trustee selected management team.

In essence this could result in a stealth nationalization of the junk food maker, which would preserve the jobs of the workers for the time being, but crush the balance of the capital structure, i.e., secured and unsecured creditors.

Impossible, you say? It has happened, to a big extent, before. Recall a certain bankruptcy case of one General Motors, where the claims of creditors were primed by those of the labor unions.

Granted, such a perversion of the bankruptcy process would be historic, but in a country in which everyone is to blame for everything, and in which property rights are becoming a very nebulous concept, we would certainly not be surprised if the US government ends up "bailing out" Hostess by a mandatory flipping the capital structure, over the cries of the company's creditors, further pushing the country into the twilight Banana zone.

mad cow
11-20-2012, 08:18 PM
I saw some Wonder Bread in the supermarket today.I didn't check the date.

AuH20
11-20-2012, 08:40 PM
So the workers are rebelling against their labor leaders for misleading them???? Golly golly gumgrops!! It can't be true! Labor leaders manipulating their own people??? No way!!!



[S]ome Hostess workers in another union awaiting the
mediation results criticized Mr. Hurt, the 20-year president of the
bakers union, who defended his decisions and actions during the
company's bankruptcy process.

Scott Quenneville, a Hostess truck driver represented by the Teamsters, said he feels his colleagues were misled by Mr. Hurt into believing that a buyer would swoop in for the company. Mr. Hurt on Sunday said he thought there was a good chance a buyer would emerge who would give union members their jobs back.

"Frank misled a lot of people. He was not going to settle for anything less than closing the company down, because they didn't want that 8% pay cut," said Mr. Quenneville. "If you don't want the job, leave the job. Why ruin 18,000 jobs?"

"I didn't mislead anybody on anything," Mr. Hurt said. He said he didn't tell workers preparing to strike that a buyer for Hostess was definitely waiting in the wings.

Mr. Hurt said, "I don't want anybody to think that anybody is guaranteeing anyone anything, but we did know that there were people taking a look at this company."

torchbearer
11-20-2012, 08:43 PM
whoa

torchbearer
11-20-2012, 08:43 PM
truth is coming out.

madengr
11-20-2012, 08:44 PM
Doug Mansky, a Hostess driver in Detroit and a member of the International Brotherhood of Teamsters, was in the process of moving to a cheaper condominium on Tuesday, after his union had agreed to an 8% pay cut that he said would shave $200 a week from his income. After Judge Drain cleared Hostess to impose the same new labor terms on the bakers union, they went on strike.

$200/week lost from an 8% cut? That means he was making $130k/year driving a fucking bread truck.

torchbearer
11-20-2012, 08:48 PM
$200/week lost from an 8% cut? That means he was making $130k/year driving a fucking bread truck.

shit, i'm in the wrong profession.

KingRobbStark
11-20-2012, 08:55 PM
If i was buying the company i would dissolve the union.

Kodaddy
11-20-2012, 08:57 PM
An 8% cut would mean $200 less a week????? That means he was making $2500/ week!!! That's $130,000 a year!!! I'd take a 20% cut!!! Where do I sign???

torchbearer
11-20-2012, 08:58 PM
If i was buying the company i would dissolve the union.


well, that is why the bankruptcy is bad news for the union.
if someone had bought the company prior, the buyer would have to buy the labor contracts too.
but in the bankuptcy court, those contracts are now void. people can pick and choose what assets they want to buy, and that money goes to the creditors.

aGameOfThrones
11-20-2012, 09:06 PM
Grupo Bimbo is thinking of buying them and will keep the 18k jobs in the US rather than Mexico. ;)

JK/SEA
11-20-2012, 09:08 PM
An 8% cut would mean $200 less a week????? That means he was making $2500/ week!!! That's $130,000 a year!!! I'd take a 20% cut!!! Where do I sign???

thats Teamster wages, not Bakers wages. All you need to learn is how to stack trays of product, put em on a truck with a pallet jack, and wait for the driver who has a CDL license to drive it away when the truck is full. Oh yeah, you might need training on how to use a broom. Teamsters have a more powerful union as you might imagine. Don't forget, the Teamster union has a lot more clout than the Bakers. Guess will see what happens now.

torchbearer
11-20-2012, 09:08 PM
Grupo Bimbo is thinking of buying them and will keep the 18k jobs in the US rather than Mexico. ;)

democratic anti-trust laws will prevent grupo bimbo from buy up hostess in total. they may be able to get a small piece of the assets.
they won't be able to save all those jobs... and they won't be paying someone 130k to drive a truck either.

