Union Results: 3 Closed Bakeries, 627 Unemployed People

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Read more: http://www.foxnews.com/leisure/2012/11/13/twinkies-maker-hostess-closing-3-bakeries-after-strike/?intcmp=trending#ixzz2C755N4IB​

 

Well, there you have it. This will affect the lives of many more people than the 18,500 who just lost their jobs. When will these stupid, idiotic, ignorant unions and their lemming members start waking up? If you don't already despise unions, this story should make you feel differently. Damn, I hate unions.

Hostess to close, lay off 18,500 after 'crippling' union fight

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A small union's stubbornness in contract talks with Hostess is being blamed for the shutdown of one of America's snack food icons, the loss of 18,500 jobs and much-needed tax revenue from hundreds of plants and shops across the country.

The privately-held company had reached a deal with the Teamsters, but a smaller union representing bakery workers refused to agree to concessions, prompting the mass layoffs and closing down of hundreds of plants, bakeries and delivery routes. That prompted harsh words from both the company and from Teamsters officials.

"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Chief Executive Gregory Rayburn said in a statement. "Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders."
The company said it will continue to ship out its well-known products until inventory runs out.

The national strike by members of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union (BCTGM) that began last week decimated the 82-year-old company’s ability to produce and deliver products at roughly 12 of its 33 plants. The company announced earlier in the week that the ax would fall on Friday if the strikers didn’t get back to work, but the union didn’t blink. BCTGM President Frank Hurt said Thursday that the crisis was the "result of nearly a decade of financial and operational mismanagement" and charged management was scapegoating workers to allow the Wall Street investors who own Hostess to sell.

Calls seeking comment from Hurt were not returned early Friday.

The Irving, Texas-based company had already reached an agreement on pay and benefit cuts with its largest union, the International Brotherhood of Teamsters. On Thursday, Teamsters officials blasted the smaller union for not seeking a “solution” in the process or to engage in negotiations.

“The BCTGM chose a different path, as is their prerogative, to not substantively look for a solution or engage in the process,” the statement read. “BCTGM members were told there were better solutions than the final offer, although Judge Drain stated in his decision in bankruptcy court that no such solutions exist. Without complete information, BCTGM members voted by voice votes in union halls. The BCTGM reported that over 90 percent rejected the final offer and three of its units ratified the final offer.”

In a letter to employees posted on the company’s website, Rayburn said all employees would eventually lose their jobs, some sooner than others.

"Many people have worked incredibly long and hard to keep this from happening, but now Hostess Brands has no other alternative than to begin the process of winding down and preparing for the sale of our iconic brands," Rayburn’s letter read. “As you know, for many months the Company has been working with our unions, lenders and other stakeholders to reach a consensual resolution to legacy costs and labor contracts. Despite everyone’s considerable efforts to move Hostess out of its restructuring, when we began implementing the Company’s last, best and final offer, the Bakers Union chose to stage a crippling strike.”

Because the company is privately held, its financials were not available. But has struggled for several years, with some blaming America’s increasing appetite for healthier fare. The company sought concessions from employees, but instead got a costly strike that further crippled it, according to officials, who told a federal bankruptcy court it would lose up to $9.5 million from Nov. 9 to Nov. 19 in lost sales and increased costs. The company has cancelled all orders in process and said any baked goods currently in transit would be returned to shippers.

“These losses and other factors, including increased vendor payment terms contraction, have resulted in a significant weakening of the debtors’ cash position and, if continued, would soon result in the debtors completely running out of cash,” the filing read.

Hostess will now sell its popular brands like Ding Dongs, Ho Ho’s and Sno Balls, along with the closure of 565 distribution centers, 570 bakery outlet stores and roughly 5,550 delivery routes.

Lenders have agreed to allow Hostess to continue to access $75 million in financing put in place at the start of the bankruptcy cases to fund the sale and wind-down process, subject to U.S. Bankruptcy Court approval.

BCTGM workers began striking at some Hostess production facilities without notifying Teamsters officials on Nov. 9, the Teamsters said.

“This unannounced action put Teamster members in the difficult position of facing picket lines without knowing their right to honor such a line without being disciplined,” the statement continued.


Read more: http://www.foxnews.com/us/2012/11/16/hostess-brands-to-liquidate-lay-off-18500-after-crippling-union-fight/#ixzz2CPCCjUlF

 

It's easy to blame the unions for bad management decisions.

Privately held Hostess filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade. The company cited increasing pension and medical costs for employees as one of the drivers behind its latest filing. Hostess contends workers must make concessions for it to exit bankruptcy and improve its financial position.

The company, founded in 1930, is fighting battles beyond labor costs, however. Competition is increasing in the snack market, while Americans are increasingly conscious about healthful eating. Hostess also makes Dolly Madison, Drake's and Nature's Pride snacks.

At least their products will be around for the next 96 years.

 

STALE EXCUSE

Memo to Hostess: It’s not labor costs. It’s that your cakes are “cheap, unhealthy, and outmoded”
By Matt Phillips — 2 hours ago

So, Twinkie-maker Hostess Brands says it is going to liquidate, after finding itself in Chapter 11 bankruptcy, again, back in January. (It only exited its last visit to the bankruptcy penalty box in 2009.)

And on the internet there’s a lot of ironical, faux-grieving for the possible disappearance of kitsch snack cakes from people who likely haven’t eaten one in decades.

But this really is bad news, especially for the 18,500 workers who may be out of a job, not to mention the rest of the communities where the company based in Irving, Texas has operated its 33 plants.

Hostess Brands has been pointing the finger at members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which went on strike in September after rejecting a company offer that would have cut wages and benefits. Whether the union should have accepted the deal is really none of our business. The people there are the ones who would have to live with the pay, pension and health care the company was offering. If they had taken the deal, it’s possible that Hostess Brands could have continued limping along with a terrible business model for a few more years. Maybe.

