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So, 18,000 jobs lost but you did not like the product they produced? This equals good? And 1000 jobs gained and there should be a celebration? Oh, and if you think that 1,000 gained vs 18,000 lost then you are part of the "ain't it awful crowd"
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“Hostess’ announcement that it is liquidating the company is a deep disappointment for all of our Hostess members. While Hostess management wants to blame our members for the demise of the company, the truth is that had it not been for the valiant efforts of our members over the last eight years, including accepting significant wage and benefit concessions after the first bankruptcy, this company would have gone out of business long ago.
“Hostess failed because its six management teams over the last eight years were unable to make it a profitable, successful business enterprise. Despite a commitment from the company after the first bankruptcy that the resources derived from the workers’ concessions would be plowed back into the company, this never materialized. Management refused to invest in modernizing its bakeries or devote necessary resources to advertising and marketing, product development and new technology. Business plan after business plan failed, leaving the company ever deeper in debt.
“When a highly respected financial consultant, hired by Hostess, determined earlier this year that the company’s business plan to exit bankruptcy was guaranteed to fail because it left the company with unsustainable debt levels, our members knew that the massive wage and benefit concessions the company was demanding would go straight to Wall Street investors and not back into the company.
“Our members were aware that while the company was descending into bankruptcy and demanding deep concessions, the top 10 executives of the company were rewarding themselves with lavish compensation increases, with the then CEO receiving a 300 percent increase.
“Our members decided they were not going to take any more abuse from a company they have given so much to for so many years. They decided that they were not going to agree to another round of outrageous wage and benefit cuts and give up their pension only to see yet another management team fail and Wall Street vulture capitalists and 'restructuring specialists' walk away with untold millions of dollars.
Seems like they saw the writing on the wall - Twinkies was failing regardless and there was no point to give up wages that would just go to a Bain like firm overseeing the doomed restructuring.
To me in this day and age a good union knows how to read the financials of the company and goes to the bargaining table appropriately from there. Sounds like the company is deep in debt ... so on the surface it seems we have union failure. the fact that Hostess is in banruptcy seems to show union failure.
Possible here that the owners found a way to turn bad business decisions into a profit for themselves. I'm leaning towards this and I don't think the union is the bad guy here. The media likes the story they are playing ... it's not a fair and balanced story at all IMO.
Good chance you're correct.
Whenever a holding company buys a company, they do it with the specific intent of re-building profitability so they can sell the company for a profit.
That is just what holding companies do...it is their "raison d'etre".
So maybe we can't blame the unions, but we also can't blame the holding company for doing what they're supposed to do.
Grupo Bimbo is the world’s largest bread baking firm, which already owns parts of Sara Lee, Entenmann’s and Thomas English Muffins and previously made what was considered a low-ball offer of $580 million a few years ago, Forbes reports. Now Hostess may only be worth $135 million.
Economists say high sugar prices tied to US trade tariffs were a big reason Hostess was struggling, but a Mexican company could be a lifeline for Twinkies because it would be able to take advantage of access to lower-priced sugar in Mexico.
While Hostess was clearly struggling, analysts believed Grupo Bimbo had an eye on them since the early 2000′s because they saw Hostess as a key ingredient for North American expansion with delivery routes that penetrated across the country into convenience stores, gas stations and grocery markets, according to Forbes.
BCTGM members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.
Over the past 15 months, Hostess workers have seen the company unilaterally end contractually-obligated payments to their pension plan. Despite saving more than $160 million with this action, the company continues to fall deeper and deeper into debt. A mountain of debt and gross mismanagement by a string of failed CEO's with no true experience in the wholesale baking business have left this company unable to compete or survive.