Keith and stuff
11-20-2012, 09:11 PM
Grupo Bimbo is thinking of buying them and will keep the 18k jobs in the US rather than Mexico. ;)

That would be interesting. Since products like Twinkies and Wonder Bread have such a short shelf life, it would make sense to make some of the products in the US. However, with pay 1/4 or less in Mexico, I think a Mexican company would try to figure out a way to produce some of the products in Mexico. At least produce the products in the rural Southeast and rural Southwest where pay is lower than the rest of the US.

aGameOfThrones
11-20-2012, 09:15 PM
That would be interesting. Since products like Twinkies and Wonder Bread have such a short shelf life, it would make sense to make some of the products in the US. However, with pay 1/4 or less in Mexico, I think I Mexico company would try to figure out a way to produce some of the products in Mexico. At least produce the products in the rural Southeast and rural Southwest where pay is lower than the rest of the US.

I should have made my comment more sarcastic. I don't actually expect Grupo Bimbo to keep any US jobs.

aGameOfThrones
11-20-2012, 09:16 PM
democratic anti-trust laws will prevent grupo bimbo from buy up hostess in total. they may be able to get a small piece of the assets.
they won't be able to save all those jobs... and they won't be paying someone 130k to drive a truck either.

I read that they wanted some IPs not the whole company. About the jobs, I don't think they'll keep any.

mad cow
11-20-2012, 09:18 PM
The new owners could cut their pay 40% and have people lined up around the block to take those jobs.

Hell,I'd come out of retirement and drive a bread truck for $78,000 with no health insurance or pension.

nemt4paul
11-20-2012, 09:29 PM
Someone on a different message board posted this info. It's tough to support the board of directors giving the management team huge raises when the company obviously sucked for quite a while. It doesn't look good and it's a black eye on free market capitalism. I know the board is free to do what they want as far as administration salaries......it just reeks. I know that these salaries aren't what broke the company.....that can be set at the feet of the Unions. Thoughts?


While Hostess management wants to blame BCTGM International Union members for its demise, the truth is that had it not been for the valiant efforts of BCTGM members over the last 8 years, including accepting significant wage and benefit concessions after the first bankruptcy, this company would have gone out of business long ago.

As the company was asking for more givebacks from workers, a group of creditors said in court papers that the company “may have manipulated its executives’ salaries higher in the months leading up to its Chapter 11 filing,” again according to the WSJ. According to the creditors’ court filing, the following Hostess executives saw substantial salary increases in July 2011:

Brian Driscoll, CEO, from around $750,000 to $2,550,000
Gary Wandscheider, EVP, $500,000 to $900,000
John Stewart, EVP, $400,000 to $700,000
David Loeser, EVP, $375,000 to $656,256
Kent Magill, EVP, $375,000 to $656,256
Richard Seban, EVP, $375,00o to $656,256
John Akeson, SVP, $300,000 to $480,000
Steven Birgfeld, SVP, $240,000 to $360,000
Martha Ross, SVP, $240,000 to $360,000
Rob Kissick, SVP, $182,000 t0 $273,008


A Hostess spokesman, in reply to the creditors’ filing, responded that the executives’ salaries were increased at a routine compensation review “to align them with industry standards and because the executives were being asked to take on significant additional responsibilities associated with trying to restructure the company outside of bankruptcy proceedings.” All this while asking workers such as Mr. Peruzzi, a 47 year old father of three, who, according to the WSJ article grossed about $51,000 last year, to take further pay and benefit cuts.

torchbearer
11-20-2012, 09:38 PM
Someone on a different message board posted this info. It's tough to support the board of directors giving the management team huge raises when the company obviously sucked for quite a while. It doesn't look good and it's a black eye on free market capitalism. I know the board is free to do what they want as far as administration salaries......it just reeks. I know that these salaries aren't what broke the company.....that can be set at the feet of the Unions. Thoughts?


looks like everyone is over paid.

ghengis86
11-20-2012, 10:03 PM
Someone on a different message board posted this info. It's tough to support the board of directors giving the management team huge raises when the company obviously sucked for quite a while. It doesn't look good and it's a black eye on free market capitalism. I know the board is free to do what they want as far as administration salaries......it just reeks. I know that these salaries aren't what broke the company.....that can be set at the feet of the Unions. Thoughts?

