Twinkies........and eBay

[Mighty Favog]

http://www.ebay.com/sch/i.html?_sacat=0&_from=R46&_nkw=twinkies&_sop=3

[Boxx]

Ho Hos will be next....

[Fish]

Twinky the Kid....we need you now more that ever, God save the Ding Dongs. There was a strike, so they closed? Is that a win?

[tigerwoodKhorns]

A prophetic view of what is to come. Is this what the Mayan calendar predicted on December 21^st?

[Daddy Dee]

The Hostess store in LR announced it's closing today. Too bad. Twinkies were the bomb. From my limited reading, it's because the union and the bankruptcy court could not come to terms with each other. Any information here is appreciated. There should be some win win here somewhere.

[djk]

[tigerwoodKhorns]

The Hostess store in LR announced it's closing today. Too bad. Twinkies were the bomb. From my limited reading, it's because the union and the bankruptcy court could not come to terms with each other. Any information here is appreciated. There should be some win win here somewhere.

Here is what I found:

"The strikes began on Nov. 9, when the company imposed a contract that would cut workers' wages by 8 percent. The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) said the contract would also cut benefits by 27 to 32 percent."

I understand fighting against a company taking advantage of employees, but things are different now. I do not know anyone who has not taken a haricut in the last several years. And most people that I know do not really complain about it because we are all in the same boat. Reality has set in.

If a company is in BK, then they legitimately cannot pay the wage. There is a alot of oversight in the process and the goal is not to make sure that there is a huge profit. The company needs to be worth more than its parts. Do these workers feel that they are better off not working? They are negotiating themselves out of work.

Please keep this above board. No flame wars or ugly comments please.

[mustang guy]

Having been on the company side of union negotiations, I can tell you that the unions that represent these workers sometimes do the members a disservice by overstressing negotiations with a hurting company. I understand that this process is effective if the company is bluffing. The trouble is, most of the time the unions take for granted that everything a company does is a bluff, and they push and push. The only thing left for the company to do is simply shut down. That is what I had to do.

I don't know what the answer is. In my opinion, the disconnect between employer and employee when negotiations are on is the trouble. For the most part of life in a unionized company, there is trust and teamwork. All the sudden at contract negotiation time it is all out war. This does not benefit the company. This does not benefit employees. The only people who benefit are the unions as it is the primary tactic in their negotiation. They leave town and the workers are left behind to slowly work on that trust and teamwork.

Since my wife is a great baker, I will still have no shortage of baked goodies. I heard that the name brands were being sold off, so I don't think Twinkies and Ding Dongs are gone forever. Wonder if they start making them in China... []

[tigerwoodKhorns]

Wonder if they start making them in China...

A real possibility is Mexico.

There is good and bad on both sides. At the beginning of the last century, unions were absolutely needed to counter the horrible wrongs in the workplace, but as always, power corrupts and they have become similar to what they were fighting against (meaning their own interest over the workers).

I had to give up a really good job in the early 1990's over a strike. Great pay and benefits that are not even imaginable today (insurance for your entire family at no cost).

I do not mean to keep making points against the unions, because if they serve their function they are a good thing (until they go to far, which the same can definately be said for the companies). But here we go:

My city, one of the hardest hit by the economy, has lost some major business because of "prevailing wage." The original negotiation for prevailing wage was to ensure that workers were paid the fair wage that can be expected in the workplace (meaning not go too low). OK, fair enough, The problem, as always, is how to define the wage.

Prevailing wage was supposed to be the average of all wages in a metropolitan area. OK, so not the highest or the lowest wage, the average. Still sounds very fair. Now, here is the kicker.

The unions bargained to limit the definition to just union workers working in a very specific part of town on very high end projects (mega resorts) where the wages are at their peak. So the prevailing wage, defined as the average in a metropolitan area, is now defined as the average wage in the higheest paying area. Looks like they did a great service for the members, right? They all got paid very well, and got used to the high pay (i.e. they are now entitled to this high wage on anything that they work on). This was all fine in an unsustainable boom, because there was plenty to go around.

But the unions did not expand, and other property developers avoid anyting that requires prevailing wages (such as infrastructure financed by bonds) unless they can justify the approximately 33% increase in cost. Now, in a downturn or even in a normal economy, these workers are limited to a small amount of jobs, and other industry avoids this like the plague, so the unions are now under employed (meaning many will remain out of work even in a better economy), especially as industry avoids areas where they have to deal with prevailing wage.

So do the math, is that higher wage enough to cover long periods of unenmployment? Is the wage actually higher over the long run? I do realize that we are in a severe financial mess so things are particularly bad, but this goes much deeper.

On the plus side, the unions have been successful. Workers conditions are much better than 80 years ago, wages are higher, work days shorter, and benefits are offered by non-union companies to compete (generally). Problem is that this is no longger the goal of the unions, the goal is to extract every cent no matter what the cost.

Before I get flammed, I am also extremely appauled by Wal Mart and similar companies, which stand as disgusting examples of how badly unions are needed.

