Hostess to close? No more Twinkies?

[sidmand]

http://www.woai.com/news/local/story/REACT-No-more-Twinkies-Snowballs-Ho-Hos-or-Ding/MF2tx9w7Y0i7p5N_pc3RfQ.cspx

Now, granted I don't really eat any of their products anymore but it's an iconic part of my childhood!

My girl scout troop used to tour the Wonder Bread factory every year. :(

[♥ms.pacman♥]

heard about this on the news this morning. I could care less (i was never into those, even as a kid), but my DH is gonna be SO sad! If Little Debbie ever went out of business, my DH would just be devastated. LOL

[wendibird22]

Rumor has it Little Debbie wants to buy some of Hostess...they are liquidating and selling all the Hostess Brands.

[boolady]

I never liked Hostess products, even as a kid. Now Tastykakes...

[katydid1971]

I don't think my kids have ever had any of their products.

[KHF]

Ding Dongs will always be my favorite...even though I rarely buy them. I do buy the Whole Grain White Wonder Bread weekly though. I will seriously miss that if it's gone :-(

[mom3boys]

Oh, this makes me sad. I loved their products as a kid (although we mostly got Drake's Cakes rather than Hostess, but Hostess owns Drake's now).

That said, I've tried to get the kids into them and they really don't like them that much. And I tried them as an adult and they are just too sweet for me. So it really won't affect us at this point.

[elbenn]

I just heard about this. Hostess said that the baker's union wouldn't negotiate with them so they were forced to liquidate.

[gatorsmom]

So, let me get this straight. The 18,500 workers are striking and refuse to come back to work, even with the high unemployment rate, and are crippling the company so badly it is failing. Soon they will have no job at all.

I am pro-union when the unions are actually protecting employees but causing them to lose their jobs is not going to help them. What the he11 are Teamsters thinking?? This is why companies are rightfully so afraid of unions. And this is how to make more Americans anti-union. Ridiculous!

[wellyes]

Well to be fair we have not heard why the union is striking or any details, other than those from those they are negotiating against. This is all part of the negotiation process. The company is playing dirtier than the union ("these teamsters want to take away your twinkies!!") which does not make me sympathetic towards them.

[o_mom]

I knew they were close to bankruptcy a few months ago. I bought my kids some HoHos so they would know what they were. Those have a special place for me as my Grandma would always have them at her house.

[o_mom]

So, let me get this straight. The 18,500 workers are striking and refuse to come back to work, even with the high unemployment rate, and are crippling the company so badly it is failing. Soon they will have no job at all.

I am pro-union when the unions are actually protecting employees but causing them to lose their jobs is not going to help them. What the he11 are Teamsters thinking?? This is why companies are rightfully so afraid of unions. And this is how to make more Americans anti-union. Ridiculous!

It's actually not Teamsters causing the problem. It's a smaller union holding out. Teamsters is actually telling them they need to knock it off or the company will go under.

[marymoo86]

There's a plant not too far from and the news stated that the unions were balking at an 8% wage and other benefit reductions. Well 100% reduction is a bit steeper. Bolding is mine.

From the local station (http://www.wral.com/hostess-files-for-bankruptcy-shuts-down/11781223/):

The company said it had offered the 12 unions a 25 percent ownership stake, representation on its board of directors and $100 million in reorganized Hostess Brands’ debt.

Union representative Dave Hoffman acknowledged Thursday that continuing the strike will not garner a win for Hostess employees.

"Either way, they know they are going to lose," he said. "They are going to either lose their job or they are going to have to go back in there and lose their pension."

Hostess got its start in the late 1800s with the production of Drake's cakes. That sweet treat was followed by Ding Dongs, Donettes, Ho Hos, Snowballs and a variety of breads and desserts that were found in virtually every grocery store and lunchbox in America. The company had its own pavilion in the 1939 World's Fair.

Despite annual sales of $2.5 billion, the company said its current cost structure was unprofitable, largely because of union wages and pensions.

[lizzywednesday]

I knew they were close to bankruptcy a few months ago. I bought my kids some HoHos so they would know what they were. Those have a special place for me as my Grandma would always have them at her house.

They filed for bankruptcy protections in mid-June. The case summary is actually going out in our November case reporter.

I wouldn't have heard about it if I didn't work on bankruptcy treatise products that my company produces.

[kwc]

2 billion in unfunded pensions.

According to this blurb from NPR, plenty of blame to go around.
http://www.npr.org/blogs/thetwo-way/2012/11/16/165260808/no-more-twinkies-hostess-brands-is-shutting-down

[WitMom]

Oh man, I love Ho-Hos. And it is our tradition to leave Ho (Ho) Hos for Santa. Bummer.