Saw the writing in the wall and cashed out. Fuckers for sure. I can see asking them to do more as the company struggles to survive, but if your livelihood is on the line you make sacrifices. They weren't in danger of losing anything and there was only upside. Not illegal, but spineless, gutless and pitiful.

daviddee
11-20-2012, 11:40 PM
...

phill4paul
11-20-2012, 11:46 PM
So the workers are rebelling against their labor leaders for misleading them???? Golly golly gumgrops!! It can't be true! Labor leaders manipulating their own people??? No way!!!

Now do you suppose Mr. Hurt was promised "something" in exchange for fucking the workers and closing the factory. Who was he working for exactly?

HOLLYWOOD
11-20-2012, 11:59 PM
Someone on a different message board posted this info. It's tough to support the board of directors giving the management team huge raises when the company obviously sucked for quite a while. It doesn't look good and it's a black eye on free market capitalism. I know the board is free to do what they want as far as administration salaries......it just reeks. I know that these salaries aren't what broke the company.....that can be set at the feet of the Unions. Thoughts?CLICK on the link ===> http://www.hark.com/clips/mkwzrwjtfn-because-it-is-wreckable


While Hostess management wants to blame BCTGM International Union members for its demise, the truth is that had it not been for the valiant efforts of BCTGM members over the last 8 years, including accepting significant wage and benefit concessions after the first bankruptcy, this company would have gone out of business long ago.

As the company was asking for more givebacks from workers, a group of creditors said in court papers that the company “may have manipulated its executives’ salaries higher in the months leading up to its Chapter 11 filing,” again according to the WSJ. According to the creditors’ court filing, the following Hostess executives saw substantial salary increases in July 2011:

Brian Driscoll, CEO, from around $750,000 to $2,550,000
Gary Wandscheider, EVP, $500,000 to $900,000
John Stewart, EVP, $400,000 to $700,000
David Loeser, EVP, $375,000 to $656,256
Kent Magill, EVP, $375,000 to $656,256
Richard Seban, EVP, $375,00o to $656,256
John Akeson, SVP, $300,000 to $480,000
Steven Birgfeld, SVP, $240,000 to $360,000
Martha Ross, SVP, $240,000 to $360,000
Rob Kissick, SVP, $182,000 t0 $273,008


A Hostess spokesman, in reply to the creditors’ filing, responded that the executives’ salaries were increased at a routine compensation review “to align them with industry standards and because the executives were being asked to take on significant additional responsibilities associated with trying to restructure the company outside of bankruptcy proceedings.” All this while asking workers such as Mr. Peruzzi, a 47 year old father of three, who, according to the WSJ article grossed about $51,000 last year, to take further pay and benefit cuts.
(http://www.hark.com/clips/mkwzrwjtfn-because-it-is-wreckable)

angelatc
11-21-2012, 12:20 AM
Someone on a different message board posted this info. It's tough to support the board of directors giving the management team huge raises when the company obviously sucked for quite a while. It doesn't look good and it's a black eye on free market capitalism. I know the board is free to do what they want as far as administration salaries......it just reeks. I know that these salaries aren't what broke the company.....that can be set at the feet of the Unions. Thoughts?

The current CEO has only been around for 6 months. The unions are still pouting about things that happened to guys that aren't even there any more. And, as was pointed out, divided by the number of employees per year, those pay raises work out to about $150 per year per employee. And the CEO pay is about 10% of what CEOs of comparable size companies get. Perhaps if they actually paid for talent, instead of for truck drivers, they'd get a CEO worth a damn.

And after all that - those salaries were not what was bankrupting the company. The health and pension benefits - worth tens of millions of dollars every year - is what was breaking the company.

I also read on the boards, but couldn't verify it - that the executives were working for $1 this year, but were indeed going to start drawing a salary next year. ETA: http://blogs.wsj.com/deals/2012/04/09/hostess-cuts-four-executives-pay-to-1-after-big-july-raises/

Liberals are just nasty, greedy, people who add nothing of any value to anything they touch.

nobody's_hero
11-21-2012, 03:53 AM
Scott Quenneville, a Hostess truck driver represented by the Teamsters, said he feels his colleagues were misled by Mr. Hurt into believing that a buyer would swoop in for the company. Mr. Hurt on Sunday said he thought there was a good chance a buyer would emerge who would give union members their jobs back.



"Frank misled a lot of people. He was not going to settle for anything less than closing the company down, because they didn't want that 8% pay cut," said Mr. Quenneville. "If you don't want the job, leave the job. Why ruin 18,000 jobs?"



"I didn't mislead anybody on anything," Mr. Hurt said. He said he didn't tell workers preparing to strike that a buyer for Hostess was definitely waiting in the wings.



