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eeven73 PityDaFool Who Posts This Much
Joined: 16 Jan 2003 Posts: 5377 City: Halfway
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Posted: Nov 16, 2012 6:14 am Post subject: Better stock up on Ho-Hos |
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http://money.cnn.com/2012/11/16/news/companies/hostess-closing/
Quote: | Hostess Brands -- the maker of such iconic baked goods as Twinkies, Devil Dogs and Wonder Bread -- announced Friday that it is asking a federal bankruptcy court for permission to close its operations, blaming a strike by bakers protesting a new contract imposed on them.
The closing will result in Hostess' nearly 18,500 workers losing their jobs as the company shuts 33 bakeries and 565 distribution centers nationwide, as well as 570 outlet stores. The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union represents around 5,000. |
_________________ Is President Obama a Keynesian? |
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ohsix PityDaFool Who Posts This Much
Joined: 12 Jan 2003 Posts: 6837
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Posted: Nov 16, 2012 6:53 am Post subject: |
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Bloomberg Radio was interviewing the CEO last night on my way home and this morning on my way to work. Of the 18,500 employees, 97% are unionized between 12 different unions. Management asked for everyone, top to bottom, to accept an 8% pay cut and the company would quit funding the pension plan for a limited time. The cut worked out to a 4% cut in compensation over 4 years. Everyone except one union accepted the cut and that one union, albeit representing 5,000 people, is bringing down the entire company. |
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jgriffith Wakeboarder.Commie
Joined: 21 Mar 2012 Posts: 1454 City: Boerne
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Posted: Nov 16, 2012 6:55 am Post subject: |
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Sounds like the union did a great job representing their members |
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jryoung Ladies Man
Joined: 19 Mar 2004 Posts: 7664 City: Man Jose
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Posted: Nov 16, 2012 7:11 am Post subject: |
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How does an 8% cut n pay and cutting pension funding = 4% _________________
Quote: | You don't meet many old vegans. It's mostly young priviliged kids trying to figure out where they stand in the world. | - Steve Rinella |
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eeven73 PityDaFool Who Posts This Much
Joined: 16 Jan 2003 Posts: 5377 City: Halfway
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Posted: Nov 16, 2012 7:24 am Post subject: |
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I believe there plan was to reinstate half of the wage cuts over the next 4 years. _________________ Is President Obama a Keynesian? |
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Nov 16, 2012 7:30 am Post subject: |
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I know they are striking out here.
Even if Hostess as we know it right now "closes", another player will scoop up the remains and keep it going. Of course, the new company probably won't hire back the workers from that union...
This type of idiotic strike drives me nuts. It's the very definition of cutting off your nose to spite your face. _________________
Quote: | That's Mr. Gingermex to you a$$hole. |
RIP MHL 04/25/1958 - 01/11/2006 |
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eeven73 PityDaFool Who Posts This Much
Joined: 16 Jan 2003 Posts: 5377 City: Halfway
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Posted: Nov 16, 2012 7:35 am Post subject: |
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Quote: | This type of idiotic strike drives me nuts. It's the very definition of cutting off your nose to spite your face. Neutral
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Really amazing that it would come to liquidation. Stood there ground right into unemployment. Perfect timing too, because I would guess extended unemployment benefits are going to be changed with fiscal cliff. _________________ Is President Obama a Keynesian? |
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ScottyB_RochNY Addict
Joined: 09 Jun 2004 Posts: 971 City: Rochester
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Posted: Nov 16, 2012 8:09 am Post subject: |
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Go galt _________________ John Wayne Vs. Clint Eastwood? |
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pet575 Wakeboarder.com Freak
Joined: 20 Jun 2006 Posts: 3630 City: Kansas City, MO
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Posted: Nov 16, 2012 9:27 am Post subject: |
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If that amount of labor costs is what brought the company down it wasn't in very good shape to begin with. I blame Fat America for becoming just a bit more health minded and opting for products other than theirs. They never adjusted to it, though.
On the flip side, I'm curious to hear what the union leaders told their members after this announcement. Obviously they overplayed their hand. _________________
Wakebrad wrote: | I honestly think it has to do with internet penetration... |
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ohsix PityDaFool Who Posts This Much
Joined: 12 Jan 2003 Posts: 6837
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Posted: Nov 16, 2012 9:36 am Post subject: |
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chavez wrote: | I know they are striking out here.
Even if Hostess as we know it right now "closes", another player will scoop up the remains and keep it going. Of course, the new company probably won't hire back the workers from that union...
