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November 16, 2012

Forward!

Hostess Going Out of Business - "Most [of the 18,500] employees who lose their jobs should be eligible for government-provided unemployment benefits,"

Posted by Kate at November 16, 2012 8:12 AM
Comments

but,but,but...isn't taxing the rich(read righties)good for business? I mean,it costs me 2 bucks to run a company,and after taxes I only have a quarter left? That's good leftie business sense,so it should work? Shouldn't it?

Posted by: Justthinkin at November 16, 2012 8:25 AM

Those greedy capitalists should be shot. Thank God the benevolent Progressive Government is there to step in with 99 weeks of taxpayer FUNded gravy.
Even better, there will be over 18,000 more people to qualify for an Obamaphone!

Posted by: markon at November 16, 2012 8:26 AM

And just where do these " government-provided unemployment benefits," come from? Pixie dust? Unicorn farts? The companies that are closing or fleeing your Obambamland shores? The bird killer wind farms in Californicated? Just wondering.

Posted by: Justthinkin at November 16, 2012 8:32 AM

Another WIN for Obama!

Posted by: grok at November 16, 2012 8:37 AM

Not even Colorado and Washington can save it?

Posted by: Chris P. Bacon at November 16, 2012 8:38 AM

WONDER how all those Hostess employees in Ohio feel about this today? Is this the Change they were Hoping for?

Unions: killing those damn golden geese one at a time.

Posted by: The Phantom at November 16, 2012 8:44 AM

How old is this company, or did I miss that in the story. I've always complained about how fast our lives have become, we all live at computer speed sort of, like the decline of America has become under this adolescent administration. When good people stay home on election day, the freeseekers tear themselves away from Oprah and their Fritos for the day and vote, they vote in an Obamination like this, with his union/teacher/Hollwood help, this man child has greased the skids for Americas decline beyond anyones perceived timelines. But remember to watch 30 Rock and pick up the Examiner you winners.

Posted by: bartinsky at November 16, 2012 8:48 AM

Chickens! Home! Roost!

Posted by: oldfart at November 16, 2012 8:55 AM

Company was founded in 1930,bart.

This will play big in Obamaland,another greedy capitalist swine has smitten it's noble workers,and De Gub'mint is there to pick up the pieces with UI!

I call on President Obama to nationalize ALL industry,that's teach them capitalist pirates,and then the companies wouldn't be allowed to close!

And everyone would live happily ever after.

Goodnight,children, er... USA.

Posted by: dmorris at November 16, 2012 8:55 AM

Union bosses, doing what's best for the workers!

Did they think the Chapter 11 filing in January was the signal that they should ask for more money? Sheeesh.

Posted by: Al_in_Ottawa at November 16, 2012 8:58 AM

What's that beautiful quote again? And whose quote is that anyway?


Oh yes "elections have consequences".

Posted by: eastern paul at November 16, 2012 9:00 AM

www.google.com/hostednews/ap/article/ALeqM5j7udQ_AT9SkwZ3uL0JTgBeTLTalA?docId=8a806c3cbb614df48a0141d41f258b0e

Also the Teamsters accepted the company's latest proposal after seeing the company's books and knowing it was cuts or closing. And after the bakers' union rejected it, the Teamsters said the union should hold a secret vote on the latest offer. (That also makes me wonder if the first bakers' vote was an open one.)

Posted by: andycanuck at November 16, 2012 9:24 AM

eastern Paul, I think the quote for today is:

"Who is John Galt?"

Posted by: The Phantom at November 16, 2012 9:26 AM

Yes, those greedy union bastards wanting pensions, health benefits and competitive wages.

Hell, a company running a product line from the 30's should blame them for it's problems.

Posted by: L at November 16, 2012 9:33 AM

I think only those workers that crossed should qualify for any unemployment benefits. Striking and causing the company to shut down is tantamount to voluntarily quitting and should be treated as such.

Posted by: daryl at November 16, 2012 9:34 AM

You'd think that the union would be more interested in maintaining the workforce. Oh wait. Silly me. The union is only interested in themselves and their own paychecks. I wonder what barry and his spouse would have to say about this? After all the misses is all about healthy food and god knnows ding dongs and hoo hoos are hardly healthy food choices. Would they get a bailout maybe?

