Twinke a Sucide by Unions
Click on an option to vote
#1 Nov 17, 2012
---Unions kill an American classic, and 18,500 of their own jobs.
Perhaps it says something about Americathough we're not sure whatthat iconic junk foods like Twinkies, Devil Dogs, Ho Hos snack cakes and Wonder bread have endured since the 1930s despite changing consumer health and eating habits. It does say something about institutions that can'tor refuse toadapt to new economic times that the company behind those products has chosen to go out of business overnight.
Hostess's owners have decided to liquidate rather than ride out a nationwide strike by one of the largest of its dozen unions, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union. The Texas-based company owned by the private-equity shop Ripplewood Holdings and other hedge funds essentially gave up. On Friday it shut down its 33 bakeries and 565 distribution centers and prepared to fire nearly 18,500 employees en masse and auction off its brand and recipe portfolio.
Hostess posted sales of $2.5 billion in 2011 but lost $341 million and lacked the cash flow to hold out through the bakers union work stoppage that had only lost a few days of production so far. One reason is a labor-rule burden that by comparison makes Detroit look like Hong Kong.
The snack giant endured $52 million in workers' comp claims in 2011, according to its bankruptcy filing this January. Hostess's 372 collective-bargaining agreements required the company to maintain 80 different health and benefit plans, 40 pension plans and mandated a $31 million increase in wages and health care and other benefits for 2012.
Union work rules usually required cake and bread products to be delivered to a single retail location using two separate trucks. Drivers weren't allowed to load their own vehicles, and the workers who loaded bread weren't allowed to load cake. On most delivery routes, another "pull up" employee moved products from back rooms to shelves.
This year management negotiated concessions from some of the unions, including the Teamsters, but the bakers rejected a last and best offer in September. Then the courts gave Hostess unilateral authority to modify collective-bargaining contracts, prompting the strike. So now it will liquidate, instead of attempting to emerge from Chapter 11 intact.
The 18,500 layoffs are equal to about 11% of the net new jobs the entire U.S. economy created in October. The unions are blaming private equity, or Bain Capital, or capitalism (because they are communist), but the election is over. And so is Hostess.
#2 Nov 17, 2012
Unions just another special interest, looking to hold onto perks that no one else gets
#4 Nov 17, 2012
Like $63 an hour working for GM, how come the young workers in the new plant in Kentucky only make $16 an hour, how can the younger workers survive making $47 less!
#5 Nov 17, 2012
You can't spell, but the numbers are ANY more accurate...YEAH, right !!
#6 Nov 18, 2012
thanks for the response
#8 Nov 18, 2012
my son Crassus werks at Walmart and makes 8.01 an hoer. we servive, gits a little hard rund da end of da month whenz foodstmpz run low. butz he does reel good clecting dem carts in da perkin lot.
#9 Nov 18, 2012
Maggie sucks the insides out of his Twinkies. He like them fresh.
#10 Nov 18, 2012
All this talk by Slew is a reflection upon itself
#12 Nov 18, 2012
Pretty bird ! LMAOROTFU~! Doesn't actually mean you're pretty or a bird, except in your psycho planet, nannerpuss. LMAOROFU~!2
#13 Nov 19, 2012
Twinkies Defense Is Private Equity's Pension Offense: Street Whispers
NEW YORK (TheStreet)-- The liquidation filing of Hostess Brands -- the maker of consumer fattening favorites such as Ho Ho's and Twinkies - also means that Americans may soon gorge themselves on the company's massive pension liabilities.
Hostess' liquidation -- just like the recent bankruptcies of well known companies like Friendly Ice Cream and Eddie Bauer -- raises the prospect that sophisticated private equity and distressed debt hedge fund investors are using courts to cast off unwanted pension obligations on U.S. taxpayers and put a losing investment back on the track.
Consider that also on Friday, the Pension Benefit Guaranty Corporation disclosed that its U.S. pension plan insurance deficit grew to a record $34 billion this year, the biggest shortfall in the federal agency's history. PBGC guarantees employee pension plans after a company goes belly up, securing the retirement of roughly 43 million U.S. workers.
While PBGC doesn't take government money directly - it's funded by way of insurance premiums and portfolio returns - the agency's head said on Friday that a growing deficit raises the prospect of taxpayer support.
In a statement released with the agency's bleak outlook, PBGC Director Joshua Gotbaum attributed the plan's shortfall on an inability to set premiums for member companies and noted that the agency's deficit may put taxpayers at risk for the first time in its 38-year history.
"PBGC may face for the first time the need for taxpayer funds," Gotbaum said on Friday.
#14 Nov 19, 2012
So what is the tie-in between Hostess Brands liquidation and PBGC's dire financial outlook?
Were a bankruptcy judge to approve Hostess's plans, it's likely that most of the near 18,500 Hostess workers will lose their job and pensions with the company.
As part of the bankruptcy Hostess said it would terminate its pension, with roughly 2,300 employees in the company's single-employer plan falling under PBGC's guaranty, according to an agency statement. The company's larger multi-employer plan may also get some PBGC support, while potentially not needing a full guarantee because losses could be mutualized.