[kevinmi]

There is also more to the story than just a union strike being the reason for the company going belly up. Stiff competition, falling market share, and even the management has been been called "poor" by the Exec's of the company. Unions are usually pretty informed about how much they can bargain for, and it is easy to point the finger at the unions. I also read that there are several different unions representing the employees, and the biggest share agreed to concessions.I'm thinking it was a convienient way to close an unprofitable company and use the unions as a scapegoat.

[Boxx]

Rumor has it that Little Debbie was taking away too much of the market share for the likes of Twinkies and Ho Hos.

The quality of such Debbie treats as Devil Squares, Cosmic Brownies and the always a crowd pleaser, Oatmeal Creme Pie, was beyond the reach of the Twinkie/Ho Hos folks....

I did see the other day that Little Debbie has grown up and gets alot more exposure today....

[tigerwoodKhorns]

There is also more to the story than just a union strike being the reason for the company going belly up. Stiff competition, falling market share, and even the management has been been called "poor" by the Exec's of the company. Unions are usually pretty informed about how much they can bargain for, and it is easy to point the finger at the unions. I also read that there are several different unions representing the employees, and the biggest share agreed to concessions.I'm thinking it was a convienient way to close an unprofitable company and use the unions as a scapegoat.

I don't doubt for a second that there are two sides to this story. But if the above is true (I read that too) and they are in BK, doesn't this bolster their story that they cannot afford the benefits (meanigmn that managemnt and labor are both on a sinkign ship)? They are already in BK, a conversion to a Chapter 7 liquidation is relatively easy without needing to blame anyone.

The Teamsters examined their books, settled and issued a statement that Hostess is in bad shape and not faking it.

In any event, I really hate to see anyone lose their job. My main practice was real estate development and I got to experience all of this first hand when I worked for a company, and everyone gladly took paycuts until there was nothing left to cut. We all knew what was happening and everyone, meaning the company and employees, all shared the burden until the boat sunk.

[jhoak]

Looks like the parties involved are headed to mediation:

http://money.cnn.com/2012/11/19/news/companies/hostess-bankruptcy-bonuses/index.html?source=cnn_bin

From what I've read lately even massive concessions from the unions won't save Hostess for very long.

[oldtimer]

Workers in the US have already agreed (suffered as a necessity) to stiff wage and benefit cuts. Managements (not owners mind you) ultimately use the courts as a way to get around their failure to negotiate with their own employees. AMR executives even got agreements recently which specify that some unions are not even allowed to publicly oppose management pay and bonuses. Gee wonder why? In their minds everyone must sacrifice for the common good except them? And they were the ones who managed the companies into bankruptcy in the first place. These are managements who failed to listen to their people on the front lines. Because they think they know better. In business school I learned that "management by walking around" is one of the most effective tools for learning the best direction for your firm. Blaming the guys and girls who actually do the work of the company is nothing more than a pathetic admission of failure at the highest levels.

[Don Richard]

I feel badly for the people losing their jobs but I don't feel bad about a company that sells junk food going out of business. This garbage is marketed to children by selling them sweets that get them addicted, is a major cause of childhood obesity, and encourages poor dietary choices which lead to health problems later in life. Good riddance.

[Boxx]

Come on now.... Some kids work out and enjoy their treats...

As an example.... jacksonbart when he was younger.... (somewhere on Pluto).

[CECAA850]

I feel badly for the people losing their jobs but I don't feel bad about a company that sells junk food going out of business. This garbage is marketed to children by selling them sweets that get them addicted, is a major cause of childhood obesity, and encourages poor dietary choices which lead to health problems later in life. Good riddance.

Don't think it would go away. We'd most likely import the Chinese equivalent of a Twinkie laden with mercury.

[Don Richard]

The company was gutted over the years by hedge fund hyenas. This is usually done by piling debt onto poorly run companies and then embarking on a series of reorgs and revolving door management changes to suck the blood out of what is a corpse by then (compound interest is such a lovely thing!) Of course it is always easiest to flog the guy making $38k on a union job who has already taken a 20% pay cut, then it is to look into the shadowy figures who raid these weak companies of millions or billions of dollars. CEO drives the company into BK and gets a raise? Really? 300%?

There is an establishment storyline when it comes to the media: Unions are killing America. This storyline goes back some 40 years now already. When CNBC or the WSJ begin assailing a failed company, they of course never begins with the hedge fund hyenas, that wouldn't fit their established storyline. They begin with "outrageous union demands" and since they are the financial press, the lazy news outlets pickup the theme as they are intended to do, and simply amplify that story through their bullhorns. Heaven forbid they would do five minutes of research to find out how the company was actually gutted.

The public is predisposed to like this story, even though it is upside down. The hedge fund guys are what.....making millions and billions of dollars, while union guys are making what.....$35k? But of course, it is the guy making $35k that is "ruining the companies." Not that this makes sense financially - but that your lazy reporters don't take a minute or two with the US economic statistics and see what makes sense. Let's see now....if the poor are getting steadily poorer, and the rich are getting steadily richer.....YEAH! Let's blame that on the poor guys!

Meh