Mr. Hurt said, "I don't want anybody to think that anybody is guaranteeing anyone anything, but we did know that there were people taking a look at this company."

This would be a truly fantastic drama, if people's lives were not at stake. And no, not one former Hostess worker will retain their job at the new company: that much is certain.

As we said, if only people had a basic understanding of how bankruptcy truly worked, and what the real state of the economy was, then Hostess' workers may have had a chance and some amicable comrpomise would have been possible.

Then again, if people in America actually understood economics and simple finance, then the "Ohio outcome", and many others, would have likely been quite different.

Now we can only hope we were not correct about the ultimate outcome too: namely that the US government will effectively hijack the bankruptcy process, and in doing so "bailout" a junk food maker, just so 18k votes can be preserved at the expense of creditors and making yet another mockery of the bankruptcy process, and property rights in the US.

Then again, this is precisely what the Union was likely hoping for all along, because once the government starts bailing everyone out, just where does it draw the line?

Well, the union leader, mr. hurt, seems very flippant about the whole thing, as if he has some sort of back-up plan. I think that a Twinkie Bailout is very possibile. No doubt the media will portray it as the company leaders taking a bailout ('evil greedy rich people!!!!', they'll say), and not mention anything of the role the Baker's Union played in all this.

ghengis86
11-21-2012, 01:06 PM
And that as they say, is that:

http://www.zerohedge.com/news/2012-11-21/will-be-blamed-sandy-too

Following yesterday's news that the Hostess mediation with its workers has collapsed, formalized earlier today, we get the next update which will likely make for a less than happy thankgsiving for a whole lot of former workers:

HOSTESS CEO SAYS MUST TERMINATE 15,000 EMPLOYEES TODAY

We wonder if this surge in initial claims reported next week will also be attributed to Sandy?

torchbearer
11-21-2012, 02:57 PM
And that as they say, is that:

http://www.zerohedge.com/news/2012-11-21/will-be-blamed-sandy-too

Following yesterday's news that the Hostess mediation with its workers has collapsed, formalized earlier today, we get the next update which will likely make for a less than happy thankgsiving for a whole lot of former workers:

HOSTESS CEO SAYS MUST TERMINATE 15,000 EMPLOYEES TODAY

We wonder if this surge in initial claims reported next week will also be attributed to Sandy?


correction: Super Storm Sandy :rolleyes:

ghengis86
11-21-2012, 05:03 PM
http://www.zerohedge.com/news/2012-11-21/goodbye-hostess


Submitted by Tyler Durden on 11/21/2012 15:35 -0500

Jones Day None Perella Weinberg Unemployment Unemployment Benefits


Everyone loses:

HOSTESS JUDGE APPROVES MOTION TO WIND DOWN COMPANY
HOSTESS WINS APPROVAL TO CLOSE AND BEGIN SELLING ASSETS
Next up: the Twinkie economy.

Fom Leveraged Loan:

U.S. Bankruptcy Judge Robert Drain this afternoon approved Hostess Brands’ emergency wind-down plan, as well as an amendment to its debtor-in-possession credit agreement that will allow Hostess to access the full amount of its $75 million DIP loan during its liquidation.

Drain also denied a motion filed by the U.S. Trustee to convert the case to Chapter 7, though he did not rule out the prospect of a conversion at a later date.

Hostess returned to the bankruptcy courthouse in White Plains, N.Y., this morning after a last-minute mediation yesterday between the company and its main bakers’ union failed to produce a settlement to halt liquidation of its assets. The hearing began Monday afternoon, but was delayed shortly thereafter to give the company and the Bakery, Confectionary, Tobacco and Grain Millers Union a final opportunity to engage in mediation to avert the strike the BCT began last week. But by Tuesday evening, Hostess announced that the mediation was “unsuccessful.”

Judge Drain opened today’s hearing with a brief, private chambers conference to discuss the mediation, the details of which remain confidential.

Back in open court, Hostess financial advisor Joshua Scherer, of Perella Weinberg, took the witness stand to discuss the company’s failed efforts to sell the company as a whole, and the status of its newly launched liquidation strategy.

During its Chapter 11, Hostess fielded six bids for the sale of the company as a whole, none of which passed muster, Scherer said.

In the past five days, however, since Hostess officially launched its liquidation process, the company has received “a flood of inquiries,” said Hostess lawyer Heather Lennox, of Jones Day. The company expects to file a number a number of stalking-horse bids for its assets within the next few weeks, she said.