The size of Hostess Brands employees claim to PBCG could also illustrate how big money investors are using the bankruptcy process to shirk financial obligations on a federal agency as a means to salvage or profit on an investment.
For instance, in Hostess Brands Jan. 2012 bankruptcy filing, the company's biggest unsecured creditor was The Confectionery Union & Industry International Pension Fund, a unionized employee plan with a near $944 million pension claim.
Further down the list of financial losers in Hostess Brands bankruptcy and potential dissolution are the company's hedge fund investors, which include Monarch Alternative Capital, Ripplewood Holdings and Silver Point Capital.
The size of the near $1 billion union pension claim is likely, in part, because Hostess's hedge fund owners stopped contributing to the company's pension plan in August, as a result of bitter labor negotiations and deteriorating finances.
A look through the PBCG's claims list highlights scores of failed companies like Friendly's Ice Cream, Eddie Bauer and parts supplier Delphi Automotive (DPG), which remain large investments of hedge funds and private equity firms after the agency absorbed pension obligations.
A Monday report from Fortune Magazine indicates private equity firm Sun Capital might bid on Hostess Brands as a going concern. However, it doesn't specify how pension obligations would be dealt with following the Friday termination of employee plans.
Sun Capital's interest may very well underscore how private equity firms use PBGC guanrantees to pave the way for probitable investments. In January, the Center for Economic Policy and Research detailed how the buyout firm used the bankruptcy process to wipe 6,000 employee pensions from Friendly's Ice Cream. In that deal, the PBGC accused Sun Capital of fraud.
Law firms such as McDermott Will & Emery see another Sun Capital deal involving milling company Scott Brass and a legal suit with the Teamsters as a potential blueprint for how to shirk pension liability during buyout investments.
#15 Nov 19, 2012
Hedge funds like Elliott Management, Silver Point Capital and Paulson & Co. emerged from Delphi's 2009 bankruptcy exit as the company's largest investors. For is part, Delphi emerged as PBGC's second largest claim, with a $6.38 billion pension liability.
Sun Capital remains a top Friendly's investor, after the company's late 2011 bankruptcy put pension claims onto PBGC's books and the buyout firm re-acquired the company in a bankruptcy court. At Eddie Bauer, the story is similar.
Some investors like Wilbur Ross of WL Ross & Co. even appear to have made a career of buying up companies that have saddled PBGC with billions in claims.
In the steel industry, Ross took control of the likes of LTV Steel and Bethlehem Steel during their bankruptcies in the early 2000's amid a U.S. industry downturn, and was able to score investment returns after both companies let billions in pension claims run onto PBGC's balance sheet.
A 2005 New York Magazine feature illustrates how Ross structured the bargain basement steel industry buyouts to see a financial reward, while both companies remain among the five biggest PBGC claimants.
During an election year appraisal of Bain Capital buyout investments under Mitt Romney, Bloomberg reported how the buyout firm wrenched out gains by socializing pension claims of companies like GS Industries, another failed steel company.
PBGC also stepped up to sweeten investments during the financial crisis. Failed Californian lender IndyMac Bank, bought by a consortium of private equity firms including Dune Capital Management and J.C. Flowers & Co., is a large PBGC claimant and its owners are poised to reap big gains in their FDIC-assisted investment
Meanwhile, in the auto bailout, Chrysler's hedge fund owner Cerberus Capital Management retained some equity in the company's businesses, which nearly recouped most of total losses in the failed investment. Much of Chrysler and General Motors (GM) post-bankruptcy ascendance can be attributed to the evisceration of billions in pension liability brokered by the government.
Media reports indicate Hostess brands may also find a corporate buyer from the likes of ConAgra Foods (CAG) or Mexican conglomerate Grupo Bimbo, among scores of potential bidders, and the company's CEO is confident of individual asset sales.
Amid a potential feeding frenzy for the snacks brands of Hostess, taxpayers may be the only ones fed losses by way of prospective PBGC claims.
#16 Nov 19, 2012
Obama is proud to have that job created under his watch!
#17 Nov 19, 2012
stop blaming unions for your economic collapse, the problem is greedy american corporations that couldn't care less about the american working joe and at the same time are taking advantage of global cheap wages to maximize their profits that will never be reinvested in the u.s. if the united states does not wake up soon and impose some stiff trade regulations to protect american jobs your country will be doomed. if your country is not careful the thing that made you great could also ruin you...it is called runaway capitalism!
Add your comments below
|Davy crockett dossier||18 min||Davycrockett||7|
|Liberals caught planning violence for inauguration||19 min||Davycrockett||14|
|Wikileaks: dossier "bogus"||1 hr||Space ace||14|
|Watergate reporter: "trump dossier is garbage"||1 hr||Space ace||37|
|Drop one word....add one word game (Apr '14)||9 hr||WildLifeLover||687|
|Holiday Jan 16||14 hr||Paradigm Shift ri...||7|
|South Carolina ALS Association Thanks To: Rev. ...||18 hr||Kelsey||3|
Find what you want!
Search Minneapolis Forum Now
Copyright © 2017 Topix LLC