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View Diary: Private equity-owned Hostess blames striking workers as it liquidates (263 comments)

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  •  Sorry about posting up top so late, (2+ / 0-)
    Recommended by:
    slave 357, lizah

    but here is what the Teamsters UNion just sent out over Twitter (The real reason Hostess went bankrupt):
    http://www.teamster.org/..._(00216121)_c.PDF

    While Hostess’ labor costs are higher than some of its competitors, roughly half
    of its largest competitors operate under similar union contracts and thus have similar (and, in
    many cases, higher) labor cost structures. In fact, of the 20 largest baking companies (as
    categorized by Hoover’s), 16 of these companies have some unionized employees and 9 of the
    16 have roughly comparable IBT representation to Hostess. It is my understanding that many of
    these contracts actually have better compensation and benefits than the Hostess IBT contracts
    as most of these other companies did not receive the concessions which Hostess received
    during its first bankruptcy. Furthermore, the Company’s labor costs and multi-employer
    pension plan contributions since its exit from bankruptcy in early 2009 have been more or less
    as anticipated, highlighting the fact that its current labor costs are not the primary cause of its
    current financial problems.
     
    14. During its first Chapter 11 restructuring, unionized employees provided two
    rounds of concessions to the Company, with Hostess’ Teamster-represented work force
    providing over $60 million in annualized savings (total labor savings were approximately $110
    million).  Labor costs and MEPP contributions since emergence have been right in line with
    what the Company projected in its five year business plan in February 2009.  
     In other words, had the Company met its own
    projections (as it, in fact, did for its labor costs), the Company would be generating substantial
    positive operating cash flow and would not have needed to file Chapter 11.  
    15. The reason for this significant miss is that, unfortunately for the Company and
    for its prospects for a successful restructuring, the problems are much deeper, broader and
    more complex than a simple labor cost issue. These problems require a fundamental rethinking
    of the Company’s business and capital structure in many respects.
    It's a few pages long, but well worth reading and SHARING.

    “We are not a nation that says ‘don’t ask, don’t tell.’ We are a nation that says ‘out of many, we are one.’” -Barack Obama

    by skohayes on Fri Nov 16, 2012 at 11:30:48 AM PST

    [ Parent ]

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