Hostess Brands, maker of Twinkies and Wonder Bread, is seeking bankruptcy protection, blaming its pension and medical benefits obligations, increased competition and tough economic conditions…
The privately held company, based in Irving, Texas, said it will be able to maintain routine operations thanks to a $75 million financing commitment from a group of lenders led by Silver Point Capital…
The company said it does not anticipate any disruptions in production or delivery of its breads or cake products and said its popular brands, which also include Drake’s, Ding Dongs and Ho Hos, will still be available.
Hostess said it is looking to “create a sustainable cost structure with competitive employee benefit plans.” It also hopes to modernize its systems, fleets and plants to keep pace with customer needs.
“This company has tremendous potential if we can remove the barriers to success,” Driscoll said.
Ever consider that a possible barrier to success might be continuing to produce nothing but crap food?
Good bye pension, insurance coverage, and wages.
I hope I can say it’s true Americans are finally waking up to their disgusting eating habits. No percentage of food consumed should be inedible in my opinion, though reality doesn’t always allow for such situations of lunacy to exist.
What are the odds that production will head offshore?
Why hasn’t Warren Buffet bought this company. Ithas an iconic name, sell all american food (coca cola, mc donalds) and current management has their head up their ass. It seems to me like the type of company he could get cheap and turn around. Alot like Sees Candies.
Bet the top still get the bonuses as the rest get shafted………..
Twinkies – the eternal food.
Wonderbread – wonder why they call it bread.
I regularly eat Hostess Cupcakes. About one third cake every five years: like clockwork. Given they have a shelf life of that same five years, I don’t know why I throw 2/3rds away all the time, should just wrap it and keep it for later?
But–I was thinking this was “only” about shafting the American Working Class for higher profits to the already too rich==but why not moving production off shore? Probably because the human labor to point of sale is quite low given the total automation?
My very first notion though was the calling out of higher/rising healthcare costs: an issue drowned out by the Obama Derangement Syndrome chanting the anti-Obamacare hysteria. Obamacare was passed FOR A REASON: healthcare costs OUT OF CONTROL for the past 20 years. Dumbocrap response: lets do something to control it, Puke response: lets move the business overseas.
Telling. Our politicians, commentators, analysts, public, and voters can’t tell shit from shinola.
Same as it ever was.
Who will come to the rescue of Twinkie the Kid?
I can just imagine the dialogue:
Throws a rope down the well.
Walks away to the tune of staying alive…
lol…the Red Skull says, “…with your powers and my evil brain we can take over the United States…”
After only three years of Obama, Americans cannot even afford Twinkies anymore.
Sad.
On the other hand, maybe caloric restriction due to economic necessity was Obama’s health plan all along?
I blame Michele myself.
Now if only cigarettes we’ren’t addictive.
Additionally, Hostess employees are unionized while most of its competitors aren’t.
[...]
In its filing with the U.S. Bankruptcy Court for the Southern District of New York, Hostess listed about $860 million in debt. The company’s biggest unsecured creditor is the Bakery & Confectionary Union & Industry International Pension Fund, which it owes about $944.2 million.
from http://tinyurl.com/6n3baa5
Like many companies, Hostess is finding it harder to support a growing number of retirees with a smaller number of current employees
[...]
One sticking point for the baker: It pays about $100 million a year into so-called multi-employer pension plans that cover workers at a wide array of companies, the people said. Hostess, whose pension plan is underfunded by about $2 billion, wants to rescind its obligations to that plan and start paying into a plan that only covers its own workers, one of the people said.
They pay into a multi-company fund and they are still $2B short on their own? Sounds like the multi-company fund is a scam.
In 2009 they had 32,000 employees. They now only have 19,000. And they are trying to support other companies, too.
The company grossed $2.8B in 2008 with a net loss of $144M. They are now down to $2B and losing just as much every year.
There are a lot of problems with this company. I don’t think CEO salaries and bonuses are the main contributing factor. Flat/Falling sales and the increased burden of the pension funds are the main ones.
For years the employees were told “Yes, I understand that the salary raise seems low, but you have to look at the total compensation package — your pension, your benefits AND your salary. You are really doing very well.” Having successfully deferred labor expenses by kicking the can down the road, management merrily went on their way. Only now the bills are coming due and you hear “Well, things are tough. We simply can’t afford the pensions and benefits we had hoped to. We never really promised them — if you look down at the fine print at the bottom it says the company retains the right to make changes to the plan at any time. Guess now’s the time, eh sucker?”
And no matter how much the repubs want to say it is the employee’s fault for not somehow privately taking care of their future needs and that they were foolish for believing what the company told them, you know the truth — they are going to be ripped off. The company is stealing from them — is there any other way to look at it?
Now all the wingers will whine “No, no no! You don’t understand — that is the way business works. No one’s to blame here!” I know that is the way business works — I been watching it happen for 30 years as the country embraced all the “free market!” babble (tax cuts for the rich, trickle down, NAFTA, deunionization, out-sourcing, right-sizing, global competitiveness, and all the rest). Given where we are now, it’s obvious IT DOESN’T WORK.
