Twinkies, Ding Dongs Maker Hostess Liquidates Following Failure To Labor Pension Obligations

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Twinkies, Ding Dongs Maker Hostess Liquidates Following Failure To Resolve Labor Union Animosity
Hostess Brands, the company better known as the maker of Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, and of course Wonder Bread and Twinkies, and which previously survived one multi-year Chapter 11 bankruptcy process, when it operated as Interstate Bakeries, has just made a splash at the NY Southern Bankruptcy court, for the last time, with a liquidation filing.
The reason: insurmountable (and unfundable) difference in the firm's collective bargaining agreements and pension obligations, which resulted in a crippling strike that basically shut down the company.
In other words, Twinkies may well survive the nuclear apocalypse, but there was one weakest link: the company making them, was unable to survive empowered labor unions who thought they had all the negotiating leverage... until the led their bankrupt employer right off liquidation cliff.
“Hostess Brands is unprofitable under its current cost structure, much of which is determined by union wages and pension costs,” the company said. Affected are 33 bakeries, more than 550 distribution operations and 570 stores in the U.S.
"Hostess Brands will move promptly to lay off most of its 18,500-member work force and focus on selling its assets to the highest bidders." It added it has access to $75-million in debtor-in-possession financing as it winds down its operations.
Will attention now turn to that another broke government entity, the Pension Benefit Guarantee Corp (PBGC), which will have to step in to resuscitate some 18,000 pension plans which suddenly vaporized after labor unions took their "negotiating" freedom a step too far?
http://www.zerohedge.com/news/2012-11-16/twinkies-ding-dongs-maker-hostess-liquidates-following-failure-resolve-labor-union-a
============== A separate Canadian company owns the rights to the Hostess brand here in Canada, so we'll still have our twinkies and ding-dongs. You Americans, however, will now suffer from twinkie withdrawl.
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People blame the unions, BUT during its bankruptcy proceedings, Hostess has GIVEN RAISES of 80% to its senior management!
Two vulture capital funds have owned Hostess recently and bled it DRY.
Here's a thorough analysis of the situation from Fortune, a fairly rightwing publication: http://management.fortune.cnn.com/2012/07/26/hostess-twinkies-bankrupt /
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Exactly. Instead they bled Hostess dry.
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On Fri, 16 Nov 2012 11:15:48 -0800, "David Kaye"

The article you linked does not say that at all. It says Ripplewood put $130 million INTO the company. It was the unions that ignored the fact that this was a company that was in peril and they were not willing to give up anything. Now they have given up everything.
The reality is, these are products that had a declining customer base with people making healthier choices and they did not change.
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snipped-for-privacy@aol.com wrote:

The other strange part is that it was the Teamsters that were the helpful group in this mess. They had okayed the changes, it was the other union that balked. The Teamsters even went to the Bakers union and said their guys had been over the books and this wasn't a bargaining ploy on the part of the Company and they should take the concessions. You would think this would be the other way around since the Teamsters people should have less trouble finding new jobs given the shortage of truck drivers. The three Teamsters I have seen interviewed locally have already found new jobs.
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wrote:

On the surface, I agree. Reality is probably something else. If the new buyer has to take on the unfunded pension obligation, there may be no buyer, thus no jobs and no pension funding. If the company cannot be run profitably with present contracts, there will be no buyer.
Seems like a lot of fact smearing on both sides so let's keep an open mind until we know for sure.
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The buying company would not likely be on the hook for most of these prior obligations in this case since it is coming out of bankruptcy and the court can discharge them.
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wrote:

The buyer will likely only want the brands, recipes, and customers. Leave the rest of the losing proposition, including the union, behind.
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SMS wrote:

Predatory? Private investment funds and venture capital companies poured bags of money into Hostess with the hopes that someday they'd recoup their investment - and a nice-sized return.
As things stand now, these venture capitalists are out some $200 million.

I hope you're right, but I seriously doubt the investors will get back twenty cents on the dollar. Wonder Bread may survive with a new owner, but I don't think the Twinkies brand would even FIND a buyer, no matter how low the price. "Twinkies" is the headliner of a failed company, and who wants to be associated with that? Plus, Twinkies is known to cause fatness in California.
As things stand, the workers get 99 weeks of unemployment and majority funding of their pensions (courtesy of the taxpayers) while the investment firms get bupkus.
That's not fair, I tell you.
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<snip>

Sorry, the PBGC is not taxpayer funded.
See: http://www.pbgc.gov/about/how-pbgc-operates.html
"PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans."
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They are still backstopped by the government
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And according to reports out of/low on money which means the backstopped funding comes into play.
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You clearly don't know how labor agreement pension obligations work. Not only are the companies responsible for pension expenses of their own employees, they are also obligated to cover any shortfalls from any other union employer. It has nothing to do with the company funding a pension because the company has to turn over the pension funding to the union immediately.
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"Where's the cream filling?" becomes "Where's the silver lining?"
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Wes Groleau

ASCII stupid question, get a stupid ANSI
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union and company have agreed to mediation, ho hos production along with everything else to resume
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But I'm not sure where the greed was. Union workers that refused to take a cut in pay, or a CEO that tripled his salary? Both? I'd not be surprised of both are orchestrating this a bit for some publicity too.
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wrote:

http://www.huffingtonpost.com/2012/11/19/twinkies-may-survive-pabst - brewing-company-pbr-buy-auction_n_2158928.html?utm_hp_ref=business
When Hostess announced plans to liquidate, fans of the baked-goods company feared the fate of the Twinkie. But lovers of the cream-filled sponge cake, fret not: Twinkies may survive thanks to the owner of Pabst Brewing, Co.
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On Tue, 20 Nov 2012, PeterD wrote:

on Twinkies and the like, so they could resell them on ebay for a profit. SHots of empty shelves where Twinkies once roamed, surely it can't be the supply drying up that fast.
I'd much rather see Twinkie hoarding from those who wnat them, than hoarding from those hoping to make a profit from those who actually like them.
Michael
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wrote:

I'd only hoard them due to the zombie apocalypse.
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