Will White House bailout Hostess? Petition calls for saving Twinkies as layoffs begin

[Steve Williams]

National Monitor......

The company that makes Twinkies, Hostess Brands Inc., is reportedly preparing to shutter its factories, leaving thousands of workers without jobs just as the holiday season kicks into full swing.

The company, which announced its intention to shutter its plants earlier this month, on Wednesday was granted approval to begin liquidating assets. The announcement followed attempts by company to reach a deal with the Hostess’ bakers union on Tuesday. Judge Robert Drain on Wednesday approved the company’s request to shut down its business and sell assets and fire nearly 20,000 employees. Judge Drain presided over a confidential mediation session with Hostess and the bakers union, which he said they participated in with good faith.

“The fact that they were not able to reach agreement does not indicate anything to the contrary,” he said. “It’s a free country, and so people are free not to agree.”

With 18,500 workers, Hostess has twelve different unions, which has about 5,600 members on the bread and snack item production lines, and the International Brotherhood of Teamsters, which represents about 7,500 route sales representatives, drivers and other employees.

Hostess Brand Inc. expressed remorse for having to eliminate the nearly 20,000 employees, saying the move was necessary.

“This is a tragedy,” Hostess attorney Heather Lennox told the court. ”But the reality was that the company could not survive without those concessions.”

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” said CEO Gregory F. Rayburn in a statement on Friday morning. “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”

The announcement of the Twinkies’ demise has been met with both laughter and concern. In a piece published Wednesday, Marketplace offered up the opinion that taxpayers should step in and offer Hostess a “bailout,’ referencing the popular plan to keep the nation’s banks afloat during the Great Recession in 2008.

“An America without Twinkie would be like an America without Bank of America. If taxpayers can love bankers, what more will they do for their childhood friends, Twinkie The Kid, Fruit Pie The Magician, King Ding Dong, Captain Cup Cake, Chief Big Wheels and Happy Ho Ho?” wrote the website.

One individual even went so far as to post a petition on Whitehouse.gov titled “Nationalize the Twinkie industry.”

“We the undersigned hereby request Barack Obama to immediately nationalize the Twinkie industry and prevent our nation from losing her sweet, creamy center,” the petitioner writes.

Meanwhile, consumers all across the nation have flocked to stores in an attempt to grab the last of the bakery delights. Stores around the country as early as Monday said they had sold out Hostess Brand items. Retailing there for $4.29 for a box of ten Twinkies, one eBay seller sold a box for $59.99. Other boxes were on sale for $100 or more, according to ABC News.

Hostess filed for bankruptcy in January, its second trip to bankruptcy court since 2004. It previously emerged from restructuring in 2009 after a four-and-a-half year process. The company is now controlled by a group of investment firms, including hedge funds Silver Point Capital and Monarch Alternative Capital.

 

[Andre Marc]

National Monitor......

The company that makes Twinkies, Hostess Brands Inc., is reportedly preparing to shutter its factories, leaving thousands of workers without jobs just as the holiday season kicks into full swing.

The company, which announced its intention to shutter its plants earlier this month, on Wednesday was granted approval to begin liquidating assets. The announcement followed attempts by company to reach a deal with the Hostess’ bakers union on Tuesday. Judge Robert Drain on Wednesday approved the company’s request to shut down its business and sell assets and fire nearly 20,000 employees. Judge Drain presided over a confidential mediation session with Hostess and the bakers union, which he said they participated in with good faith.

“The fact that they were not able to reach agreement does not indicate anything to the contrary,” he said. “It’s a free country, and so people are free not to agree.”

With 18,500 workers, Hostess has twelve different unions, which has about 5,600 members on the bread and snack item production lines, and the International Brotherhood of Teamsters, which represents about 7,500 route sales representatives, drivers and other employees.

Hostess Brand Inc. expressed remorse for having to eliminate the nearly 20,000 employees, saying the move was necessary.

“This is a tragedy,” Hostess attorney Heather Lennox told the court. ”But the reality was that the company could not survive without those concessions.”

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” said CEO Gregory F. Rayburn in a statement on Friday morning. “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”

The announcement of the Twinkies’ demise has been met with both laughter and concern. In a piece published Wednesday, Marketplace offered up the opinion that taxpayers should step in and offer Hostess a “bailout,’ referencing the popular plan to keep the nation’s banks afloat during the Great Recession in 2008.

“An America without Twinkie would be like an America without Bank of America. If taxpayers can love bankers, what more will they do for their childhood friends, Twinkie The Kid, Fruit Pie The Magician, King Ding Dong, Captain Cup Cake, Chief Big Wheels and Happy Ho Ho?” wrote the website.

One individual even went so far as to post a petition on Whitehouse.gov titled “Nationalize the Twinkie industry.”