Posted by: Rick at November 16, 2012 9:39 AM

Solidarity!

Posted by: Rip VanBullwinkle at November 16, 2012 9:55 AM

I think the winner quote from the article was:

The parasite killed its Host(ess)......

Posted by: jcl at November 16, 2012 10:00 AM

I think the unions are stupid, but there are two sides to this story. Hostess went into chapter 11 a few years back, and emerged as a private company, bankrolled by private equity (PE) funds. The new PE managers demanded concessions such as wage rollbacks, etc., ostensibly so that they could upgrade and refurbish the factories. The unions acceded to those demands. Then, once payrolls were cut, the executives granted themselves huge pay rises (300% in the CEO's case), made big payments to the PE firms, and didn't invest in the business. In short, the management flat out lied to the unions.

Now, ask yourself: if your boss came to you, crying poor, saying he had to cut your pay in order to save the business, and you gave in to him, only to see him drive up the very next day in a new Ferrari, and learn that he had given himself a huge raise, how would you feel? I'd feel taken.

In any other avenue, what the management did would constitute fraud. They promised certain actions in return for concessions, and then after receiving the concessions, didn't follow through. If business had been so bad that they couldn't afford to refurbish the factories, that would be one thing. But to raise executive compensation and pay big dividends to the owners without improving the business first - I'd be pretty damn angry if I was in the union.

I've often said here that private sector unions aren't the problem they used to be, now that we're in a global economy. If UAW workers go on strike, fine - we'll just buy Toyotas and Kias instead. So the market disciplines the unions just the way it disciplines management. Now, public sector unions are a different kettle of fish, because you can't decide you want someone else to pick up your trash or police the streets. They need to be reined in, hard, lest we all go the way of Greece and San Bernardino.

Posted by: KevinB at November 16, 2012 10:00 AM

We are seeing how to fight back against the Demoncrats.Go chapter eleven. Buy back the assets at 10 cents on the dollar.Hire non union workers on a self-employed contract basis, (they have many bussiness deductions.) Pay them a little less than union rates, but let them in on some of the profit.

Posted by: kent at November 16, 2012 10:08 AM

A good parasite doesn't kill the host.

Posted by: mojo at November 16, 2012 10:16 AM

I wonder if this affects Canada?

Nothing said about the international aspect of closure.

Just wondering.

PS: Now Obama will have to come to Canada to get his Twinkies - and watch for cross border smuggling of Twinlies, lol.

Posted by: Clown Paqrty of Canada at November 16, 2012 10:19 AM

KevinB makes the best point so far. There is a lot to the story that the media leaves out, and that someone else has to find to make sense of the whole thing. I didn't know about the previous Chapter 11 filing, I didn't look into the back story, and so my initial reading of the story is to blame the unions for stupidity. How can anyone decide that no pay is better than less pay? But there is always more to it, and if the company was basically raided and gutted, then they have a good case, although some pay is still better than no pay at all. I would have started looking for work back in January though, chapter 11 is a good indicator that the company you work for isn't long for this world.

Posted by: Dwayne at November 16, 2012 10:20 AM

This is a quote from an article by David Kaplin called Hostess is Bankrupt ... Again.

In March 2012, Brian Driscoll resigned from his position as CEO.[18] Gregory Rayburn, who had been hired and named Chief Restructuring Officer only nine days earlier, assumed the leadership position. Fortune reported that unions within the organization had been unhappy with Driscoll's proposed compensation package of $1.5 million, plus cash incentives and a $1.95 million "long term compensation" package. Additionally, the court had discovered that Hostess executives had received raises of up to 80% the year prior. In an effort to restore relations, Rayburn cut the salaries of the four top Hostess executives to $1, to be restored on January 1 the following year.[

It appears that the company was being looted while the employees were blamed and denied benefits. This is not a bright moment for capitalism.

Posted by: L at November 16, 2012 10:25 AM

The teamsters crossed in an effort to save the company after looking at the books. They tried to explain the situation to the Bakers Union (who called the original strike) to no avail. I may have to give the Teamsters credit on this effort here.

Posted by: daryl at November 16, 2012 10:38 AM

Ah, earth to L...highly skilled professionals always cost big bucks.
Just ask any Liberal appointee!

