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Farewell, Twinkies

WildCat said:
Are you claiming that the junk food market, in the USA, is shrinking????
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Well, Hostess' share of it is. But let's be clear:

http://www.theglobeandmail.com/glob...usiness-but-canada-unaffected/article5365001/

Besides lousy labour relations, Hostess has also been struggling with a consumer shift to healthier eating habits, and with high raw-materials costs.
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So, Hostess management struggles with three issues that well run companies deal with very well. The CEO blaming the union is just finger-pointing for management inadequacies.

By the way, the companies that have the rights to Hostess products in Canada, namely Saputo and Weston, are also unionized and doing just fine. I would say, as studies suggest, that good management making good business decisions is the difference. Hostess was not well managed and made very poor business decisions before and after restructuring in 2004. The studies show people prefer to work, union or non-union, for a good company that plays fair in the market and with employees.

Saputo is looking at acquiring some of Hostess's facilities and products to help with their continued expansion into the US market. Weston isn't interested because all they want is Wonder which they already have the rights to. It's a big seller for them.
 
WildCat said:
You've just proved it does follow. Why do you think they had so many CEOs? What sort of CEO would you get for the price of the failed initial CEO?
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So, you are saying by tripling the wage of the CEO Hostess was on the road to success. Well, let's fact check that one:

Twinkies-maker Hostess going out of business

Fail!

You are saying that CEO pay should not be increased, yes?
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Not at all, but I am saying that said CEO turning around and blaming the unions that took pay cuts for the companies failure is nothing more than a smoke screen to hide his (I assume) own incompetence.

So unions can only get credit when things go well for a company, but bear no responsibility when things don't go well?
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:rolleyes: When was th elast time a union got credit for a company doing well. No, it is always management that gets the credit and the big raises. And the other side of th ecoin is that it is management's fault when a company fails. Management 101: Problems and solutions all start at the top, not at the bottom.

But that's beside the point, how would you implement your ideas (whatever they are) if you were magically in charge of the corporate board in 2004? You're constrained to your current CEO or you have to hire a new one for the same price or less per your own rule. And selling equity to raise cash is also out, lest a vulture equity firm buy your rotting corpse.
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That's the big, bad world of business and if it makes you poopy in your pants you shouldn't be involved in it. Good management would never have allowed the situation to develop in the first place. The union got blamed in 2004, they took the pay cut they were told was the answer, and here they are again in 2011. It is poor management and an outdated business model because a lot of other junk food companies are doing fine, union and non-union.

Does the union model ever become outdated and unable to compete? Do rules that trucks can only carry one type of product make a company more or less competitive, for example? How about union rules that prevent consideration of an automated process that produces a superior product at lower cost than the current method, but means you only need half as many union workers as before? Does that ever become obsolete?
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It becomes obsolete when poor managers stop blaming their poor performance on the people producing the product and generating the revenue for the company.

They didn't live up to their promise, they were forced out. 6 times by your own count. You find this unacceptable, yet what alternative is there? What does qayak's hypothetical board do when the new CEO (that you hired for cheap) fails to live up to his promises?
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The definition of insanity is repeating the same action and expecting a different result. So, they change CEO six times, the company is still failing and they can't think of anything else to do but blame the union? WOW!

Should have let them die in 2004. We'll get our crap cakes from someone who knows how to run a business.
 
StankApe said:
Yes, because we all know that people have grown small and fragile due to their lack of nutrition.........

I smell a food agenda here....
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I think you really don't understand how humans work. Have you ever noticed how, when there is a recession, gang violence increases? The reason is that there are fewer dollars people can afford to spend on recreational drugs and the gangs battle to get their share and to prevent other gangs from getting more. In good times there is plenty of money to go around.

Companies can't go around shooting other companies but they also have their methods of protecting their share of the market, or at least the successful ones do.