“We the undersigned hereby request Barack Obama to immediately nationalize the Twinkie industry and prevent our nation from losing her sweet, creamy center,” the petitioner writes.

Meanwhile, consumers all across the nation have flocked to stores in an attempt to grab the last of the bakery delights. Stores around the country as early as Monday said they had sold out Hostess Brand items. Retailing there for $4.29 for a box of ten Twinkies, one eBay seller sold a box for $59.99. Other boxes were on sale for $100 or more, according to ABC News.

Hostess filed for bankruptcy in January, its second trip to bankruptcy court since 2004. It previously emerged from restructuring in 2009 after a four-and-a-half year process. The company is now controlled by a group of investment firms, including hedge funds Silver Point Capital and Monarch Alternative Capital.

Another example of massively overpaid and know nothing corporate executives running a company into the ground. The NY Times laid it out.

Same thing happening at HP with that miserable wench Meg Whitman.

 

[treitz3]

I'm quite sure the same thing will happen with this petition as what happened with the petitions for states to secede from the Union. Absolutely nothing.

Tom

 

[Mosin]

...workers want to produce quality...

Ya think? I find this laughable on its face.

What we have here is an irresponsible management team who overpaid themselves, agreed to overpay the help, and at the end of the day, could not pull it off. Then, after finally coming to their senses, they couldn't get a spoiled workforce to make adequate concessions to keep the place afloat.

Have you ever been a union worker? I suspect not, but I have. It was surreal the way my co-workers thought. That place also went under, and no wonder. Oh, and quality? The mantra for union companies is "It's next shift's problem." What if the company cannot manage to fire a really, really bad worker? The simple solution is to promote him into management. I'm not joking. Maybe he finally gets fired up there, but probably not. It's all a big, sick joke.

I'm reminded of my friend, Boris, who is an immigrant from the former USSR. Although he has a PhD in Mechanical Engineering, he worked in a machine shop, and told me a story about how things worked there.

"The machine broke."
"Ok, maybe somebody fix it."
"So, we now take nice break."

...two weeks later...

"Boris, can you fix machine?"
"I need part."
"Do paperwork."

...two weeks later...

"Paperwork approved."

...three weeks later...

"Part is here."

...five minutes later...

"Machine is fixed."
"We work soon. On break now."

They had bread, though. Of course, they had to stand in line six hours to get a loaf.



Hostess, RIP.

 

[Mosin]

i have worked in factories, and major corporations, and the workers always want to do better....normally, attitudes shift due to managerial lack of talent or in some mangers defence (including before my own) inability to do anything not apporved at the highest level. Hell, i worked at a place where the plant manager can not buy a $3k item without world headquarters agreeing on it and the place made $3million PROFIT per quarter.

I never knew any legitimate company that the Union ran by the way.

I'll give you two that they may as well have run:

1) Goodyear. How they are still in business amazes me. Sex on the job is great, however...or so I hear. A lot of people who work there got all their tools for free, too. QC? Well, I don't want them on my car.

2) Republic Steel. This now defunct company was absolutely unbelievable.

I could tell you a hundred stories about that place, but I'll stop after a few.

80% of the workers did virtually nothing, except bitch, and 80% of the management followed suite. Some of the time it was about non-union shops and foreign competition. Who would have guessed?

I personally witnessed steel slabs that were destined for an oil tanker get lamination cracks welded over and ground smooth, so the sale would go through. So, how did the cracks get there? The girl paid to roll the plate neglected to do it until a foreman demanded it of her. Reluctantly she complied, but a bit late.

Another time, a worker parked an entire freight car filled with lightbulbs underneath a steel pouring platform where they all exploded. The shift foreman's solution? Move the car, and tell no one.

Still another time, a forklift driver moved a pallet filled with Monel scrap, but when he got to his destination all the scrap had fallen out. He could see it as it fell, of course. Hey, it was only a thousand pounds at four bucks a pound. (I wonder what it would be worth in 2012 dollars?)

Yet another time, I saw laborers toss all the brooms into a 2000 degree pot filled with 350 tons of molten steel, so they wouldn't have to sweep. The brooms practically vaporized.

Another time, I thought I would die when I discovered the erratic crane that I was working under was being operated by a fat guy smoking a joint.

I worked there for eight months, and it was a real trip. Oh, it may kill you, but free-air silica floating in streams of the early morning light is really, really pretty.

 

[Gregadd]

I switched to "Little Debbie" long ago.

 

[Whatmore]

umm... what are twinkies ?

 

[treitz3]

Good morning, Whatmore. Twinkies are a snack that over the years have become an American icon. They aren't the healthiest of snack foods and rumor has it that they last indefinitely [not true]. Here's a link to more information about Twinkies found on Wiki.

http://en.wikipedia.org/wiki/Twinkie

Tom

 

[Phelonious Ponk]

Cute.

