Hostess workers strike may kill company

I meant sales.... not expand the actual business itself.

frankly, I'm kinda bored talking about this. I just hope that there isn't a significant sno-ball shortage.
 
Expanding any business without addressing the cost basis, particularly in any union contracts and prior pension and healthcare obligations, is recklessly stupid.
 
StankApe said:
I meant sales.... not expand the actual business itself.
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Still wrong. But in fairness I doubt you have much of a background in say manufacturing.

Getting rid of a few unprofitable lines reduces sales but may well put the company as a whole back into profit.
 
balrog666 said:
Expanding any business without addressing the cost basis, particularly in any union contracts and prior pension and healthcare obligations, is recklessly stupid.
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Those tend to be fairly minor issues in most cases. A least compared to working out if there is a worthwhile market and how much grounds your competitors have for reducing prices.
 
geni said:
Those tend to be fairly minor issues in most cases. A least compared to working out if there is a worthwhile market and how much grounds your competitors have for reducing prices.
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Not for Hostess.
 
I doubt that the assets of Hostess will sell for enough to cover its liabilities. The only question is how much of a haircut its lenders are going to take.

From what I've read, I believe that this was inevitable; the bakers' strike just brought it about sooner than it otherwise would have happened.
 
jhunter1163 said:
From what I've read, I believe that this was inevitable; the bakers' strike just brought it about sooner than it otherwise would have happened.
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Indeed, however, management had the option to modernize and cut some of the worst product, but instead chose to take huge salaries and leave the company broke for the second time.
 
jj said:
Indeed, however, management had the option to modernize and cut some of the worst product, but instead chose to take huge salaries and leave the company broke for the second time.
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Keep repeating that nonsense and maybe, someday, you might get someone to believe it ...
 
Meadmaker said:
There's something missing from every story I read about this strike.

I saw several references to an 8% pay cut, but I haven't seen anything about from what to what? Is is $10.00 down to $9.20, or is it $20.00 down to $18.40?

Were these overpaid workers who didn't realize how good they had it? Or were these people struggling to live a decent living for whom one more slap in the face was just too much to bear?

Putting it differently, have these workers who lost their jobs really lost anything? If these were crummy jobs, they'll find new ones, and some of the people laid off will come out much better than what they were doing at Hostess. If these were great jobs, then, maybe they should have been a bit more realistic.
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Good question, I'll have a look.


Twinkies Will Keep Coming Despite Bankruptcy by Aaron Smith

The company has about 19,000 full-time and part-time employees, including 10,413 hourly workers and 8,436 salaried workers, according to a court filing. About 83% of the employees are union members. The company said that it pays about $63.2 million to its employees per pay period, and that it currently owes them $21 million for services rendered.
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So on average $40235.556 per year. If we eyeball this curve – Distribution Of Annual Household Income In The United States – then they make maybe $30,000 a year. Hm, difficult. In a few regions of the country you might be able to survive with a family on that – rural to suburban, probably not urban.


Meadmaker said:
But the possibility exists that the Teamsters had great jobs, and the Bakers had lousy jobs. While the Teamsters would probably be angry, the Bakers really have to put the Bakers first.

So I'm just curious what sort of deal the Bakers were being offered. Is it something that most of us who don't bake Twinkies for a living would envy, or would most of us say that we wouldn't work for those wages either?


Meanwhile, the managers/owners had a choice as well. Bummer that they couldn't attract good people who were willing to work at a wage that would make the owners some money, but that's the way the Twinkie crumbles. I guess they'll have to find some other job. Some of them will have to take a pay cut, I'll guess, but that's life. Their company failed. That is, kind of by definition, a sign of bad management, so a pay cut seems appropriate. Maybe they'll do better next time.

Assuming of course that they don't make out like bandits by selling the brand names and baking facilities to other parties.
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Okay. I'll take another look.

Workers React To Hostess Closing by Chris Isidore

Mike Hummell, a receiving clerk and a member of the Bakers' union working in Lenexa, Kan., said he was making about $48,000 in 2005 before the company's first trip through bankruptcy. Concessions during that reorganization cut his pay to $34,000 last year, earning $16.12 an hour. He said the latest contract demands would have cut his pay to about $25,000, with significantly higher out-of-pocket expenses for insurance.
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An 8% overall cut in pay resulted in a 26.47% cut in the lower levels. That company failed because it was top heavy with management costs. Of course, a lot of American companies are top heavy.
 
balrog666 said:
Keep repeating that nonsense and maybe, someday, you might get someone to believe it ...
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Rather than engage in ad-hominem defamation, why don't you dig up some evidence to counter the obvious evidence in the public record. I will take it as granted that you have engaged in willful defamation unless you fully and completely provide testable, verifiable evidence for your assertion that my comment is "nonsense".

Thank you in advance for behavior in an ethical fashion.
 
jj said:
Rather than engage in ad-hominem defamation, why don't you dig up some evidence to counter the obvious evidence in the public record. I will take it as granted that you have engaged in willful defamation unless you fully and completely provide testable, verifiable evidence for your assertion that my comment is "nonsense".

Thank you in advance for behavior in an ethical fashion.
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Post a real argument and I suspect you will get many responses.

Post "crap" many times and people will just ignore you.
 
balrog666 said:
Post a real argument and I suspect you will get many responses.

Post "crap" many times and people will just ignore you.
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Thank you for stipulating that you have no evidence to support your false claim of "crap".
 
Background reading. I think someone linked to this earlier, but I can't find the post to bump.

http://management.fortune.cnn.com/2012/07/26/hostess-twinkies-bankrupt/

I know it's more fun to point fingers and say "He did it!", but the article is pretty clear that they are all villains in this story. (It dates back to before the current strike/bankruptcy scenario.)
 
Foolmewunz said:
Background reading. I think someone linked to this earlier, but I can't find the post to bump.

http://management.fortune.cnn.com/2012/07/26/hostess-twinkies-bankrupt/

I know it's more fun to point fingers and say "He did it!", but the article is pretty clear that they are all villains in this story. (It dates back to before the current strike/bankruptcy scenario.)
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Awesome article, really blows away some of the arguments made in this thread with solid facts. Thanks.
 
jj said:
So, you're ignoring how the officers of this company made out like bandits on the money "saved" from the employees, without reinvesting a thing, and how they stripped it and ripped it?
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Any evidence for these claims jj? Don't forget to show your math!
 
geni said:
Why would you describe extracting the most profitable outcome to be making something fail?
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Maybe you'll be the first person in this thread to explain how a failed company is somehow more valuable than if that same company was making a profit.
 
WildCat said:
Any evidence for these claims jj? Don't forget to show your math!
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How about you read the Fortune article I linked to so you can stop pretending to not have any information. It's got math in it, so you'll be pleased. (And it's a pretty even-handed article. Fortune's not exactly the Village Voice.)
 
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