Hostess is going out of business because it could not meet union demands, Twinkie maker Hostess asks to liquidate:
9:02AM EST November 16. 2012 – INDIANAPOLIS — Hostess Brands, maker of Twinkies, Ding Dongs and Wonder Bread said Friday that it has filed a motion in Bankruptcy Court seeking permission to close and sell its assets, including its iconic brands.
The company says it has suspended bakery operations, but deliveries will continue and Hostess retail stores will stay open to sell products already in the pipeline.
Hostess workers remained on picket lines across the country Thursday night, refusing a company ultimatum to return to work or face the liquidation of the national baker.
The company had warned it would file a motion in U.S. Bankruptcy Court to shut operations if enough workers didn’t end their weeklong strike by 5 p.m. ET Thursday.
A shutdown would result in the loss of about 18,000 jobs.
“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,” CEO Gregory Rayburn said in a letter to employees posted on the company website.
The unions deny any responsibility:
The company will now be forced to close its 33 bakeries, 565 distribution centers, 5,500 delivery routes and 570 bakery outlet stores throughout the U.S.
The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union pushed back against the Rayburn blaming the liquidation on the unions.
“The truth is that Hostess workers and their Union have absolutely no responsibility for the failure of this company. That responsibility rests squarely on the shoulders of the company’s decision makers,” Frank Hurt, BCTGM International Union President, said in a separate statement released on Wednesday.
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RIP Twinkies: “Now if unions could just do the same thing for public schools…. that’d be great!”
Ah, but remember…different deal!
Government schools enjoy a monopoly position in their market, enforced by law.
The Twinkie died of competition, which the government schools hardly allow, and economically prohibit.
Wonder Bread was the first national brand of sliced bread.
MyIQ, you will be interested to know that Dems are on both sides. Of course, the union bakers. But Insty links to a story which shows that evil private equity people trying to rescue Hostess from bankruptcy are high-profile Dems with prominent ties to the Dem establishment.
http://pjmedia.com/instapundit/157901/
There goes a plot point for the movie Zombieland
Time to stock up and freeze ’em…they will make great trade goods Real Soon Now.
No need to stock up, the Mexicans make suitable replacements which are available in your local tienda. Marinela Brand Gansitos – Pinguinos – Submarinos…
Yes, but Hostess cupcakes have/had precisely seven frosting swirls.
Hostess also makes Dolley Madison (which I always associate with A Charlie Brown Christmas).
This sounds like the argument that: “*I* didn’t kill that person, and neither did my gun – it was the bullets that did it – all 26 of them. Put the bullets on trial, not me”.
But I *do* hope Unions continue this campaign of destroying their worker’s jobs. Especially in govt and schools.
I guess the union bosses were absent that day in elementary school when they covered verbal problems in math class.
Q. “What would you rather have; an eight percent pay cut or a hundred percent pay cut?”
A. “Gimmee the hundred-it’s bigger!”
Well, that turned out to be a half-baked idea.
Too big to fail failed because hostess wasn’t on Michelle’s vaunted diet plan for all of us.
Next to go? How about Mars Corp. for all those nasty chocolate treats they make.
Unions are un-American.
Freedom to associate, and to bargain for your time, talent, skills, etc. is very American.
If private sector unions were simply subject to the same laws as other organizations, they would be fine.
Yeah – unions are all about freedom to associate… you’re funny. So why do unions oppose right to work laws? Or why do they support card check? Those are all about standing up for freedom, right? You mock yourself.
What unions want is a monopoly, just like incumbent businesses TEND to want.
As Adam Smith told us well over two hundred years ago.
But people ARE free to form associations according to our Constitution; yes or no?
And we are free to bargain…individually or as an association of individuals…for what we can offer an employer; yes or no?
And, if unions were not given special treatment in the law they would be market-players just like you or me; yes or no?
Getting back to my original position – unions are un-American – any government-enforced monopoly is counter to the freedom of association we ought to enjoy in America, yes or no? Yes, of course it is.
