No more twinkies?!?!?!

not a Twinkie fan Herr but like the creme filled chocolate things they sell (I'm bad with names). but I don't buy them. if someone offers one I'll eat one and stop. their products are way too rich. I love chocolate too but I don't crave it. its a very rare thing I buy chocolate.

either way it would be sad to see such a recognized American brand disappear.

 
Cagey said:
I don't eat any of those brands, either. Most of them are plastic foods anyway. But, I do hate to see a major competitor go away. It reduces the pricing/quality pressures on the other suppliers, which is never good for consumers.
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True, Little Debbie and Doll M. stuff is cheap right now, but I'm sure their prices will go up. Mrs Bairds is a big manufactuer here in Texas and they've shut down a lot of production of their pies and such.
 
Not sure if this is true, but it would be ironic.. http://www.dailykos.com/story/2012/11/16/1162235/-Private-equity-owned-Hostess-blames-striking-workers-as-it-liquidates
 
Marko said:
Not sure if this is true, but it would be ironic.. http://www.dailykos.com/story/2012/11/16/1162235/-Private-equity-owned-Hostess-blames-striking-workers-as-it-liquidates
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Same as any other company, ceo's and exectutives get big bonuses even though the company is tanking, and want people who are actually doing all the work to take pay cuts and reduced benefits. They are slowly killing American icon businesses one at a time, twirling America into the shitter.. It happened to the company I worked 25yrs for...
 
It actually isn't political - at least the real difference isn't between left/right, conservative/liberal, boxers/briefs, China/USA, Europe/USA, FSU/UF... the war is between the investment capitalists, and everybody else. Just because you have money in a mutual fund doesn't really mean that "your" shares of GE or BP are going to enable you to stand up at the shareholders meetings and "speak your piece." You'd get arrested....

There's a number of fascinating (to ME) alleys to chase up, "corporate personhood" is a good start. But they have constructed an almost insoluble pickle, that is: any CEO, or board of directors, can actually be sued by the shareholders if they make any decision that will affect even the quarterly earnings, as defined by stock prices. So anything even resembling "long-term" calculations is out, and BP has to make very nuanced, careful, minefield decisions in which the price of rather massive advertising about their role in cleaning up the Gulf of Mexico is weighed against the price of actually cleaning it up; the ironclad entwinement of our government with the most prosperous trans-national corporations is pooh-poohed at the highest levels; to keep oil as an example, ALL of our politicians, both parties, have to lie constantly about our ironclad bond with the vicious dictatorship in Saudi Arabia, because if "the Arab Spring" ever gets to Riyadh, we'll be paying the same $9.50 - $12 a gallon for gas that the rest of the world does.

(In short, the long-term prospects of our country [and our role in the world's prospects] are being decided solely on the basis of quarter-to-quarter profits.)* And the originally US-based corporations and the banks that work with them have exported this model to the rest of the globe. And the people who do have large chunks of these corporations are the only people rich enough to own newspapers and television stations, much less networks. And all your senators and congressmen know all this, and they know they're allowed to flap their arms and grumble a bit to keep the whole Republican/Democratic dog-and-pony show working, but there is a line to be toed.

Barack Obama is acceptable to these people - but remember a guy named Howard Dean, who's entire political future was buried - because he YELLED ONCE? Compared to... well just about anything everybody else did. What's interesting to me is what way this is all going to break, because *(this part) is just about a perfect example of "unsustainable."
 
Zip to do with politics. They've been in bankruptcy almost non-stop since 2004 and have seen just about every combination of White House, Senate, and House leadership possible and they continued to fail the whole time and well before that. It's not even a labor vs. business dispute that it's being made out to be, lots of companies in that industry have to weather labor as a cost of doing business. The only real political issue is of US tariffs on sugar maybe, but that's also something that affects lots of other companies. And, I'm actually not looking to sneak any politics in my post.

Hostess were done in by a combination of rising supply, production and distribution costs, an overcrowded market, falling demand for the crap snacks they make, and--as always--good old managerial ineptitude. They kept the wrong assets and bought the wrong assets. Hostess has been on the fast track to liquidation for years (but put it in terms of Twinkies and people take real notice, right?).

As far as shareholders, to clarify: Hostess is privately held today. They're owned by investment groups that make money by trying to get equity cheap, cutting costs, fighting unions (etc) to make it work. They're vultures in one sense as they'll do whatever maximizes their returns, including cannibalizing all the assets in a cash grab. But they also save some companies on occasion too. In any case, the point is that without these hedges investing, Hostess would have already been gone. No one else like Kraft or PepsiCo ponied up to rescue them as they were bleeding money. 

Labor's getting laughed at here but they knew all this. They all saw the Hostess workforce nearly halved in the last 10 years and saw them file for BK again just 10 months ago. The were also aware Hostess broke the labor agreement when they stopped paying pension benefits a year ago. These issues go back a ways.

The only thing these hedges did was throw a bunch of money at a dying company with the hopes that the unions would make relatively extreme concessions, and that they could find leadership to quickly clean up the organization. They failed badly at both and are going to be out of a lot of money for it, minus what they can recoup in liquidation. Those 18k employees were able to hang on to their jobs a while longer while Silver Point and Ripplewood lit some of their money on fire.