Posted by: William in Ajax at November 16, 2012 10:39 AM

Gee, why would a bankrupt company have to pay big bucks to keep its management around waiting for the big one to hit?

It's a mystery.

Posted by: andycanuck at November 16, 2012 10:43 AM

Look to see Hostess license their recipes out. They'll never run a bakery again.

Posted by: Half Canadian at November 16, 2012 10:48 AM

L said: "It appears that the company was being looted while the employees were blamed and denied benefits. This is not a bright moment for capitalism."

Sure it is. The company is going out of business because it can't compete. The reason it can't compete is really bad management and really stupid unions. The company goes under, the shareholders get paid, somebody buys the machines and makes bread competitively with non-union guys, frigging rent-seeking union imbeciles can't get dues out of guys with no jobs so they go hungry, its all good.

Please compare the identical situation of San Bernadino California, looted by its management and unions these last thirty years and still extorting taxes from residents at every more rapacious rates for ever declining services. At gunpoint remember, because government has the monopoly on use of force. Can't go out of business, just keeps tottering along like a rotting zombie until it collapses and gets replaced by Famine, Pestilence, War and Death. Those guys have really nice horses, I hear.

Capitalism looking pretty good in that comparison, you ask me.

Posted by: The Phantom at November 16, 2012 11:01 AM

If the unions hadn't destroyed them, the sugar cops would have.

Posted by: sweet tooth at November 16, 2012 11:15 AM

Joe Louis will be the new underground currency. A win for Canada!

Posted by: The original Rick at November 16, 2012 11:19 AM

L is quite dense. He clearly doesn't understand that no matter WHAT union goons might WANT, if the economics say otherwise, then it is otherwise. L believes in the tooth fairy as well.

Posted by: Joey at November 16, 2012 11:31 AM

So this is when the "Obama-Nation(tm)" runs off to Berlin and announces "Ich bin ein Twinkie!".

Well of course everyone knows he is a twinkie; but that is another story...

Personally, "Ich bin ein Berliner!" ( I am a jelly donut. ) has a more international and cosmopolitan feel to it. But this dude is no dead Kennedy...

So exactly when does the 'monetary curtain' fall in this American psychodrama?

No Twinkies, what's next Cheatos?

Oh yeah, its the "Cheatos" that won the election...


Cheers

Hans Rupprecht, Commander in Chief


1st Saint Nicolaas Army
Army Group “True North”

Posted by: Hans at November 16, 2012 11:40 AM

The unemployed workers have the solace of knowing their union contributions helped re-elect Obama. They should apply for jobs at the Post Office, because I'm sure he'll reward their loyalty.

Posted by: MarkD at November 16, 2012 11:41 AM

Hire non union workers on a self-employed contract basis, (they have many bussiness deductions.)

Maybe in the US, but not in Canada. RevCan has specific tests to determine whether you're an employee or an independent contractor, such as your ability to control the work done, hours worked, place of work, etc. It is highly unlikely that someone working in a factor under a supervisor of any kind would be considered a contractor.

That said, I wholly agree with the concept. I used to argue, until I realized it was futile, that ALL employees should be free, if they wish, to set up a personal corporation. I think it's highly unfair that, say, an accountant who has two main clients can write off the cost of shuttling between the two of them in his expensive car, while the schmo who has to waste 90 minutes a day on the TTC can't write off his bus pass. I thought it highly unfair that tradespeople who had to supply their own tools, like mechanics and carpenters, couldn't write off that considerable expense (I think they can now, but it's a fairly recent change), but our accounting friend can write off his PC, printer, 40 inch plasma monitor, etc.

If each person were permitted to conduct his affairs like a business, he might actually become (gasp!) more business like. It might take some jiggering of tax rates to make the change revenue neutral, but I think you'd see a burst of new investment by people in themselves, and a general increase in economic activity.

never gonna happen, though.

Posted by: KevinB at November 16, 2012 11:43 AM

Chief operating officer pay of $ 2 million for a company employing 18,000 workers is looting the company???? That's only $100 per employee. I'm sure more bosses in the same size business are paid a lot more rather than less. Remember, it's the real world, not Obamaland.

Posted by: Scar at November 16, 2012 11:47 AM

and it's about $80 / employee too much.