Even with its comedic twist, the problem with this article, and most that have covered this story, is that it leaves the reader to believe the poor company was driven out of business by a strike. It would have only taken a sentence, just watch...to note that this will be the third time Hostess has filed for bankruptcy, that they have received numerous concessions from their unions, and that in the middle of it all, the CEO tripled his own salary and passed out 80% raises to many of his senior managers.

You just can't expect any objectivity from the damned anti-business liberal media these days.

Tim

 

[treitz3]

Good morning, Tim. I looked at the salaries and it got me thinking. The raises were only issued in June or July if the source of where I read this was correct and yes, they were very hefty raises. Here's my thoughts on this....and I could be way off base but hear me out. If the company had been in bankruptcy three times before and they all knew that they had a failed business model that was destined to repeat history once again, whether it be from a direct result of the unions or not, a decision was made to offer a kind of "severance" pay for senior managers that was paid prior to the company going under for the final time. Like I said, I could be wrong but I haven't seen nor read any evidence to point me to another likely scenario yet.

Tom

 

[Bill Hart]

Bad news. Management to blame for sure. Typical production mentality....increase output, decrease quality, and it shows...for example, many years ago i found little debbie "twinkies" and other stuff such as that tasted better. Twinkies would be somewhat hard, somewhat burned on the bottom, while the little debs were light and tasty.

wonderbread, hey they are also part of that group, and i happened to pick up some wonder bread hotdog buns...guess what, the slits in the buns were not centered, nor sufficiently deep, so you could not properly open the bun or get stuff to fit insided properly.

just two examples of quality failure. workers want to produce quality, but after never ending no's from management and the only thing management harping on is get product out the door, more, more, more...well....it does not take a rocket scientist

I was thinking about how you could decrease the 'quality' of Twinkies. That's scary.

 

[Steve Williams]

Hostess says it has over 100 interested buyers

By By CANDICE CHOI AP

NEW YORK (AP) — Hostess Brands Inc. says it’s in talks with more than 100 parties interested in buying its brands, which include Twinkies, Ding Dongs and Ho Hos.

Those interested parties now include at least five national retailers such as supermarkets, a banker for the company said in bankruptcy court Thursday. The process has been ‘‘so fast and furious’’ the company hasn’t been able to make the calls seeking buyers it previously intended, said Joshua Scherer of Perella Weinberg Partners.

‘‘Not only are these buyers serious, but they are expecting to spend substantial sums,’’ he said.

The update on the sale of the company’s brands came as Hostess seeks approval in U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y. to give its top executives bonuses totaling up to $1.8 million as part of its wind-down plans. The company says the incentive pay is needed to retain the 19 corporate officers and ‘‘high-level managers’’ during the liquidation process, which could take about a year.

Two of those executives would be eligible for additional rewards depending on how efficiently they carry out the liquidation. The bonuses would be in addition to their regular pay.

The bonuses do not include pay for CEO Gregory Rayburn, who was brought on as a restructuring expert earlier this year. Rayburn is being paid $125,000 a month.

Hostess is also seeking final approval for its wind-down, which was approved on an interim basis last week.

The bakers union, Hostess’ second-largest union, is asking the judge to appoint an independent trustee to oversee the liquidation, saying that the current management ‘‘has been woefully unsuccessful in its reorganization attempts.’’

The wind-down process includes the quick sale of Hostess brands, which also include CupCakes, Donettes and Wonder Bread. Hostess had already said last week that it received a flood of interest from potential buyers, including from national packaged food makers, international companies and its own customers, which include supermarkets and big-box retailers. Hostess sales have been declining over the years, but still come in at between $2.3 billion and $2.4 billion a year, a banker for the company said in court last week.

The company’s shuttering means loss of about 18,000 jobs.

In court Thursday, an attorney for Hostess noted that the company is no longer able to pay retiree benefits, which come to about $1.1 million a month. Hostess stopped contributing to its union pension plans more than a year ago.

The company’s demise came after years of management turmoil, with workers saying the company failed to invest in updating its products. In January, Hostess filed for its second Chapter 11 bankruptcy in less than a decade, citing steep costs associated with its unionized work force.

Although Hostess was able to reach a new contract agreement with its largest union, the Teamsters, the bakers union rejected the terms and went on strike Nov. 9. A week later, Hostess announced its plans to liquidate, saying the strike crippled its ability to maintain normal production.

 

[jazdoc]

Washington just legalized marijuana...forget the debt ceiling, Benghazi, and Arab Spring; this issue has captured the hearts and minds of my state's residents.

 

[cjfrbw]

Like two carnivorous parasites, management at one end, unions at the other, eating the prey until nothing is left. A business model for California?

Does this mean no more twinkies murder defense?

"Legalized Marijuana prevents temporary insanity from Twinkies!"

 

[JackD201]

If only there was a way to save the jobs but kill the Twinkies......