This type of idiotic strike drives me nuts. It's the very definition of cutting off your nose to spite your face. |
The CEO thought the brands would be sold off, but the future buyers probably wouldn't need Hostess' facilities or labor force. If that's true, it sounds like they were running a business with high fixed costs and someone else can pick up production without picking up the fixed costs. |
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ohsix PityDaFool Who Posts This Much
Joined: 12 Jan 2003 Posts: 6837
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Posted: Nov 16, 2012 9:38 am Post subject: |
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pet575 wrote: | If that amount of labor costs is what brought the company down it wasn't in very good shape to begin with. |
I think squeezing all the profit out of a company is a union's job. When harder times hit, the unions won't give and the company goes under. See General Motors. |
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Nov 16, 2012 9:47 am Post subject: |
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ohsix, the only thing I'm thinking is the equipment is likely specifically designed, which means any likely buyers would probably want to keep all of that.
I'm certain the fixed costs were through the roof, making them very unattractive to potential suitors pre-BK. Through this process they will divest themselves of their baggage and probably emerge under a different ownership with a much better structure. _________________
Quote: | That's Mr. Gingermex to you a$$hole. |
RIP MHL 04/25/1958 - 01/11/2006 |
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eeven73 PityDaFool Who Posts This Much
Joined: 16 Jan 2003 Posts: 5377 City: Halfway
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Posted: Nov 16, 2012 10:07 am Post subject: |
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Quote: | the only thing I'm thinking is the equipment is likely specifically designed, which means any likely buyers would probably want to keep all of that. |
I would say that there isn't a piece of technology or equipment in the bakery business that is proprietary enough to come close to the labor/legacy costs that Hostess had to make this true. _________________ Is President Obama a Keynesian? |
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pyrocasto PityDaFool Who Posts This Much
Joined: 29 Aug 2003 Posts: 5291 City: hendersonville
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Posted: Nov 16, 2012 10:21 am Post subject: |
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I remember when Delphi was having trouble, my uncle had worked there 28 years. They asked the unions to accept pay cuts, which they didnt, and months later bankruptcy ensued. Unions started to help the employees from being screwed by the companies, but now days only help the employees to screw the companies.
Being in the cabinet business, I feel sorry for the other cabinet guys I've talked to who have to deal with the unions. It's ridiculous. _________________
eeven73 wrote: |
At least 50% of the population is retarded so I discount what they think or feel automatically. |
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vette74 Wakeboarder.Commie
Joined: 30 Jul 2003 Posts: 2144 City: Houston
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Posted: Nov 16, 2012 10:27 am Post subject: |
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I am working with a client right now that they are sick of the unions running their company with approx 1500 employees in Pennsylvania. So they are moving there entire operation down here in Houston, we are designing the first building now once it is built they will start operations here. At that point they will offer all their employees jobs in Houston for their non-union shop if they do not want to move locations an to a non-union shop their positions will be terminated. _________________ There'll be two dates on your tombstone/ And all your friends will read 'em/ But all that's gonna matter is that little dash between 'em... |
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Nor*Cal Ladies Man
Joined: 12 Jan 2003 Posts: 9479 City: Sac
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Posted: Nov 16, 2012 10:29 am Post subject: |
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Not all unions operate in this fashion so I do not think you can cast that broad net. In this case criticism is deserved and generally when talking about public employee unions who extract concessions regardless of the economic state of the public.
To be honest Hostess going under does not surprise me. I don't think I have ever bought a twinkie and haven't had a ho-ho since I traded a soda for one in elementary school. _________________ If I agreed with you we would both be wrong. |
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Rhawn Wakeboarder.com Freak
Joined: 14 Jun 2006 Posts: 3127 City: Richmond, V to the Izzay
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eeven73 PityDaFool Who Posts This Much
Joined: 16 Jan 2003 Posts: 5377 City: Halfway
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pyrocasto PityDaFool Who Posts This Much
Joined: 29 Aug 2003 Posts: 5291 City: hendersonville
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Posted: Nov 16, 2012 3:57 pm Post subject: |
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I wouldnt really care when a sweets company goes under, but all the off brands of twinkies and hohos just dont compare. I might have to find one at a gas station tomorrow to have my last one. _________________
eeven73 wrote: |
At least 50% of the population is retarded so I discount what they think or feel automatically. |
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flixmaster Site Owner
Joined: 30 Oct 2003 Posts: 7487
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Posted: Nov 16, 2012 6:30 pm Post subject: |
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Maybe Obama will bail out the twinkie giant...
Bought a box of twinkies about 4 months ago just because. I can live without them but I do find it sad that a company that has been around for a long time cannot make it. _________________ Wakeskating
Ronix Wakeboards
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Rhawn Wakeboarder.com Freak
Joined: 14 Jun 2006 Posts: 3127 City: Richmond, V to the Izzay
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