It wasn't any political group or investment group or labor group or diet fad that killed Hostess, despite the spin going around. Hostess killed Hostess.
 
One of the blow hard political talk shows was reducing it down to what did labor have to bitch about because all they had to do was put cream in Twinkies. 

In all likelihood, workers probably never touch the product.  Whether a company makes Twinkies, bicycles, light bulbs, brooms, widgets, etc., their overhead, business plans, profit margains are all similar.  Without a logo on the side of an 18 wheeler or building, you would never know what a company makes.  Empty trucks go in, loaded ones come out.  In between, guys drive forklifts, men with weight belts move 55 gallon drums of chemicals around, and people with hair nets poor 80 lb bags of powder into vats.
 
And most of them knew next to nothing about it a week ago. Suddenly they find themselves having to lead their broadcast with Twinkies and need to pick a side that appeals to their audience.

All that happened here is that a few investment companies took a shot on Hostess and lost. They figured there was enough chance in getting the unions to make the drastic concessions to save their jobs to make it worthwhile gamble, and tried to sweeten the pot by offering the unions a huge stake in the company. They asked for relatively large concessions here though, and that's after giving up concessions in the last go-around. Some of them were already down for an 8 percent pay cut and heavily cut benefits. With a company in the shape they were, I imagine lots of people working there were thinking about how their UI might be affected.

This happens constantly. Some unions go for it and the company makes the right changes, and it works out. Company survives and investors bank cash. Sometimes not. But the only companies that find themselves here are the ones in trouble in the first place.

 
Now today there are reports that Sun Capital wants to buy the company and retain the factories/employees, and now Hostess wants to reconsider liquidation.

This is a standard play, and Sun's announced interest is designed to keep the workers on strike (in hopes of new better ownership) and drive the acquisition price down. Hostess might still liquidate in auction anyway, but that's not completely up to them in bankruptcy. Sun does business very quickly even for an equity firm and would be in good position to negotiate debt and other capital providers. Looks like more of the same, we'll see if they can do better than everyone else if this doesn't completely fall through. (I'm much more familiar with Sun than some of the other equity firms involved).
 
TWINKIEGATE!

http://www.ebay.com/sch/i.html?_sacat=0&_from=R40&_nkw=hostess%20twinkies&_sop=16

http://www.lamag.com/digest-blog/2012/11/16/aaaaand-1000-twinkies-for-sale-on-craigslist


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Never forget that they're still available. (special note: little debbies are usually yummier)
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I'm a big fan of Little Debbies. Fast, easy, cheap and good. They make great midnight snacks, and cost a fraction of the Hostess offerings.
 
Well, Hostess has serious problems with its obligations to its unionized workforce, both in terms of wages and payment into pension plans.  That much is what Hostess points to, at any rate, as the primary reason it can't keep in business.  There are also issues of competence in the managerial ranks.  I will decline to opine as to the truth or falsity of any of the contentions made by the players involved.  But it would be interesting to see what payroll costs Little Debbie and other large scale commercial bakeries vs. Hostess.
 
Mayfly said:
so how come [Little Debbie] can make money and Hostess can't?
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They're a newer company. They don't have a huge population of retirees eating pension and medical benefit money.

It's a real problem for older companies. They run their pension funds like ponzi schemes, and it gets to a point where the fresh blood can't support the zombies so the obligations eat today's profits. Early on, there aren't many zombies so the interest alone on a pension fund stash can keep them fed. Can't happen any more. Investment ROI is pitiful these days, and productivity improvements mean there aren't as many contributors.

It's a surprisingly high percentage of the cost of new cars these days. There are literally hundreds of thousands of high-priced employees who are essentially still on the payroll, albeit at slightly reduced rates. Still, when you're paying 4 or 5 people to do 1 person's job, you're gonna have serious problems. Especially if you're competing against someone who doesn't have those costs.
 
In the good old days, it was enough to just set grandpa on a passing iceberg, or out for the wolves to snack on... unless grandpa made a concerted effort to educate himself up to the standard of tribal elder. Or, you could just keep killing the young male upstarts until there were no young male upstarts any mo'. These processes were greatly eased by the facts that people just did not live very long; King Tut died at 18 of a broken leg, Alexander died of some flu or something at 33.

Math -> when 44 is the average age of death and  you kill ONE 22-year old in warfare, either one more old guy makes it to 66 or two make it to 55. (The idea that old guys kept starting wars to kept more fresh young women available, hmmm. Kill off some young guys, then forge a truce that leaves you exactly where you were before, hmmm.). And all that lovely Biblical, Greco-Roman, and Eoropean history where brothers keep killing each other, sons slaughtered fathers and fathers slaughtered sons etc. - fo real!

And our wonderful pension plans have conspired with our wonderful advances in medicine to create a system whereby Junior has to work three full-time minimum-wage jobs, just so grandpa & grandma can play golf and go on cruises till they're 99 years old - at which point Junior may in his 40's!
 
Cigarettes seem to be doing fine, despite paying billions in taxes, lawsuits, and lobbying.  To top it off, their product doesn't increase anyone's life span, is becoming increasingly illegal to use in social settings, and have quadrupled in price in the last 20 years (more to do with taxes than product cost). 
 
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