Get your twinkies & ding dongs while you can!

[sk8er1964]

Also, Pavelko asks why assume that the company will be as badly managed going forward as it has been in the past. I don't know--maybe it's because the same people who've screwed up are in charge, and they've asked the bankruptcy court for millions in additional compensation to manage through the bankruptcy.

According to the Snopes article, the CEO is now different, and the other execs are working for $1 or their old salaries so I'm not sure where the millions in additional compensation idea is coming from. (There's a whole lot of articles I haven't read, so maybe it's just not addressed in the Snopes piece.) As for changing management practices, I'm thinking of the example of Chrysler. When Cerberus bought them out, you could tell that was a failure waiting to happen - and it did. However, after their bankruptcy and subsequent change in management, they are doing pretty well. That's just one example of a successful change in corporate culture coming out of bankruptcy - I'm sure there are a lot more out there (although I'm sure there's plenty of failures too). That success story - as well as Ford and GM - was heavily dependent, though, on cooperation from their unions. If they hadn't made some serious changes in their own (union) culture, I think things would have been much different.

[milanessa]

What was the deal for the Teamsters? What kinds of concessions did they make? How many of them are there, and how much do they make now? I haven't seen anything written about that.

Also, Pavelko asks why assume that the company will be as badly managed going forward as it has been in the past. I don't know--maybe it's because the same people who've screwed up are in charge, and they've asked the bankruptcy court for millions in additional compensation to manage through the bankruptcy.

I have no doubt the books are bad: the company's been gutted. I haven't seen an argument by the bakers' union that it hasn't been. The bakers are arguing that any further concessions will line the pockets of management and investors, and they lose their pensions in any case.

Yes. And there does come a time when people (workers) just have to stand up. My heart aches for those that will lose their jobs but it looks like they've been left out to dry by greedy corporate owners not by union stubbornness.

[kwanfan1818]

According to Hostess,

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."

if you do the math on the chart below, you can see the millions.

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.

[Jenny]

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:

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.

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.

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.

[sk8er1964]

Some of the bakers at least, have done the math and have decided it doesn't add up. It's really their call.

I see your point, but I guess I come from a bit of a different mindset than the bakers. Ideals don't put bread on the table, (pun intended), ya know?

[Andora]

I see your point, but I guess I come from a bit of a different mindset than the bakers. Ideals don't put bread on the table, (pun intended), ya know?

I would think they were having a hard time putting bread on the table with their increasingly shrinking salaries. It's not so much an ideal to me, as just having had enough of being devalued time and time again.

[kwanfan1818]

I see your point, but I guess I come from a bit of a different mindset than the bakers. Ideals don't put bread on the table, (pun intended), ya know?

And at least one person thinks that he can get another job for the same amount of money he'd be making in five years time.

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.

[Jenny]

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.

[Anita18]

I see your point, but I guess I come from a bit of a different mindset than the bakers. Ideals don't put bread on the table, (pun intended), ya know?

It makes sense to take a salary cut for a lesser-paying job, but it doesn't make much sense to take a pay cut for your current position. If you want to continue working in the same industry, you'll be forever known as someone willing to work for pennies. It doesn't help you in the long run. Like Andora said, it devalues you.

[sk8er1964]

It makes sense to take a salary cut for a lesser-paying job, but it doesn't make much sense to take a pay cut for your current position. If you want to continue working in the same industry, you'll be forever known as someone willing to work for pennies. It doesn't help you in the long run. Like Andora said, it devalues you.

How? I doubt these folks were thinking "how do I make myself look better to a prospective new employer? I know! I'll vote against the new contract!" If anything, being part of a union like this would probably make a prospective new employer less likely to hire that worker if there's a choice between him and someone equally qualified who wasn't part of that union. At least that's the way I'd look at it - it's a tough job market out there, and being associated with a company-killing union (whether or not the label is justified) is a negative in my book.

[Anita18]

How? I doubt these folks were thinking "how do I make myself look better to a prospective new employer? I know! I'll vote against the new contract!" If anything, being part of a union like this would probably make a prospective new employer less likely to hire that worker if there's a choice between him and someone equally qualified who wasn't part of that union. At least that's the way I'd look at it - it's a tough job market out there, and being associated with a company-killing union (whether or not the label is justified) is a negative in my book.

I agree that it's a catch-22. If you take a pay cut, other prospective employers will devalue you. If you stand up for yourself, you'll be looked upon as difficult. It's up to the individual to determine which way to go.

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.

[kwanfan1818]

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?

That sounds like Teamsters territory. I can't see why the bakers' union would care how the goods were transported.

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.

You no longer pay dues if you switch to a non-union job in the same company, leave the company for a job that isn't under the same union, or change industries, but future earned benefits, like pensions, if applicable, apply even if you leave, if you're vested when you leave.

[kwanfan1818]

New reason to move to Canada: More Twinkies

[Artistic Skaters]

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.

[loulou]

And does anyone else wish that the demise of the Twinkie had even the slightest bit to do with, you know, taste rather than a labour dispute?

I think it does, actually. I think the bankrupting has got nothing to do with a labor dispute.

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.

I think it is more about the short sightedness of those on strike hoping the company goes under. That might feel good in a revenge sort of way.

Why would someone feel good because his/her company and job is going under?

But, they lose their jobs. Is it better to have less or nothing?

The latter. From a general point of view: if wages aren't fair, then it's much better to have the company bankrupt, then to have the workers struggle more and more.

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?

You took money from the government for hours that you did not work?

That one made me laugh.

[Karina1974]

That one made me laugh.

Yeah, well, I'm also still employed at that same company, so the program we were under that allowed me to get that unemployment pay while still workng the other 32 hours was successful far as my employer was concerned. I just hope that this whole "fiscal cliff" is avoided, because I really do not want to go through that again.

[Artistic Skaters]

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.

[PeterG]

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."

[LilJen]

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?

[loulou]

I just saw a photo on facebook. It's a twinkie with a huge bite bitten out of it. The caption reads:

Thanks: also very funny.