3539 and counting.
Slightly Wounding Banana list cont: MacMadame.
According to Hostess,
if you do the math on the chart below, you can see the millions.He said 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."
The other excecutives are working for $1 for two months max, and if you look at the list, most of the top executives at the company are the same. Executive compensation, even at the old levels, isn't something the company could sustain. I would not argue that no one deserves merit if a company is failing, as they could be doing great work to keep it from failing worse, but if there's no money to sustain a company, there should be no money for merit raises. Management was responsible for the company's performance, Management failed, and the same Management, apart from a CEO, is asking its workers to pay again for its poor decisions.
Some of the bakers at least, have done the math and have decided it doesn't add up. It's really their call.
"'Is this new BMW-designed sled the ultimate sledding machine for Langdon and Holcomb?' Leigh Diffey asked before the pair cruised to victory. I don’t know, but I know that sled is the ultimate Olympic Games product placement.." -- Jen Chaney
Silver Point Capital, which appears to have the largest stake in Hostess and is the entity negotiating with the union, is an investment company run by former Goldman Sachs executives, no? This is Bloomberg's description:
Certainly doesn't sound like they are interested in running a baking business. For investment firms, it's not about building companies over the long term and enjoying the profits; it's about fast return on investment for their investors and principles. The way to do that is generally to sell the company as a whole, or in parts. Therefore, the executives who the workers accuse of doing a bad job might actually be doing exactly what they are paid to do - prepare it for sale, which means making it an attractive investment for someone else. Assets may include physical plants, technology, distribution networks and workforce, but it sounds like in this case the workforce is proving to be a liability. The biggest asset might have originally been the heritage brands themselves, and given that in the past 8 years (since the last bankruptcy/restructuring), consumers have moved further away from snack foods, those brand names are likely losing value too. I wonder if they even have global rights - one key brand, Wonder Bread is manufactured in Canada by a company that owns its outright, so Hostess gets nothing from licensing.Silver Point Capital L.P is a privately owned hedge fund sponsor. The firm manages hedge funds for its clients. It invests in the public equity, fixed income, and hedging markets of the United States. The firm primarily invests in securities of distressed, large-cap, and Mid-cap companies; bank debts; bonds; and trade claims. It specializes in credit analysis and diversified credit-related investments. Silver Point Capital is based in Greenwich, Connecticut.
The history of the food industry is filled with mergers and acquisitions and takeovers and brand shuffles. I think this one is only getting this level of attention because a) it comes at a time when many Americans are out of work and job prospects are not good and b) because the brands involved are well known and newsworthy, as opposed to some brand of canned vegetables or an obscure auto part or the like.
"How you treat the weak is
Your true nature calling" -- Jane's Addiction
Following what Jenny said about the major holder in Hostess, and what their likely aims are, why should the workers help a hedge fund make the company more attractive by cutting their wages, benefits, and pension? So that they can be screwed the same way in another few years time? Let the hedge fund try to regain its investment with a dying brand and the remnants of a company, if a person can get another job for the same.
I wonder if the union was negotiating the wrong terms - trying to keep the company alive by agreeing to paycuts rather than working on ensuring employees could keep their jobs when plants changed hands. Also, somewhere I read that one of the paycuts in past years was in exchange for equity in the company, which could mean that if the company is sold, then the employees get a piece of that - the union and the employees should have worked to protect that (I don't know if they did, but there doesn't seem to be much discussion of it). In one interview, the CEO said that the company was also hampered operationally by a lot of old contracts from previous mergers - things like cakes and bread having to be transported on different trucks by different drivers or something - I wonder how much of that was on the bargaining table?
Sounds like the employees, management, union and investors were never on the same page.
I'm not entirely sure how unions work - if the member is out of a job, are they required to still be part of that union? I'm supposedly part of a union myself (one for lab techs), but I figure that my membership should go away when I quit my job and change industries.
My mindset is that there is a sickness in the corporate culture of many corporations that makes them willing participants in juggling numbers, falsifying information, & doing many things lacking in honesty & integrity, often to the detriment of their employees, & at some point people have to say enough is enough.
If I was a diligent worker who put in an honest day's pay for an honest day's wages & those wages were 48K in 2005 & will be reduced to 25K in the near future due to poor management & corporate greed, then I would frankly feel better working for $10 an hr elsewhere for a company that might not be able to pay too much but values their employees. I might be poorer but I'd have a higher level of job satisfaction that wouldn't conflict with my own standards.
Is the company bankrupting because they have been overpaying their work force, or because management choices got them out of market?
What percentage of total cost is work force cost?
What is the top to bottom ratio in the incomes?
If the paycuts were to be accepted, what's the plan that should show sacrifices will save jobs, since it looks like the last time around they didn't?
In the last fourty years, profits shifted heavily from rewarding jobs to deepening companies' margins. Heavily. It's not good for the economy, on the contrary: it weakens the workers and the management skills, and the society as a consequence.
It's not even about their problems.
I guess you agree that if a company isn't able to pay fair wages, and instead needs un-fair wages to stay on the market, than the management isn't doing a very good job, so let the market rule, let the company go under, and someone else with better managing skills will rise. Someone always does, if you leave chances open.
Let's then hypothetically say the workers are going to accept to be under-payed, because, as you say, for desperate people it's always better less than nothing. This will spread: if they are under-payed, other companies will have to deal with that issue too to stay on the market; and if there's always someone desperate enough to work under-payed, those will force everyone else down that route, because it's either less (and less and less) or nothing. And if you don't accept, someone else will and you'll find no job.
A society should really fight hard for its companies to pay fairly, or bankrupt.
The other possible way is for people to be payed un-fairly. And how much so? To the point where you cannot afford rent? education for your children? health care? or maybe food? or maybe just healthy food? Does that sound like a good compromise, eating but not eating healthy?
Last edited by loulou; 11-23-2012 at 05:56 PM. Reason: spelling mistakes
This was a topic of discussion yesterday because one of my immediate family members works for a bakery. It is a high end gourmet bakery, non-union, & always busy with a line out the door, big catering business, breakfast & lunch clientele. She makes quite a bit more than the $25K ($12 an hr) which is what it says these Hostess bakers would soon be earning. She has health insurance, 401K & other benefits. She says the owners & management are top quality who treat all the employees from the dishwashers to the bakers with the same respect & display leadership with integrity. She feels she has learned a good trade with transferable skills but has job security where she is. So there are jobs like this out there & Hostess does not have to be the only game in town if that's how they choose to conduct their business.
I just saw a photo on facebook. It's a twinkie with a huge bite bitten out of it. The caption reads:
A Teabagger, a union member and a CEO are all sitting at a table with a dozen Twinkies.
The CEO immediately takes eleven Twinkies for himself.
The CEO turns to the Teabagger and says, "watch out for the union guy - he wants part of your Twinkie."
It's official. I am madly in love with Meryl Davis.
Just noticed that we have a Twinkie Cookbook on our shelf (gift from someone a few years back). Wonder if it'll go for a high price on eBay, or be worthless?
BARK LESS. WAG MORE.