Posted by: the bear at November 16, 2012 12:01 PM

If each person were permitted to conduct his affairs like a business, he might actually become (gasp!) more business like.

Yes, exactly. Then get rid of a bunch of parasites, like the WCBs and the safety industry. As well as all the micky mouse 'required' courses that only benefit the parasites.

Posted by: Stradivarious at November 16, 2012 12:28 PM

I now have to watch the clip from "Zombieland" where Woodie Harelson is trying to find the last twinkie.... never thought that it was actually going to become reality... the last twinkie I mean , not zombieland USA,... but come to think of it, that may also be true, now. Mindless herds of undead voters trying to scam a meal off the healthy and productive.

Posted by: Chris at November 16, 2012 12:59 PM

A good parasite doesn't kill the host.

Why would anyone think the worker/employer relationship is parasitic? It's symbiotic. The workers trade time and effort for money; the employer uses that time and effort to (he hopes) generate enough money to provide him a return on his capital. In today's world, there are intermediaries at every step, but the basic process still applies.

But workers are not unthinking drones, and there needs to be a basic element of trust between labour and management. When that trust disappears, so does the symbiosis. Management sees labour as lazy and obstreperous; labour sees management as greedy and dishonest (which is certainly true in the Hostess case). The entire atmosphere breaks down into a toxic mess. (see, for example, Toronto's Transit Commission)

There's a game theory experiment where A is given a dollar, and told that he has to offer some of it to B, who then has the choice to either take the offered amount, or reject the deal, in which case the dollar is taken away from A. By game theory standards, A should offer B $.01; it's more than B had when they started the game and it maximizes A's return. But in practice, B's tended to reject low-ball offers; they felt insulted and preferred to punish the A's rather than accept the token amount offered. Successful deals were still in A's favour, but IIRC, they offered about $0.35-.40 to the B's.

Management at Hostess, and apparently some here, think the union should accept the $0.01 offer. But that is clearly at odds with human nature, as shown above. Most workers - not all, of course - accept that managers and execs should make more than they do, but when management cuts their wages while raising executive pay, they turn into angry B's.

In the end, it boils down to trust, which is a rapidly evaporating characteristic of our society. When I was a boy, newspaper boxes were open; if you didn't have a dime today, you put in twenty cents tomorrow. People left cash money in their milkboxes; the milkmen left milk and the change. A decade ago, people in Leamington used to leave tomatoes, corn, etc. on stands in their front yards, and buyers left cash behind. Not any more.

People used to trust their bankers. Today, Goldman Sachs offers you an account agreement that specifically says its in-house traders - who have access to more information, more quickly, than any independent trader - can and will take positions against your trade. People used to trust their government - you may not have liked Lester Pearson or Bill Davis, but I don't know anyone who's ever suggested they were corrupt. Today, almost everyone operates on the assumption that most politicians are crooks, and they are rarely disappointed. People used to trust their churches, but the revelations of widespread sex abuse by Catholic priests, and the "blowing with the wind" standards of, for example, the United Church, has pretty much eroded that. People may still believe in God and Jesus, but their earthly ministers? Not so much.

This is part of the endless human cycle. When everyone is poor, they need to work together to survive, and trust and honour are paramount virtues. As society gets richer, some people inevitably want more for themselves, and eventually the society gets so rich that those at the top of the pyramid can scarcely see the ants below, at which point greed and mendacity become more profitable than trust and decency. The society breaks up in bitter division, everyone is poor again, and the cycle starts anew.

No points for guessing where we are now.

Posted by: KevinB at November 16, 2012 1:05 PM

People used to trust their government - you may not have liked Lester Pearson or Bill Davis, but I don't know anyone who's ever suggested they were corrupt.

People used to be less dependent on their 'leaders' also. Nowadays there needs to be a rule or regulation for almost every situation because people don't know right from wrong. Or don't care...

Posted by: Stradivarious at November 16, 2012 1:38 PM

'And just where do these " government-provided unemployment benefits," come from?'

They not coming from Hostess corporate taxes, anyway.

Posted by: Cautiously Pessimistic at November 16, 2012 1:49 PM

No more Ding Dongs & Twinkies, at least Bloomberg will be happy since he'll have a little less junk food to ban.