So, there are a reduced number of dollars going into the junk food market and companies have to find ways to keep their share. There are some ways to do it and one of the big ones is to repackage your food to make it appear healthier than it is. Many companies do this, "low fat" products that have lots of fat. Low calorie salad dressing that has one less calorie/table spoon than the regular fat dressing and all, or more, salt, etc.

But you can't repackage a Twinky as being healthy. Everyone knows it is void of nutrition and is simply an exercise in delicious. And that is true about most other Hostess products including the old staple, Wonder Bread.

People are still not very knowledgeable about nutrition and healthy eating but even the most uneducated know all those Hostess treats are not healthy. Up until now Hostess has been relying on a large number of people forgetting this, and it hasn't worked.

The market changed and Hostess couldn't/didn't. Classic tale.
 
an exercise in delicious
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IMO, those words in bold on every package would have done more for the company's sales than all six CEOs at once could have ever done.
 
True story:

Took one of those Snoballs outta the package, took the "icing" off carefully- it forms a perfect half-sphere cup- and filled with gasoline.

The next day it was still full and I lit it up.

I tried the same thing with other liquids... the "icing" could probably stop a bullet.
 
Monketey Ghost said:
True story:

Took one of those Snoballs outta the package, took the "icing" off carefully- it forms a perfect half-sphere cup- and filled with gasoline.

The next day it was still full and I lit it up.

I tried the same thing with other liquids... the "icing" could probably stop a bullet.
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I do not want to be your upstairs neighbor.
 
qayak said:
I think you really don't understand how humans work. Have you ever noticed how, when there is a recession, gang violence increases? The reason is that there are fewer dollars people can afford to spend on recreational drugs and the gangs battle to get their share and to prevent other gangs from getting more. In good times there is plenty of money to go around.

Companies can't go around shooting other companies but they also have their methods of protecting their share of the market, or at least the successful ones do.

So, there are a reduced number of dollars going into the junk food market and companies have to find ways to keep their share. There are some ways to do it and one of the big ones is to repackage your food to make it appear healthier than it is. Many companies do this, "low fat" products that have lots of fat. Low calorie salad dressing that has one less calorie/table spoon than the regular fat dressing and all, or more, salt, etc.

But you can't repackage a Twinky as being healthy. Everyone knows it is void of nutrition and is simply an exercise in delicious. And that is true about most other Hostess products including the old staple, Wonder Bread.

People are still not very knowledgeable about nutrition and healthy eating but even the most uneducated know all those Hostess treats are not healthy. Up until now Hostess has been relying on a large number of people forgetting this, and it hasn't worked.

The market changed and Hostess couldn't/didn't. Classic tale.
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I don't think you understand how people work.

Gang violence increases during a recession because the amount of people depressed, downtrodden...etc increases leading to MORE drug addiction, the gangs battle for supremacy because they are better funded and not content with the status quo. It's hard to be ambitious and broke, but awfull easy to be ambitious with a few hundred grand in your pocket.

My counter to your assertion about healthiness is that nobody ever ate a hostess product under the guise of health, and being that obesity is at epidemic levels, I doubt that started now.

Like someone else said, who would buy a Hostess Salad?
 
qayak said:
So, Hostess management struggles with three issues that well run companies deal with very well. The CEO blaming the union is just finger-pointing for management inadequacies.

By the way, the companies that have the rights to Hostess products in Canada, namely Saputo and Weston, are also unionized and doing just fine. I would say, as studies suggest, that good management making good business decisions is the difference. Hostess was not well managed and made very poor business decisions before and after restructuring in 2004. The studies show people prefer to work, union or non-union, for a good company that plays fair in the market and with employees.

Saputo is looking at acquiring some of Hostess's facilities and products to help with their continued expansion into the US market. Weston isn't interested because all they want is Wonder which they already have the rights to. It's a big seller for them.
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I never claimed unionization was necessarily bad, but a union which refuses to work with management to make the company stronger and in fact hinders any efforts to be competitive (and it isn't just wages, it's archaic work rules and pensions) can bring down a company just as easily as bad management can. Hostess management may indeed have been bad, but the bakers union certainly doesn't look good in this either.
 
qayak said:
So, you are saying by tripling the wage of the CEO Hostess was on the road to success.
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Can you quote the post where I made that claim? Of course you can't, because you just made up that little strawman because you have no actual argument.