But the fact that some workers refused to take another pay cut (Hostess had reached a deal with its largest union, the Teamsters) isn’t the problem. It’s a symptom of Hostess’ problem. And that problem is … the business operated by Hostess Brands.

We’re not saying anything earth-shattering here. Earlier this year, Chris Schmidt, an analyst at Euromonitor, told a trade magazine:

Hostess has failed to adapt to an evolving market. The rise of food blogs and cookbooks focusing on traditional dessert dishes, TV shows such as Cake Boss, Ace of Cakes and Cupcake Wars and the growth of baking as a popular hobby have led to a renaissance in cakes and pastries. Hostess’s brands, Schmidt argues, have lost their lustre.

“Consumer tastes are largely becoming more sophisticated and adventurous, two adjectives that absolutely no one associates with Twinkies,” he tells just-food. “Hostess’s once-iconic brands are increasingly viewed as cheap, unhealthy, and outmoded. Hostess’s flavour innovation has concentrated almost entirely on new product launches, many of which haven’t caught on well, and the company has been hesitant to make any sort of change to their top-selling brands. Add to this stasis the company sleeping through the health and wellness trends of fewer processed ingredients and lower calorie counts, and it is no wonder the company has struggled to increase sales.”

Analysts at credit rating firm Moody’s didn’t see much progress from Hostess in its fight against larger bakery companies such as Grupo Bimbo and Flowers Foods. Back in February, in an update on the baked goods industry, they wrote:

It’s likely that struggling Hostess—which filed for bankruptcy in January—will lose the most market share. Hostess is likely to come under more earnings pressure as Grupo and Flowers increase their presence and may need to sell assets to survive. Other smaller regional private label bakery companies could also see already-thin profits turns to losses if a price war breaks out or wheat prices rise.

Back in July, Fortune published a sweeping piece about the train wreck that Hostess had become. What’s stark — besides the ridiculous levels of debt the company piled up — is how little of the story discusses any effort from management to find a product base with growing demand and healthy—zing!—profit margins. Twinkies ain’t it.

Now management wants to point the finger at labor, which only underscores the fact that they were not good enough business-people to do anything other than squeeze their workers for money. Most businesses turn to another group of people to generate cash. They’re called customers.

http://qz.com/28588/memo-to-hostess...-your-cakes-are-cheap-unhealthy-and-outmoded/

 

It certainly is, especially when they're at fault. Even the Teamsters blamed the Baker's Union for not seeking a solution.

 

Let me follow this. The union was told that if they did not come back to work they would close the plants down. The union had a choice to negotiate and work or to strike. The unions did not come back to work and the management did exactly what they said they would do. Yet somehow, that is the managements fault.

 

...bama, bama, Obama, no Mitt, 'cause he's a @#$%, Obama won.

 

It's the managements fault for not treating their workers the way they should, which caused them to unionize and strike for their rights. "Silly slaves, how dare you demand respect from your employer!"

 

So now they're all out of work. What sense does that make? Now they no longer even HAVE an employer.

 

The point that you seem to miss is that the workers already took a pay and benefit cut the last time Hostess went through bankruptcy in 2009. Working through the union, they agreed to the cuts and now three years later management again blames the workers for the poor business model. I think management had ample time to turn the company around but failed. I wonder what consessions management made along the way? I believe the real problem was that nobody was buying "buggy whips" because the market had moved beyond the need for this product. You can't always save a company that is becoming obsolete. Crappy unhealthy preservative heavy snack foods just went they way of the buggy whip. Go to your own cupboard and count all of the Hostess products you have and then tell me it was the unions fault. Talking points are just so simple minded.

 

An now they have a real pay cut. Regardless of how poor the management was or was not, the current circumstances were that the plant would close if the strike continued. And so it did.

 

I read somewhere that the deal was an 8% pay cut this year. Then 3% raise, 3% raise, 3% raise, 1% raise int he next 4 years. That doesn't seem that bad compared to a 100% pay cut. Probably why the Teamsters took the deal.

 

I'd still like to know what sacrifices management agreed to.

 

Do you think Obama should bail out Hostess?

 

I think Hostess offered the unions a 25% ownership of the company and representation on the board of directors. Dunno what else. Whatever it was, it was apparently good enough for the Teamsters but not good enough for the Bakers. It must be easier to get another job as a Baker than a Teamster.

 

So they can now collect unemployment, which is taken out of their paycheck anyways, until they find another job. Amazing how that works. As a business owner myself (I own one of the regions largest resorts, employing 65 people, and 17 seasonals), I have little pity for companies whose employees are unhappy and strike. It really isn't difficult to make your employees happy if you treat them well and try to think about their situation from their perspective. Idiot conservatives like you who cut pay, do not provide benefits, and do not provide adequate pay in the first place are the problem, not the unhappy workers who try to fight for the pay they deserve. All of my full time staff get health benefits and receive a minimum hourly wage of $14.00, and I still make a profit, so why the fuck can't hostess, who, I guarantee has a much larger customer base and profit margin. If the foundation of your business is so shallow that it cannot handle bumps in the economic road, you are unfit to run a business.

 

I would imagine, when the reality of BO's "new normal" sets in, those concessions ordered by the bankruptcy judge are going to look a bit more appealing to those laid-off workers.

 

Ask the judge. He sets their pay since January.

 

For the same reason you don't own a bakery or the same reason you are not as rich as Trump. He is even in the seam business as you are.

 

I don't desire to be as rich as Trump, and my hair is still in much better shape than his . I would rather live comfortably without excess, and have employees who I can also consider friends. I would rather give back to my local community than drive a Ferrari or live in a eponymous tower, maybe because I believe in America, go figure.