Posted by: robw at November 16, 2012 2:52 PM

Similar to governments all around the globe, Hostess had some 'splaining to do about the level of union wages, etc. Management's standing in a ditch holding a shovel, in my mind. At the end of the day, someone must answer for the loss of Ho-Ho's. Those suckers are world class. I don't eat them often, but when I do every bite is savored. This is another indignity of age: Watching all the good stuff go belly up.

Posted by: Mazzuchelli at November 16, 2012 3:21 PM

Similar to governments all around the globe, Hostess had some 'splaining to do about the level of union wages, etc. Management's standing in a ditch holding a shovel, in my mind. At the end of the day, someone must answer for the loss of Ho-Ho's. Those suckers are world class. I don't eat them often, but when I do every bite is savored. This is another indignity of age: Watching all the good stuff go belly up.

Posted by: Mazzuchelli at November 16, 2012 3:21 PM

http://www.politico.com/news/stories/1112/83979.html

Here is an opportunity for the union to step up! They could buy the company and then try and run it for a profit while paying the union employees what they think they are worth!

Of course, they are looters and not creators. They don't know how to run a company, only how to help run a company into the ground, but I can dream.

Posted by: Dwayne at November 16, 2012 3:24 PM

In another bit of irony, the PE firm that took over the company and did the 'looting' is democrat connected, and has close ties to the teamsters which own a chunk of the PE firm. In other words, the teamsters participated in the looting. But Romney types will be blamed anyway.

Posted by: Greg at November 16, 2012 3:56 PM

And in other news, Mayor Bloomburg successfully completed a "Teebow-end-zone" during the limo ride in from the mansion.

Posted by: richfisher at November 16, 2012 4:43 PM

You can't have your cake and eat it too.

mike

Posted by: mike at November 16, 2012 7:34 PM

4mil for the CEO to lead 18,000 people. 2mil for Matt Sanchez to fail to lead 10 people. Not really looting the company. Probably underpaid as fixing that mess was impossible.

Posted by: Steve Adams at November 16, 2012 7:57 PM

4mil for the CEO to lead 18,000 people. 2mil for Matt Sanchez to fail to lead 10 people. Not really looting the company. Probably underpaid as fixing that mess was impossible.

Posted by: Steve Adams at November 16, 2012 7:57 PM

4mil for the CEO to lead 18,000 people. 2mil for Matt Sanchez to fail to lead 10 people. Not really looting the company. Probably underpaid as fixing that mess was impossible.

Posted by: Steve Adams at November 16, 2012 7:58 PM

4mil for the CEO to lead 18,000 people. 2mil for Matt Sanchez to fail to lead 10 people. Not really looting the company. Probably underpaid as fixing that mess was impossible.

Posted by: Steve Adams at November 16, 2012 7:59 PM

Yeah .... I think clicking on the POST button ONCE ought to be plenty.....

Posted by: OMMAG at November 16, 2012 8:21 PM

Maybe O can bail them out, hand over the company to Moochelle, and rename the company "Soylent Food Products".

Posted by: FactsWillOut at November 16, 2012 8:56 PM

The parasite killed the hostess.
or

Hostess Shrugged.

Posted by: FactsWillOut at November 16, 2012 9:39 PM

The big question now is how many Twinkies can you buy with Food Stamps.....

Posted by: Antenor at November 16, 2012 11:27 PM

Dwayne has written: "Here is an opportunity for the union to step up! They could buy the company and then try and run it for a profit."

We have a paper mill in town that was slowly turned to bankruptcy status due to the feather bedding and obstructionist policies of the Canadian Pulp and Paper Workers Union and their militant members.

Suddenly, faced with the prospect of closure and the loss of their jobs, the union workers banded together and invested the proceeds of their pension plan ($25K each as the minimum 'shareholder buy-in').

Since then the mill has run profitably and efficiently. With skin in the game, the former feather-bedders now make sure their co-workers are pulling their weight and co-operating in making the enterprise a success.

I've always believed that share ownership should be part of a pay packet but most employees are so risk averse that they'd rather have a few more bucks in their jeans than a stake in increasing profitablility.