Now we're back to 2004, when the company enters bankruptcy. Do you think it's easy, or hard to find a competent CEO willing to take the helm of a bankrupt company? Do you think a competent CEO will demand more, or less, money to take on such a challenging task?
 
WildCat said:
Can you quote the post where I made that claim? Of course you can't, because you just made up that little strawman because you have no actual argument.

Now we're back to 2004, when the company enters bankruptcy. Do you think it's easy, or hard to find a competent CEO willing to take the helm of a bankrupt company? Do you think a competent CEO will demand more, or less, money to take on such a challenging task?
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Tripling the wage didn't do anything for them, all the CEOs were incompetent. So, what level of wage do you think they needed to reach to get a"competent" CEO? 10X? 20X? Maybe 100X?

Indicators are that the issue was not wages, it was the very poor management decisions to stick with an obsolete business model and blame the union when the company followed the inevitable spiral to failure.

What will happen now is that Hostess will be pieced out and sold off to companies with better management practices and better business models.

All is well with the free market system.
 
qayak said:
Tripling the wage didn't do anything for them, all the CEOs were incompetent. So, what level of wage do you think they needed to reach to get a"competent" CEO? 10X? 20X? Maybe 100X?
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Why can't you just state your position instead of making me guess what it is? As far as I can tell, you wouldn't hire any CEO for more than the one you're replacing. Is that correct? And with the money you save you'd bump the union member's weekly paycheck a quarter or 50 cents? What if he fails?

qayak said:
Indicators are that the issue was not wages, it was the very poor management decisions to stick with an obsolete business model and blame the union when the company followed the inevitable spiral to failure.

What will happen now is that Hostess will be pieced out and sold off to companies with better management practices and better business models.

All is well with the free market system.
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You keep avoiding the questions I ask you: Can unions ever cause a company to fail? Do union work rules ever become obsolete? Are pensions (as opposed to a 401(k)) a good idea these days given what we know about their track record the past century or so?

Do you think the "better business model" of the new company might include things like carrying more than one type of product per truck and automating production?
 
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Indicators are that you are coming into this with a pro union bias as you have no evidence that the present wages of the members of the various unions weren't prohibitive in allowing the company to climb out of bankruptcy. They had lost money in 30 of the prior 37 qrtrs, though sales had been pretty stable, problems were apparently food cost increases combined with labor benefits. They got an influx of $130 mill from an equity firm to try and stave off bankruptcy again, and it wasn't enough. So back they went, they tried to keep the company afloat by cutting wages , every union but one agreed. Baker's said they woul rather be right than President.

Maybe it would have worked, maybe in 6 months it would have folded anyway. But to try and act like the Union assumes no blame here is a little silly.

Are the other unions involved stupid and mismanaged? Or was the Baker's union led astray by leadership?
 
WildCat said:
Can you quote the post where I made that claim? Of course you can't, because you just made up that little strawman because you have no actual argument.
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Right here:

Why do you think they had so many CEOs? What sort of CEO would you get for the price of the failed initial CEO?
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What you are saying was that in order to ensure the success of the restructuring plan, they needed to attract a competent CEO so tripling the wage of the old CEO was justified.

Except the company still failed so it wasn't.

That's the thing that is just mind boggling to me. All the people who whine about unions, saying wage should be tied to performance and then turning around and saying something as dumb as "We have to triple the wage to get someone good as CEO!"

How about starting the CEO at what the last one made and then give him performance bonuses when the company turns around? And, just like you want to do with union workers, you slash his wage should the company sink further?

Do you think he would go for it? Neither do I. My only question is why you think the union would be stupid enough to? :rolleyes:
 
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