“The number of inbound calls has been surprising, on a number of fronts,” Scherer said. Those inquiries fall into four “buckets,” he explained. Offers have come from regional bakeries, national competitors, customers (such as Wal-Mart, Kroger and Giant Eagle), and a fourth catch-all category, including large consumer products companies. Scherer said the liquidation sale has generated “very significant interest” from international buyers as well.

Many of the buyers were uninterested in the assets when Hostess was weighed down by its union liabilities, he said. “We have very significant momentum right now with, from a selling perspective, positive press,” Scherer said. “It’s critical to maintain momentum and a competitive dynamic.”

“Every day our product is off the shelf, it’s diminishing in value. Our customers get used to selling goods without our brands, and the end-users learn to live without Twinkies and Wonder Bread.”

On the stand, Hostess CEO Gregory Rayburn said he needs to terminate about 15,000 employees today so that they can collect unemployment benefits. Drain approved an employee retention plan that would keep about 3,200 employees on the job during the wind-down process.

tttppp
11-21-2012, 08:23 PM
http://dealbook.nytimes.com/2012/11/20/hostess-brands-says-it-fails-to-reach-labor-deal-in-mediation/

Maybe they were badly managed in the first place due to the union. I don't understand why anye company would want a union. Going to court over this stuff is a waste of time and money.

Tod
11-21-2012, 08:31 PM
I just bought some "Little Debbie's" Cloud Cakes the other night (equivalent of Twinkies). Now I remember why I was never a fan of Twinkies.

madengr
11-21-2012, 08:34 PM
“Every day our product is off the shelf, it’s diminishing in value. Our customers get used to selling goods without our brands, and the end-users learn to live without Twinkies and Wonder Bread.”

OMG I can't live without twinkles and wonder bread.

AGRP
11-21-2012, 08:48 PM
All this talk about hostess is making me crave a twinkie. Perhaps this is just an elaborate marketing idea to sell more product.

tttppp
11-21-2012, 09:07 PM
By the way, we are better off without most of their products.

ghengis86
11-21-2012, 09:43 PM
Twinkies and wonder bread will still be around. The brand has value and will be bought. Even if they disappeared another corn syrup stuffed, corn sweetened corn roll would take their place.

tttppp
11-21-2012, 11:02 PM
Twinkies and wonder bread will still be around. The brand has value and will be bought. Even if they disappeared another corn syrup stuffed, corn sweetened corn roll would take their place.

Unfortunately.

angelatc
11-21-2012, 11:18 PM
Unfortunately.

Don't eat them if you don't like them. It's really that simple!

pacelli
11-21-2012, 11:24 PM
The company will just change its name and continue producing. That's what Diebold did, and look at how recession-proof they became.

They're only putting up this mediation bullshit to play around with the people in the fiat markets right now. I wonder how many retirement plans Hostess was a part of ?

angelatc
11-21-2012, 11:28 PM
All this talk about hostess is making me crave a twinkie. Perhaps this is just an elaborate marketing idea to sell more product.

I don't care for Twinkies, but those fruit pies, packed with preservatives and dipped in glaze? Sigh. Our local grocer has a knock-off in the bakery, but they're not the same.

Hostess went through a spell a few years ago where they cut back severely on the fruit, but that seemed better last time I had one.

The union workers are trumpeting this as some sort of a victory. I almost feel bad for them. They don't seem to realize that the war is over now.

torchbearer
11-22-2012, 08:38 AM
I don't care for Twinkies, but those fruit pies, packed with preservatives and dipped in glaze? Sigh. Our local grocer has a knock-off in the bakery, but they're not the same.

Hostess went through a spell a few years ago where they cut back severely on the fruit, but that seemed better last time I had one.

The union workers are trumpeting this as some sort of a victory. I almost feel bad for them. They don't seem to realize that the war is over now. the animals took over the farm... but then, there was no more farm.

youngbuck
11-22-2012, 08:54 AM
the animals took over the farm... but then, there was no more farm.

Perfect. And I don't feel sorry for the animals at all when there's nobody around to feed and water them. Of course it's now gov'ts job to do that nowadays.

Lucille
11-22-2012, 09:05 AM
Were Those Reasonable Teamsters Really the Bad Guys in Hostess Fight?
http://reason.com/blog/2012/11/21/were-those-reasonable-teamsters-really-t


Here’s an interesting Hostess liquidation counter-narrative: Though the Teamsters appeared to be trying to be the voice of reason in this union battle with the snack manufacturer, is it because the truckers had a nice little protection racket the bakers union was paying the price for?

