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View Diary: Hostess: the Vultures are Winning (23 comments)

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  •  That's my suspicion... (4+ / 0-)

    Hopefully the unions will challenge such a move in court and on the streets if the new owners try to reopen without the unions.

    •  I don't think owners had problem with Bakers Union (0+ / 0-)

      It's the Teamsters that even the Bakers seem to have thrown under the bus....


      In early summer of 2011, officials of the Company visited with officers of the BCTGM and made a presentation to them. Central to that presentation was the Company’s acknowledgement of what everyone in the baking industry knew; Hostess’ production costs were neither excessive nor out of line with the market but its distribution costs were – to the tune of between $80 million and $130 million annually.
      Accordingly, when advisors for the BCTGM began meeting with
      Company representatives in the late summer, continuing literally until the day before this chapter 11 filing, they made two things crystal clear: (1) they were prepared to recommend to the BCTGM leadership that it accept concessions if, but only if, the Company (a) marked its distribution costs to market, (b) established a sustainable capital structure, (c) developed a plan for new revenue, and (d) gave meaningful successorship rights to the BCTGM; and (2) it was the BCTGM advisors’ view that if these conditions were not met, BCTGM workers were likely to strike the Company, because they had lost faith in it and believed that liquidation was preferable to the death spiral the Company had created.

      Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project.

      by PatriciaVa on Fri Nov 30, 2012 at 11:09:55 AM PST

      [ Parent ]

      •  Yeah, this seems like an inter-union war. (1+ / 0-)
        Recommended by:

        Between the Teamsters and the Baker's Union.

        •  Been there, done that... (0+ / 0-)

          When Hostess (then Continental Baking) closed our Minneapolis bakery in 1987, we Minnesota Teamsters sided with the Bakers in fighting the closing. We did so in direct violation of an order from the then head of the Teamsters Bakery and Laundry division, an elder Mr. Meidel who was also head of the Chicago bakery drivers local and later thrown out of the Teamsters for corruption. He wanted us to let our driving jobs go so they'd get transferred to his local. We lost the battle for the bakery jobs, but the company caved and opened a distribution center in a Minneapolis suburb that kept 30 jobs here 'til they closed it too a decade later.

      •  Teamsters aren't the problem either... (1+ / 0-)
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        It's not the driver's wages that's hurting Hostess, it's the fuel cost and wear on the trucks! For example, they were supplying markets like eastern North Dakota out of a bakery in Billings, Montana. That thousand mile or so round trip costs darn near a thousand $$$ just in fuel... Even if the Teamster drivers worked for free it's a losing proposition.

        •  Based on the analysis that BCTGM appears to.. (0+ / 0-)

 in their joinder, Teamsters costs were "$80 million and $130 million annually" above the market, while their costs (BCTGM) were market.

          Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project.

          by PatriciaVa on Fri Nov 30, 2012 at 12:25:29 PM PST

          [ Parent ]

    •  RuralRoute - to enter bankruptcy a company (0+ / 0-)

      must have more liabilities than assets or have run out of cash. When the assets are sold they will be allocated by the court in order of their preference with the secured debt being paid first and the stockholders being paid last. How will the investors "make out like bandits" from the sale proceeds? I haven't looked at all the financial details but it would be interesting to see a list of the liabilities in order of their preference as viewed in a bankruptcy process. I just don't have a good handle on the numbers so that I can understand what is happening.

      "let's talk about that"

      by VClib on Fri Nov 30, 2012 at 06:39:12 PM PST

      [ Parent ]

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