Hostess Blames Unions for Its Bankruptcy

[The Straight Story]

Hostess Blames Unions for Its Bankruptcy


DALLAS (CN) - Hostess Brands, which filed for Chapter 11 two weeks ago, asked a judge to reduce its commitments to union employees, claiming the costs put the Twinkie-maker at a "profound competitive disadvantage."

Irving-based Hostess asked the Manhattan Bankruptcy Court to reject its collective bargaining agreements and modify retiree benefit obligations for its major unions, The International Brotherhood of Teamsters, and the Bakery, Confectionary, Tobacco and Grain Millers Union.

Hostess said when it filedfor bankruptcy that incremental change, including a bankruptcy filing 3 years ago, were insufficient and that its cost structure is "not competitive, primarily due to legacy pension and medical benefit obligations and restrictive work rules. Those issues, combined with the economic downturn and a more difficult competitive landscape, created a worsening liquidity situation that prompted the need for a reorganization."

Hostess seeks relief from what it calls "a number of significant financial commitments and arcane work rules imposed by collective bargaining agreements."

http://www.courthousenews.com/2012/01/30/43442.htm

[Drale]

1. If its always the Unions fault?

Then why did Hollywood Video go out of business? We didn't have a Union.

[sarcasmo]

15. Netflix

[Drale]

18. Actually terrible managment who refused to modernize

It was the typical evil corporate rulers who where trying to bleed as much out of the company before they let it die.

[nobodyspecial]

2. Oh, it's a "strategic" bankruptcy

so it can get out of commitments made to its workers.

I'm sure it has nothing to do with making crappy products filled with sugar and chemicals. Organic and healthier products continue to gain market share.

[doc03]

5. Hey they may be unhealthy but I love my SuzyQs. It's all about

dumping their pensions on the PBGC and concessions. These companies have been dumping their pensions on the PBGC ever since the program was started. I wonder how much more that puts it into debt?

[Broderick]

9. I love those things too

I will mourn the loss if I can't get them anymore.

Damn you Debbie Snacks!

[Gidney N Cloyd]

3. Then there's the problem of Twinkies defying expiration dates.

When you make a treat that could be classified as "durable goods" that's got to put a damper on sales.

[Bluzmann57]

4. Of course it's the Union's fault.

Either that or still more corporate greed and desire to squash the BCT Intl. Union, of which I was a proud member at one time, before the company I worked for went (way) south to avoid Union help.
I actually used to go out of my way to but Wonder bread because it's Union made, but now I'm not so sure.

[surrealAmerican]

6. It's funny how the management never blames poor management for their failures.

... Wait, that's not funny, just sad and predictable.


Are they declaring bankruptcy because of real financial problems, or just to screw their workers?

[WI_DEM]

7. Maybe the problem is people waking up and not buying as much junk food?

[Sheepshank]

20. Huge, huge national push for healthier eating

and the educational aspect of disseminating information on the statistically harmful effects of the US's burgeoning waistlines and increase in diabetes etc. I'd say part if not a major part of the bankrupcy has to do with the archaic fashion Hostess refuses to jump into the new and leaner lifestyles being promoted....it's about poor managment.

[otohara]

8. Hostess Brands Makes Me Think of 1960's

Anyone who gives a hoot about their health hasn't eaten Hostess in years.

[rustydog]

10. if you are not selling more of your tasty treat, maybe America doesn't want it anymore

You had your run twinkie, your creamy goodness in the center of your product is not goodness or creamy any more...maybe it isn't unions, maybe it's you.

[Moostache]

11. I am tired of the profit paradigm.

There is a basic fact that goes widely ignored in MANY bankruptcies - why are the compensation packages of the executives and board of directors for these companies not THE FIRST THING CUT? They are FAILING - failing to run the company, failing to innovate, failing to find ways to motivate and energize their employees, failing to do ANYTHING except steal money from the corporate trough.

The second thing that I find disgusting is that the "legacy costs" are always cited as a crippling competitive disadvantage, yet without the employees who worked and built these companies in the first place, there never would have been a legacy at all! Why are there no clawback provisions for executive pay or compensation? Why is it ALWAYS the pensions and retirement accounts of the workers that are the problem and the thing to shed?