Holman W. Jenkins at the Wall Street Journal wrote a column suggesting that the minority union was paying the price not just for bad management and pension underfunding, but for Teamster-friendly expensive distribution regulations:


Union-imposed work rules stopped drivers from helping to load their trucks. A separate worker, arriving at the store in a separate vehicle, had to be employed to shift goods from a storage area to a retailer's shelf. Wonder Bread and Twinkies couldn't ride on the same truck.

Hostess has spent eight of the past 11 years in bankruptcy. As the company explained to its latest judge, the Hostess brands "have not been able to profit from many of their existing delivery stops and have been unable to enter potentially profitable markets, such as dollar stores, vending services and movie theaters."

None of this had much to do with the bakers union:


Under pressure on Monday from Judge Robert Drain to back down from their strike aimed at forcing the company to liquidate, the bakers themselves pointed to "what everyone in the baking industry knew: Hostess's production costs were neither excessive nor out of line with the market but its distribution costs were—to the tune of between $80 million and $130 million annually."

One could always ask about the wisdom of a labor-law structure that causes companies like Hostess to drag on for decades without adapting to their marketplaces. One might question whether the bakers are acting in true and brotherly solidarity. But given the circumstances that actually exist, the bakers might well prefer to hold back further concessions, let the company liquidate, and try their luck with a new owner or owners who might materialize for its bakery operations.

Very sad.

tttppp
11-22-2012, 09:06 AM
Don't eat them if you don't like them. It's really that simple!

That's not the point. All our healthcare costs go up because stupid people eat this garbage then seek medical care because of it.

torchbearer
11-22-2012, 09:10 AM
wow

paulbot24
11-22-2012, 09:18 AM
There's enough civil unrest in this forum to make Atlas tremble.

angelatc
11-22-2012, 09:40 AM
That's not the point. All our healthcare costs go up because stupid people eat this garbage then seek medical care because of it.

Freedom doesn't even apply to what I choose to eat? Wow, indeed.

And economically speaking, you're channeling liberal economic theory. (of course, calling people who don't choose to live with your stick up their butt "stupid" is also a sign of liberalism ) In reality, high prices ensure adequate supply, Increasing supply brings down price, but decreasing demand doesn't necessarily decrease price.

For example, cardiologists would retire and not be replaced in that field if demand fell. Instead, new graduates would specialize in more lucrative fields.

Lucille
11-23-2012, 11:07 AM
Union Rules were Harder to Digest than Twinkies
http://www.zerohedge.com/contributed/2012-11-22/union-rules-were-harder-digest-twinkies


Myth: Twinkies have a shelf-life of forever. They don't; they stay fresh for about 25 days.

The national labor bosses stood firm. Labor leaders are proud they stood up to those nasty ‘suits’ [see Entourage for definition] who refused to run a money-losing business simply to continue paying salaries and benefits.

Hostess posted a $341 million loss in 2011 on revenues of about $2.5 billion. Contributing to those 2011 losses:


$52 million in Workers’ Comp Claims
Dealing with 372 Distinct Collective-Bargaining Contracts
Administration of 80 Separate Health and Benefits Plans
Funding and Tending to 40 Discrete Pension Plans
$31 million in year-over-year increases in wages and health care benefits for 2012 v. 2011


Uncounted in the above numbers were the outrageous union-imposed rules that made for a too-high-to-bear cost of sales:


No truck could carry both bread and snacks even when going to the same location
Drivers were not permitted to load their own trucks
Workers who loaded bread were not allowed to also load snacks
Bringing products from back rooms to shelves required another set of union employees
Multi-Employer pension obligations made Hostess liable for other, previously bankrupted, retirement plan contributions from employees that never worked for Hostess at all


America has come to this. The only defense against insane union demands is the willingness to walk away and close shop.

tttppp
11-23-2012, 12:11 PM
Freedom doesn't even apply to what I choose to eat? Wow, indeed.

And economically speaking, you're channeling liberal economic theory. (of course, calling people who don't choose to live with your stick up their butt "stupid" is also a sign of liberalism ) In reality, high prices ensure adequate supply, Increasing supply brings down price, but decreasing demand doesn't necessarily decrease price.

For example, cardiologists would retire and not be replaced in that field if demand fell. Instead, new graduates would specialize in more lucrative fields.

You are incorrect. My ideas come from myself not from the democratic party. All I suggested was to have incentives for the good things and disincentives for the bad things. You would still have the right to buy whatever crap you want.