So any union protection via government that prevents a business from associating itself with the good and willing workers it needs to survive is counter to the freedom of association the business owner ought to enjoy in America, yes or no? Yes.
You talk out both sides of your mouth.
If a worker doesn’t like his employer, he’s free to associate with a different employer. The employer ought to have the same privilege in retaining employees.
But it is not freedom of association to leave a business bereft of workers and have the government, or the workers who left, prevent the business from acquiring new workers.
Unions are un-American.
Couldn’t deal with the questions, could you?
Actually, I reject your premise, which is that a business and its union are somehow equivalent entities.
You said: “What unions want is a monopoly, just like incumbent businesses TEND to want.”
A union is nothing like a business; while a business pushes to attract greater and greater marketshare, that has no similarity at all to a union’s push to coerce membership. Attraction is not like coercion.
A business has to compete with similar businesses. A union has no competition within the business where union membership is coerced. Free market competition is not like a closed shop union.
So your simple affirmative questions were an effort to legitimize your premise by erecting a strawman.
You appear to be new here, so let me offer a few observations so far…
You are not excessively bright. See, we agree here; “any government-enforced monopoly is counter to the freedom of association we ought to enjoy” (you), and “And, if unions were not given special treatment in the law they would be market-players just like you or me” (me).
You are not intellectually honest. I asked you direct questions you avoided to continue your rant.
You are kind of nasty. And you need to learn what a “straw man” is.
You are also an economics boob. Whether I sell my time, or my product (as in a business), I AM a market player, if as we BOTH assert NOBODY should have government favoring them. Unions and businesses are…GIVEN no favoritism in the law…PRECISELY the same.
You need to get over yourself, Rags.
You’re not half as smart as you think you are.
IF you have an argument, make it.
This is a perfect example of the parasite eventually consuming the host….er…..in this case, hostess.
The teamsters sent in an auditor and saw the reality of the situation. They adjudged that work is better than no work, and went along with the cuts. The bakers union said no, we won’t agree to cuts, we’re striking, and thus took an ax to the noses on their faces. So, another iconic American brand is dead and a minimum of 18,000 jobs are lost, not counting peripherals.
And these are the people who whine about jobs being sent overseas. DFF
Oh, yeah, about Ragsy. I almost forgot. He’s actually not even half as smart as you think he is. 🙂
https://legalinsurrection.com/2012/11/unions-kill-twinkies/comment-page-1/#comment-392156
Answer the questions. Just a yes or no, please. You can elaborate all you want after your answer.
See, the FACT is that unions are no more “unAmerican” than are businesses…or the flucking Elks Lodge…PROVIDED they are not given special treatment under the law. And businesses seek that kind of treatment, just as have the unions. It is called “human nature”, and Smith laid it all out for us in “The Wealth Of Nations”.
The successful parasite doesn’t kill the host.
Or Hostess.
LOL! Excellent! Wish I had thought of it!
Union Leader Takes No Responsibility For This.
Obama takes no responsibility for Benghazi.
I await the Liberal Media attacks on Hostess as “the greedy corporate job killers.”
I await the Liberal Media attacks on Petraeus after his testimony today.
Look for the Union Label (in the unemployment line)…
They won’t have to stand in line. Trumka and obastard will make sure they get a multitude of ballots….er…..I mean application forms delivered to their front doors.
The Leftist label directions: Demand. Destroy. Deny responsibility. Repeat.
It really stinks that Hostess is going bankrupt and 1000’s will be losing their jobs, but the health of indivuals who eat that crap will be better…
So unbelievably, pathetically WRONG. First of all, Hostess will liquidate and SELL their assets, including “Twinkies”. Some other company WILL buy the rights to “Twinkies” and they will be back on the market in no time flat.
Second, as if the availability of Twinkies is even marginally responsible for the health of any person on planet Earth.
Unbelievable that any moron would offer such idiocy.