Posted by: No Guff at November 16, 2012 11:47 PM

"Laid-Off Hostess Employee Forced To Look For Creme-Injecting Job Elsewhere"

http://www.theonion.com/articles/laidoff-hostess-employee-forced-to-look-for-cremei,30425/?utm_source=Twitter&utm_medium=SocialMarketing&utm_campaign=standard-post:quote:default

"The economy is tough right now, so I hope I can find another job filling cake interiors with creme,” said Brock, a veteran creme injector with more than 15 years experience injecting chocolate, vanilla, and peanut butter cremes for Hostess."

Posted by: marc in calgary at November 17, 2012 1:14 AM

Hey, it's okay - they didn't build that, remember?

Posted by: Karthanon at November 17, 2012 1:47 AM

When everyone is on food stamps, who will pay for them?

Posted by: Revnant Dream at November 17, 2012 3:00 AM

Good riddance to a junk food manufacturer that did little more than contribute to the obesity epidemic.

Posted by: north_of_60 at November 17, 2012 3:27 AM

Sure it is. The company is going out of business because it can't compete. The reason it can't compete is really bad management and really stupid unions."


This isn't bad management, this is business as usual, the Bain Capital way.

Posted by: phil at November 17, 2012 5:53 AM

"A good parasite doesn't kill the host.

Why would anyone think the worker/employer relationship is parasitic? It's symbiotic."

Ah, I see your error there, KevinB: you've equated the union with the employees.

Posted by: Ed Minchau at November 17, 2012 10:03 AM

Well, my, my. An SDA regular with an intelligent, nuanced perspective, rather than the usual Ayd Randian intellectual constipation from a phantom or an et or some entitled to their entitlements prairie plow jockey parasite. Careful now, KevinB, lest you be relegated to troll status. Independent thought is not tolerated in the small dead hive collective.

Posted by: phil at November 17, 2012 10:13 PM

Not like you Kate. You and your farm buddies live on Sask Taxpayer funded hand outs. To the tune of 6 billion last year. Civil servants are expendable.

Posted by: ok4ua at November 18, 2012 10:19 AM

18000 employees? Who cares. 25000 farmers. 6 billion. We have to help the neediest and the ones who vote tory. God helps those except for farmers the gov't helps. Explain that Kate.

Posted by: ok4ua at November 18, 2012 10:34 AM

What do you little parasites do? I don't think much worthwhile. You don't sound too bright, unemployed workers cost us a lot of money. I can't believe the 7 11 crowd on here. It's not my fault you make minimum wage. And you're happy. As I said not too smart.

Posted by: ok4ua at November 18, 2012 10:49 AM

They may have much more difficult time collecting on their DBP, which has a $2B shortfall


Pension Benefit Guaranty Corp. running $34 billion deficit

...Overall, the agency saw its long-term liabilities increase $12 billion to $119 billion, while its assets grew by $4 billion over the past year....

If the shortfalls continue, Gotbaum warned, “PBGC may face for the first time the need for taxpayer funds. That is a situation no one wants.”

In addition to its growing deficit, the PBGC said that at the end of 2010 it faced $332 billion in potential liabilities from fiscally unsound plans that could end up in its hands in the future...


www.washingtonpost.com/business/economy/pension-benefit-guaranty-corp-running-34-billion-deficit/2012/11/16/7c1a54da-303a-11e2-9f50-0308e1e75445_print.html

Hostess Brands Shutdown Highlights Looming Pension Crisis
moneymorning.com/2012/11/16/hostess-brands-shutdown-highlights-looming-pension-crisis/

Posted by: JM at November 18, 2012 4:44 PM

You know what really nmakes this story so funny? All the usual "Progressives" claiming this is some sort of evil capitalist/Bain issue never looked at who bought the company and ran it: major Democrat players!

Thats right, the owners of Hostess included Tim Collins and Dick Gephardt. Read it here:
http://www.zerohedge.com/?page=3&dlo=1%2CB%3D10&Z=728x90&_salt=2291246579&r=0

Of course this is no surprise for anyone who looked at how Soylendra was looted of $500 million in US tax dollar funded "loans" to another prominent Democrat bundler.

Posted by: Thucydides at November 18, 2012 5:30 PM

2 summers ago we should've let flooded farmers go under. Much like hostess employees. But oh no the prov gov't gave them 6 billion of my tax dollars. Why? They bought their votes. Most of them never seeded an acre. No wonder Rural Sask is all smiles.

Posted by: ok4ua at November 19, 2012 11:46 PM
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