I am sick to death of seeing those who maneuver capital around a board take all the profits for zero skin in the game - if they are going to make millions of dollars (and thousands of times more than the line worker or baker or union driver), then they damn well should be on the hook for the long term performance of the company! Their compensation packages should be spread out and payable over 10 or 15 year periods and if the performance tanks in year 4, well then their money is affected proportionate to the performance decline. IF you take a $5M "bonus", then the company better have earned $10-20M MORE than it could have without you there or you are stealing money, period, full stop.

[Capitalocracy]

12. Twinkies.

I'm sure they did their homework and found a judge who will be sympathetic to their whining to the court system to free them from their obligations to those dirty Pinko unions.

[joeybee12]

13. As The Onion noted, they're in trouble because of Sno-Balls...

The misspelling was once cute, but not any more!

[dwilso40641]

14. If the brand is losing money,

How did the CEO, CFO get lucrative bonuses?

[lpbk2713]

16. Mismanagement and corporate greed are to blame.

If the directors and the senior execs had not wanted such a large piece of the pie they would not be in this situation. Both sides always go into contract negotiations with demands and expectations. The management side here obviously didn't concede enough or they would still be solvent.

[Snake Alchemist]

22. Not exactly.

They should not be getting nearly the amount of pay that they are, but that figure is in the millions and they are billions in debt.

[HopeHoops]

17. It wouldn't be the product now, would it?

Good grief.

[limpyhobbler]

19. nah, it's all her fault:

[MicaelS]

21. Yes sure it, if I want snack cakes, Little Debbie

Is the brand I choose. Hostess, never.

[limpyhobbler]

30. I could really go for a snack cake right about now. Little Debbies are mad cheap. nt

[Snake Alchemist]

23. So who the heck is Hostess' non-union competition? nt

[Rex]

24. And THIS is the reason OWS will never die...

despite the chagrin of some here...

[HughBeaumont]

25. Hostess' shit just doesn't taste the same as it did in the 70s.

That isn't so much "my tastes maturing" . . . they literally don't taste the same as they did, which is why I haven't really eaten anything made by them since the mid-1990s.

Well, that and I just don't want to get overweight again. It's the same with thousands upon thousands of former customers.

[highplainsdem]

26. The "arcane work rules" they're "seeking relief" from = fair treatment of their workers.

[TlalocW]

27. Maybe they can spend some time in developing a Cinammon-Raisin loaf

Whose pieces don't stick together, fall apart, or tear easily.

Minor complaint, I know.

TlalocW

[Drahthaardogs]

28. How about making better products?

I grew up second generation Italian. I always felt sorry for my friends eating wonder bread. We always went to the Italian baker and got a daily Vienna loaf. My kids won't eat it either. Real bread for them, and they won't touch those nasty little Kraft American cheese singles either. Americans are eating better these days. Change your ways. Make something that is good.

[jwirr]

29. I have 9 great grandchildren and they no longer get junk foods like Hostess twinkies. If other

families are thinking the same way maybe that is the reason they are going bankrupt. I actually hope that is the reason.

[gratuitous]

31. Arcane work rules?

Uh, Hostess? Those "arcane work rules" were bargained for by YOU and agreed to by YOU. If you didn't want to have "arcane work rules" "imposed" on you, then perhaps you shouldn't have signed the contract with your employees? Or maybe you need to hire better lawyers to negotiate on your behalf?

It's just a dirty rotten shame that Hostess Brands couldn't hire top-notch legal help to negotiate for them against those dastardly workers. Won't someone please think of the multi-national corporations???

[MagickMuffin]

32. NOOOOOOOOOO it's Paula Deens fault

With her announcing she's diabetic things are going to get

[Initech]

33. Gee what a surprise, didn't see this one coming.

[NoGOPZone]

34. It's executive management responsiblity to ensure profit, and they are given

extensive power and compensation to achieve this. Yet when they fail, it's somehow labor's fault. Bizarro world.