 

[Johnny Vinyl]

I can see the Twinkie going the way of the Dodo. No self-respecting bakery would even consider get into this dog of a product. It's had it's day....time to go out to pasture.

 

[cjfrbw]

They can laminate them and use them for crowd control bullets.

 

[Johnny Vinyl]

Paintball anyone?

 

[Steve Williams]

Hostess set to announce bidder for Twinkies

By CANDICE CHOI, AP

NEW YORK — The indestructible Twinkie appears to be one step closer to a comeback.

Hostess Brands is close to announcing that it has picked two investment firms — C. Dean Metropoulos & Co. and Apollo Global Management — as the lead bidders for its Twinkies and other snack cakes, according to a source close to the situation who was not authorized to comment publicly on the talks.

The joint "stalking horse" bid would set the floor for an auction process that lets competitors make better offers. A judge would have to approve any final sale.

After years of management turmoil and turnover, Hostess declared it was going out of business and selling its brands in November. The company, based in Irving, Texas, has already announced separate lead bidders for its other brands. McKee Foods, which makes Little Debbie snack cakes, was picked as the lead bidder for Drake's cakes, which include Devil Dogs, Funny Bones and Yodels.

Flowers Foods, which makes Tastykakes and a variety of breads, was picked as the lead bidder for six of Hostess' major bread brands, including Wonder.

United States Bakery Inc. was picked as the lead bidder for a number of smaller bread brands.

Citing sources close to the situation it did not name, the Wall Street Journal reported Tuesday that the offer for Twinkies and other snack cakes by C. Dean Metropoulos and Apollo would be for more than $400 million. The report said that the deal could be disclosed as early as Tuesday. C. Dean Metropoulos owns Pabst Brewing Co.

A representative for Apollo declined to comment. A representative for C. Dean Metropoulos did not return calls for comment.

Hostess has stressed in bankruptcy proceedings that it needs to move quickly in the sale of its brands to capitalize on the outpouring of nostalgia and media coverage prompted by its demise. The longer the cakes and breads are off shelves, the more people will become accustomed to eating cakes and breads by rivals, the company has said.

 

[Steve Williams]

Twinkies due on shelves by summer as $410 million bid OK'd

By Chris Isidore @CNNMoney

Twinkies and other Hostess snacks could be back on shelves by this summer after a successful $410 million bid for the business.
The winning bid is a joint venture by private equity firms Apollo Global Management (APO) and Metropoulos & Co. A statement from Dean Metropoulos, founder of one of the firms, confirmed they are the winning bidder.

"Our family is thrilled to have the opportunity to reestablish these iconic brands with new creative marketing ideas and renewed sales efforts and investment," said Metropoulos. "We look forward to having America's favorite snacks back on the shelf by this summer. We are also ecstatic to bring jobs back to many cities across the country."
The bankruptcy court had been set to have an auction among qualified bidders on Thursday, but Hostess notified the court late Monday that no other qualified bids had been submitted. That means the $410 million bid wins by default with no further approval of the court being required.
Anthony Michael Sabino, a business school professor at St. John's University, said the lack of other bidders is no surprise, given the $410 million bid that needed to be topped.
"While the Bankruptcy Code seeks competitive bidding to increase recoveries to creditors, the law can't invent bidders," he said. "The good news is a significant amount of money to pay Hostess' creditors. The great news, Twinkies have been saved!"
Hostess had no comment on the deal beyond the filing.
Wonder Bread, Twinkies and other Hostess products have not been produced since November, when the company filed with the bankruptcy court to liquidate its business following a crippling strike by the Bakery Workers union.
But while Hostess is out of business, and most of its 18,500 employees have lost their jobs, the company has been auctioning off its various brands as part of the liquidation process.
Metropoulos has experience turning around financially troubled food brands. The firm's food holdings include Pabst Blue Ribbon beer, and in the past have included Chef Boyardee canned pasta, Bumble Bee seafood, PAM cooking spray and Gulden's Mustard, all of which it eventually sold to ConAgra Foods In. (CAG, Fortune 500)

The joint bid by Apollo and Metropoulos had been tapped in January as the lead bidder for most of Hostess' snack cake business, which includes both Hostess and Dolly Madison products, led by its iconic Twinkies brand. The bidders also bought five of the closed bakeries as part of their bid.
Flowers Foods (FLO) won most of Hostess' bread business on Feb. 28 with a $360 million bid that included the Wonder, Nature's Pride, Merita, Home Pride and Butternut bread brands, as well as 20 bakeries.
Privately held McKee Foods Corp. was tapped as the leading bidder with its $27.5 million offer for Hostess' Drake's brand and some of its equipment. Drake's products include Ring Dings, Yodels, Devil Dogs and Yankee Doodles, as well as its coffee cake. That bid is still pending.