But all we keep hearing from the right is “We need to free the market! Kill regulations. Cut taxes!” We tried it already. It FAILED.
Since when does “doubling down” on a bad idea succeed?
There are winners here — the 1%. Meanwhile, many of the 99% want to believe if we just tweak it a little more, really give the free market a chance you know, things will just wonderfully get better. They BELIEVE. Despite what they see actually happening, despite the facts, they believe. And logic and reason and skillful arguments have never made a dent in a true believer — so here we are. And here we’ll stay.
A major problem with all pensions (including SS) is that it relies on the number of people contributing into it to continue to exceed the number of people extracting from it.
I wouldn’t put all the blame on the business owners. Sometimes the unions don’t care, they just want more and they want it now. Heck, UAW workers get 95% of their base pay if they are laid off (at least they did in the 90s). Why care if the company does well or not? You’ll get paid either way.
Of course, when a strong union forces the company to provide benefits like this, is it the company’s fault for giving them the benefits knowing where it is headed or is it the union’s fault for not listening to management when management told them where it was headed?
Who makes a better Twinkie or Ho-Ho? Where am I gonna find a superior Fruit Pie? And let’s face facts: nobody makes a Sno Ball with pink coconut like Hostess.
(pouting)
You know what is more fun than firing people?
Putting their entire company into bankruptcy!!!
Vote Republican: shove that knife right thru your own throat!!! Do it for your kiddies.
(Nice review there Dr Wally. Why can’t people, even the people directly suffering the direct consequences see that Republican Economics DOESN’T WORK!!!!)
Silly Hoomans.
Twinkie ingredients:
Enriched wheat flour, sugar, corn syrup, niacin, water, high fructose corn syrup, vegetable and/or animal shortening – containing one or more of partially hydrogenated soybean, cottonseed and canola oil, and beef fat, dextrose, whole eggs, modified corn starch, cellulose gum, whey, leavenings (sodium acid pyrophosphate, baking soda, monocalcium phosphate), salt, cornstarch, corn flour, corn syrup, solids, mono and diglycerides, soy lecithin, polysorbate 60, dextrin, calcium caseinate, sodium stearoyl lactylate, wheat gluten, calcium sulphate, natural and artificial flavours, caramel colour, yellow #5, red #40.
This cannot be good for you.
You actually bought some Twinkies™…
That is dedication, and a toxic waste of your money.
I googled the ingredients for twinkies.
Recipe for Ho Ho Pudding
Items Needed:
1 box of Ho Hos
2 pkgs chocolate pudding mix
4 cups milk
1 large tub whipped topping
DIRECTIONS:
Cut Ho Hos into circles, saving 1 Ho Ho.
Mix pudding and milk according to package pudding directions and chill until thick.
In large glass bowl, layer Ho Hos, pudding and whipped topping. Ending with whipped topping.
Take remaining Ho Ho and slice in circles and place on top. Keep refrigerated until ready to eat.
But somehow those formerly-employed peons will keep coming up with enough change to buy the lifeless crap they frittered away their lives producing for the benefit of the 1%.
Oh, America. You once had SUCH potential…….
If only they would legalize marijuana, the munchies could save this company.
I have MS and I would be able to get some medicinal MJ but no amount of MUnchies would get me to eat that crap.
Stick a fork in them (but wash it quickly and carefully because it’ll eat through stainless steel tines,) they’re done.
Twinkies Cookbook: An Inventive and Unexpected Recipe Collection
Wonder Bread Cookbook: An Inventive and Unexpected Recipe Collection
As part of Wonder Bread’s eighty-fifth anniversary celebration, Wonder put out a call for recipes, asking people to share their ideas for making more than simply sandwiches with America’s favorite brand of white bread. Fans responded with an outpouring of recipes featuring the famously soft loaf. Nearly fifty of these wonderful creations are presented in this colorful collection alongside vintage recipes cooked up for the Wonder bakery at the 1934 World’s Fair and other events. With an introduction to Wonder history and a sampling of Wonder’s wackier ad campaigns, The Wonder Bread Cookbook is a nostalgic slice of goodness for the Wonder lover in all of us.
I think a bail out is in order. Save the company with a big military contract. Even MREs expire but Twinkies just go on forever! Cupcakes have even more calories than MRE stew and weigh a lot less for the soldier to carry. Of course, with all the sugar, the soldiers might get hyper and start pissing on the enemy… oh, wait!
Well, another great model of an institutionalize American business. Blame the failure on the high cost of labor, and not on management incompetence,- which is part of the high cost of labor – cutting corners, and the neglect of product quality, all add up to a success American business who can go bankrupt as a strategy to make more money for those VIPs in the company. Money, Money, Money, as Pink Floyd would say.
So, what is your solution for ensuring these companies continue to get their pensions?
It’s easy to blame management for pissing away all the money but it’s really hard to admit that those workers put their faith in the wrong people.
I blame both.