[wendibird22]

I don't know enough to say who is most at fault or right/wrong. But I think it's sad that a company can strong arm a union (and thus its employees) by saying agree to our terms or your fired. Isn't that partly why unions exist? To help maintain fairness and equity? What's the point of unionizing then? The top hats will gain from the sale of the brand and the liquidation of the brands assets and go on to find jobs as execs of other brands. I don't see what the corporation stands to lose.

[g-mama]

The company says it doesn't have the financial resources, in its state of bankruptcy and a struggling economy, to continue on in its operations with thousands of workers on strike. I don't see it as strongarming or punitive. It's just the facts.

[wellyes]

The company says it doesn't have the financial resources, in its state of bankruptcy and a struggling economy, to continue on in its operations with thousands of workers on strike. I don't see it as strongarming or punitive. It's just the facts.
Perhaps the workers would add: Unless they agree to an 8% wage reduction, and by the way, the pension they were promised were not funded.

Lousy situation for all.

[ilfaith]

The good news is, if you start stockpiling Twinkies now, they will outlast you, your children, and your children's children.

I was always more of a Drake's girl myself. I vastly prefer Yodels to HoHos. The creme filling in the latter is far too sugary and the chocolate coating is too thick and waxy. Little Debbie Swiss Rolls pale in comparison as well. I have engaged in ample snack cake research over the years.

I am hoping that somebody steps up and buys off the Drake's division of Hostess. Save the Devil Dog! I was so excited when we moved to our new neighborhood and our nearest Publix carried Drake's products (and Tastykake as well.) Our old supermarket didn't stock either...but I think we have more transplants from the northeast where we are now.

[g-mama]

Perhaps the workers would add: Unless they agree to an 8% wage reduction, and by the way, the pension they were promised were not funded.

Lousy situation for all.

Yes, lousy situation for all.

My dh's salary goes up and down with the economy. The portion his company pays of our insurance premiums has gone down consistently for the last few years, not to mention that they just swap out the plan almost every year for a lesser one to cut costs. He can go look for another job, which he'd be unlikely to find, or realize that this is the state of things and deal.

[icunurse]

I heard that besides the pay cut, they also wanted the workers to pay a larger percentage of their healthcare costs. Hostess filed for bankruptcy twice in the past year or so. They were pretty transparent about their financial problems, from what I have read.

I don't know....I know of several people through the years at various companies who took a paycut to prevent layoffs, my DH being one of them. The company employees voted - layoffs or small paycut *for the year*. They chose paycut. And were rewarded with a nice raise back to or above the baseline at the end of the year. In tough times, you sometimes have to give a little, too. Of course, I also know someone said that she would never let her DH agree to a paycut, that a company should lay off people if they have to. I bet she wouldn't feel that way if it were HER DH being laid off, though. So, better to take a financial hit or a year or two, but have a job or be unemployed completely? I guess the unions decided better to be laid off. Maybe hoping someone will buy out Hostess and hire them all back?

[gatorsmom]

I don't know....I know of several people through the years at various companies who took a paycut to prevent layoffs, my DH being one of them. The company employees voted - layoffs or small paycut *for the year*. They chose paycut. And were rewarded with a nice raise back to or above the baseline at the end of the year. In tough times, you sometimes have to give a little, too.

And I have heard of companies that promise the nice raise when the company is doing better but then never deliver. I'm usually pro-union because I think that is the only way, in many cases that employes can really protect their interests from powerful corporations but the union looks just plain stupid here. This is a private company. And although I know nothing of the source reporting this, I'm surprised with how the media is spinning this story. The media is usually more liberal in their bias but not in this case, IMO.

[wendibird22]

So, better to take a financial hit or a year or two, but have a job or be unemployed completely? I guess the unions decided better to be laid off. Maybe hoping someone will buy out Hostess and hire them all back?

I bet a buyer would benefit from a trained workforce who already knows how to make a Twinkie and might pay nicely for that skill/experience. Who knows.

I think taking a 8% salary reduction for a year or two with the chance of getting it back in future years would've won them over. I'm guessing it was the 20% increase in healthcare expense and 0 retirement pension were the kickers. I've never heard of a company increasing their contribution to healthcare in more profitable times. It seems like once the healthcare portion starts declining it never rebounds. And I can't imagine losing my pension and taking a salary decrease at the same time.


Hostess Brands Proposal:

An immediate 8 percent wage reduction and elimination of the eight-hour work day.
Employee healthcare cost sharing 20 percent increase,
Elimination of the employees’ W-1 (retiree medigap insurance) and P-Plan (a pension supplement used to pay health and funeral costs);
Closure of additional plants (10-12) without reporting reasons to the unions.