Add this to reading. The curious cast of characters
http://www.zerohedge.com/news/2012-11-16/hostess-liquidation-curious-cast-characters-twinkie-tumbles
Old enough to remember these things as part of my every day, I can tell you for a fact, nothing was better than a mound of baloney and a pile of Miracle Whip on Wonder Bread. Wash it down with a glass of cold whole milk. Add a Twinkie chaser. Today’s kids are missing out on some of life’s best foods. Let us bow our heads in silent prayer for the loss of a icon.
Eh, he is right. Ultimately the fault lies with management…
For agreeing to unsustainable labor contracts in the first place.
In retrospect, yes.
The problem is that the baking industry, like others, has a serious over-capacity problem. The baking factories turn out more and more goodies with fewer people required to make them.
Hostess/Wonder got caught in that and couldn’t survive when the downturn hit.
Good point, doc. The union may have performed Coup de grâce, but the baking industry has been under stress for decades. In 1977 the EPA determined that Bakeries were a major source of reactive volatile organic compounds. Beginning in 1990, certain bakeries were required to install expensive pollution control equipment and monitor emissions.
Up until 2009, Hostess used to be Interstate Bakeries. In 2005, Interstate acquired Continental Bakeries and Janet Reno promptly sued them under the Anti-Trust Act. (When Reno wasn’t burning babies, she was burning bakeries.)
In 2004, Interstate filed Chapter 11 and emerged as a private company owned primarily by various financial companies.
Meanwhile, Grupo Bimbo, a Mexican Company, was buying up American bakeries. Bimbo, whose brands include Arnold, Brownberry, Freihofer’s, Stroehmann, and Sarah Lee, is now the largest bakery in America. That’s right, the biggest bakery in America is a Mexican company, and yes, they are unionized.
I note that for the most part, Bimbo is producing more healthy breads (whole grain, no high-fructose corn syrup) while Hostess kept on producing traditional white bread and junk food. NTTAWWT.
I always start from the premise that Hostess is going out of business because its customers are not buying enough Twinkies. That has to be the starting point. Then work backward and figure out WHY they are not selling enough Twinkies for the business to be viable.
One reason why they can’t sell enough Twinkies could be that their labor union contracts make Twinkies uncompetitive in the marketplace. It could also be management didn’t invest enough in new technology to maintain competitiveness. Or it could also be that consumer preferences changed and people just want fewer Twinkies.
The bottom line is that people aren’t buying enough Twinkies.
They’re closing their doors because of labor costs, plain and simple. The bakers union wouldn’t take a pay cut while other unions, such as the teamsters, agreed to it after having examined the company’s financials.
This is a perfect example of why unions are so deleterious.
I just bought the last Twinkies at my local supermarket. And a few of the last Hostess cupcakes. The girls ate them. Of course, I had a little bit of both.
When I was picking up the Twinkies this morning, a lady noticed what I was doing and asked me why I was saying these were “The Last Twinkies”. I told her what happened to the Hostess bakery and the unions.
Her jaw dropped. She had no idea that the unions were fighting Hostess Bakeries for the unspeakable crime of trying to reorganize their business in order to stay afloat. I told her the company called the unions’ bluff, and that they fell right into it. Now, the company’s going Galt.
Imagine how many more people out there have no idea that unions can and will definitely kill the goose that lays the golden eggs.
There are a lot of uninformed people out there! After all, Obama won the election so now we get to see the coming misery right before our very eyes. Just seeing the advertisements for Christmas while learning about layoffs is jolting and upsetting.
Yeah, well, I’m sort of pleased to see union people losing their jobs. Plenty of non-union people have. Redistribution of misery can be modeled into a good thing.
The down side is the loss of the company, not this particular group of workers being out of work at Christmas.
They can suck it up like good little union soldiers.
We’re in for a rough four years folks.
The administration is pro union anti business which is hardly a sound model for recovery. Hostess cannot count on help from DC and yet another business will go belly up.
Sooner or later the free stuff will dry up too and then who’s gonna get the blame?
My regret is the loss of Ding Dongs. That stings.
Golden vanilla Zingers and orange cupcakes.
Typing and eating Hostess crumb donettes as we speak.
Guess I better enjoy it while I can, my waistine will be returning to normal soon….
We still have a couple of bags of Donettes in our kitchen. But those are for the girls: I’m carb-conscious.
Unions are a 19th century solution to a 19th century problem.
Technically, I think extortion predates the 19th Century.
what is just as sad, a company needs government (court) permission to not be in business anymore.
I’ve known that to be an issue for some time but lately it really strikes me.
just one of the many reasons I have never been gutsy enough (or smart enough, or strong enough, etc) to start a business.
I would be afraid of success.
isn’t that sad?
To be honest, starting a business has been more an act of faith than anything else in this country for the last few decades. Since 2009, one can make a reasonable argument that it is an act of lunacy. My small town has 5 small businesses shut down or start the process of shutting down after election day, and those are just the ones I know personally. I’m sure there are more. Up till now it was possible to hope to ride out the Leftists. Now, they have all the levers of power [The Legislative Branch does not have the power of the purse so long as the Democrats in the Senate refuse to bring a budget up for a vote. Obama owns Chief Justice Roberts as shown by his sudden reversal on Obamacare and his ruling that the Constitution can be voided in the guise of a “tax”.] and all we can do is ride it down, and hope to survive the crash. Then, if the country survives, we can try to rebuild with new safeguards against Leftist tyrants.
Three questions for the immediate future:
1) “Who is John Galt?”
2) “Do you have a circle of friends and family for mutual support in the coming days?”
3) And possibly, “Who will be our Calvo-Sotelo?”
Subotai Bahadur
“and all we can do is ride it down, and hope to survive the crash”
There are two other things that could be done.
Someone on Twitter mentioned the irony if Bain Capitol bought out Hostess and saved 18,000 union jobs.
Lil’ Dick Trumka IS blaming Bain, even today.
The paradox is that the unions, public and private, overwhelmingly supported inflationary policies, the consequences of which justified their demands for progressive compensation. Surely they must have understood that there is no pot of gold at the end of the rainbow. It is a fairytale told to children and other naive individuals.
The Atlas Shugging has begun!
Practice saying with me “Do you give a discount for cash?”
If you pay cash and the seller chooses not to pay taxes, well…the beast will starve that much sooner.
Just a thought.
Everyone is thinking in terms of lost jobs, lost product.
What about lost tax revenue?
No, not that tax revenue, silly conservative….this:
14 May 2009
U.S. Sen. Tom Harkin said this morning that the idea of using a tax on sodas/junk food to help pay for health care reform is generating some fizz in Capitol Hill.
“It’s on the table. It could be,” Harkin said during his weekly conference call with print scribes. “And quite frankly, I’m pre-disposed (to it).
“That’s what’s making people unhealthy and obese,” he said.
Harkin rejected the notion that a government tax on food choices could play into the hands of critics trying to shoot down the broader health overhaul.
Actually, Harkin said, all the tax would do is help us listen to our “DNA.” Harkin says we’re all wired genetically to be healthy, but our sugar-coated society steers us to make bad choices. A tax hike, he contends, would help rewire our Twinkie-centric social structure.
The Irving, Texas-based company had already reached a contract agreement with its largest union, the International Brotherhood of Teamsters. But thousands of members in its second-biggest union went on strike late last week after rejecting in September a contract offer that cut wages and benefits.
I wonder how the Teamsters feel about this. The Teamsters approved the new contract, but their brother and sisters in the bakers union held out and have now cost a bunch of Teamsters their jobs, and by extension, a lot of cold, hard cash from the union dues the Teamsters would have collected.
The teamsters are pissed.
ck.my blog for another possible suspect in the Twinkies Demise
http://edwardcropper.blogspot.com/
The Quote on your blog you cite that begins with “The danger to America…”
The unkown source is Mark Steyn.
Quote from a comments forum to which I subscribe:
“Hostess Shrugged”
“parasite kills the Hostess”
Reminds me of a line from “The Big Easy” after they’d arrested a woman for killing her husband. She said something like, “I shot him before and he never died.”
Yes, but this time he did.