[Ms B]

Hostess filed a previous Chapter 11 bankruptcy case back in 2004 under the lead case name of Interstate Bakeries Corporation. Hostess is the name that the reorganized entity took on after its Chapter 11 plan got completed.

Substantial pay and benefit cuts resulted from the first case. That case still is open (yes, really) and unsecured creditors have yet to receive a penny in it, even though over eight years have passed between the filings.

I work with troubled and bankrupt companies in my practice. In my line of work, it is a fact that a company that files Chapter 11 twice in eight years has bigger problems than its unions.

My guess is that the causes of the filings include competition and structural changes in the snack food market, plus a history of poor management, more than anything else, including union obligations. Blaming the unions may just be a convienent excuse to put out there to justify a difficult decision that has to be made (and probably should have been made some time ago) as part of acknowledging the company's economic realities. Because, let's face it, management certainly does not want to lose their jobs or put out a press statement that says "Yep, we lack the skills or simply cannot figure out a way to make this work."

Unfortunately, multiple filers (we call them Chapter 22s or 33s) generally cannot restructure successfully and either shut down or get bought as part of or after their bankruptcy cases (see, e.g., TWA, Anchor Glass, etc.). Fact.

It would be sad if the company shut down altogether (love those mini-donuts!!), but my experience is that a viable brand always will be attractive to a purchaser. However, if the brand is not viable, then no legal or business manuevering will be able to keep it going.

[icunurse]

And I have heard of companies that promise the nice raise when the company is doing better but then never deliver. I'm usually pro-union because I think that is the only way, in many cases that employes can really protect their interests from powerful corporations but the union looks just plain stupid here. This is a private company. And although I know nothing of the source reporting this, I'm surprised with how the media is spinning this story. The media is usually more liberal in their bias but not in this case, IMO.

Agree that that also happens. And when times get better, employees can choose to go elsewhere for better pay. Or, in this case, when they knew Hostess was on better financial footing, the union could negotiate a better contract. But, in the big picture, they chose unemployment over potential short-term negotiation. Hope it works out for them.

Even if another company takes over Hostess, and I hope they do, they might want to bring in a lot of their own people before bringing back former Hostess employees. Or not reopen every factory. So who knows how many jobs will actually be refilled. Doesn't make a lot of sense, but companies vary rarely do things that make sense...

[marymoo86]

Even if another company takes over Hostess, and I hope they do, they might want to bring in a lot of their own people before bringing back former Hostess employees. Or not reopen every factory. So who knows how many jobs will actually be refilled. Doesn't make a lot of sense, but companies vary rarely do things that make sense...

Or a new company could have lower pay and benefits - you never know. Given a lot of the trouble was due supposedly to union costs, I would expect a new company to factor that into a decision on where, when, and how to reopen.

I'm not very familiar with unions - if a buyer comes forth, would the unions have any bargaining power for terms of sale? Do they have to agree?

[kijip]

All of the iconic brands will be bought by a multinational or something. You will still be able to eat SnoBalls and Ho Hos.

I think their issues are far beyond the union mess. Even without the pension liability, it sounds like they would be back in bankruptcy at some point anyway. It's only a matter of time.

I do think that companies who deduct money for retirement funds and promise a contribution and then don't fund their pension funds adequetely are doing nothing better than stealing. I know many pension funds were hit by the recession but it sounds like it is more than just that in this case. Workers who were contributing to pension funds for decades would have every reason to be more than upset as they were doing what they thought was the right thing for their future and now its gone, along with all those years that they could have been saving on their own.

If workers won't listen to union reps and come back to work, I tend to think they have more than 1 bone to pick with the company. I doubt it's just 1 thing.

[doberbrat]

I don't think my kids have ever had any of their products.

I KNOW my kids have never had any of their products but I'll be sad to see ding dongs go. And dh loves twinkies. We buy them a few times a year and keep them as grownup deserts.

[DietCokeLover]

I heard on the news this morning, that yes, the product rights will likely be bought out by other companies, but those companies will already be bakery/ companies that will have full staff already. They will likely not incorporate any of the current Hostess employees into their already complete staff.

18,000 more out of work. It's a bad situation all around.

[AnnieW625]

I don't think my kids have ever had any of their products.

Mine haven't either although I am not opposed to them trying them. Oh they have had Donettes, but not the other products.

I do hope Little Debbie or Dolly Madison Cakes buys some of their stuff. You can't have a sports snack bar without these items.

[wellyes]

Suzie Qs. That was my favorite. I think it's awful stuff, and I am sad it is gone at the same time.