Well, this is going to get interesting. Owner threatens to close down because of strike.

[Baitball Blogger]

It's a bread company that's an institution.

Hostess Brands/Merita threatens to close and liquidate unless enough workers end strike and resume baking

Hostess Brands Inc. said it would seek to liquidate the company this week unless enough workers stop a nationwide strike by the end of the workday Thursday and allow the maker of Wonder bread, Twinkies and Merita bread products to resume normal operations.

Members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike last Friday in response to bankruptcy court-approved pay cuts. The company, which has about 18,000 employees, including several hundred at a Merita bakery in downtown Orlando, filed for Chapter 11 bankruptcy reorganization in January.

Hostess said it would file a motion with U.S. Bankruptcy Court in White Plains, N.Y., on Friday to close shop and sell its assets if enough employees do not return to work by 5 p.m. Eastern time Thursday. If the motion is granted, Hostess said, it would begin shutting down operations as soon as next Tuesday.

Hostess Chief Executive Officer Gregory Rayburn said the company did not have the financial wherewithal to weather an ongoing strike. A union spokesman was not immediately available for comment.


http://www.orlandosentinel.com/business/os-reu-hostess-merita-strike-20121114,0,4140393.story

[Chunk]

1. Hostess workers will lose, any way you slice it

The concessions, which affect both the bakery union and Teamsters, call for cuts in wages and benefits of 27 percent to 32 percent over the five-year contract, with an immediate wage cut of 8 percent, the bakery union said. The company stopped contributing to workers' pensions last year.

http://www.orlandosentinel.com/features/consumer/sns-mct-hostess-workers-will-lose-any-way-you-slice-it-20121114,0,3065485.story

[Go Vols]

18. I

would have quit last year.

[thelordofhell]

2. Yeah, right.........it's the strike..........

Salary Increases at Hostess

Some creditors question Hostess pay raises approved in late July.

Brian Driscoll, CEO, around $750,000 to $2,550,000
Gary Wandschneider, EVP, $500,000 to $900,000
John Stewart, EVP, $400,000 to $700,000
David Loeser, EVP, $375,000 to $656,256
Kent Magill, EVP, $375,000 to $656,256
Richard Seban, EVP, $375,000 to $656,256
John Akeson, SVP, $300,000 to $480,000
Steven Birgfeld, SVP, $240,000 to $360,000
Martha Ross, SVP, $240,000 to $360,000
Rob Kissick, SVP, $182,000 to $273,008

[liberal N proud]

7. Everything in corporate America isnow about stock price and executive compensation

Companies will sell lock, stock and barrel to boost those things quarter over quarter.

Even if the business is profitable, unless its turning increased stock value, the pig at the top will swing the axe.

[RKP5637]

11. IMO it looks like the Brian Driscoll, CEO, around $750,000 to $2,550,000 should

be dumped. I don't claim to be an expert here, but from what I've heard the root cause of their problem is a lack of investment over the years in new equipment. It sounds to me like the execs are trying to milk the company at the line employees' expense. So, the ultimate is they liquidate the company and the guys at the top still make out like bandits. The outrageous salary increases for these guys is incredible for running a failing company. ... but we've seen this before. Capitalism rocks, doesn't it ...

[HiPointDem]

15. I'd have less problem with cutting workers wages if the bosses also got cut at the same percent

or more.

rarely happens. what you find when you dig is that they're often raising their own pay while cutting workers.

[Angry Dragon]

16. they should be thrown in prison for this obscenity

[ChazII]

19. Apparently the creditors made the suits have a change of mind

http://blogs.wsj.com/deals/2012/04/09/hostess-cuts-four-executives-pay-to-1-after-big-july-raises/

The union is still right and the company needs to rethink their stand.

[thelordofhell]

23. But they did this move before they declared Bankruptcy........again

They also didn't think anyone would catch it.............the CEO and EVPs are scum.............

[Baitball Blogger]

22. Hm...Looks like a fire sale.

[CaliforniaPeggy]

3. When push comes to shove...

Unless the union is very strong, they could very well suffer from this strike.

[AsahinaKimi]

4. What? Are they going to sell it to Bain Capital?

Mitt will be happy about that.

[Honeycombe8]

5. This seems like a very bad time to strike.

Their employer is in financial trouble, the country is coming out of the worst recession since the Great Depression but still struggling.... timing is everything. Maybe it was now or the contract would be for 10 years. Dunno. Still, this is a bad time. How can the employer increase the contract, if it's on the brink of bankruptcy?

[Squinch]

10. But look above at the post on the increases in executive compensation.

[Honeycombe8]

14. Ohhhhhh. How immoral THAT is. I can see why the employees are upset & striking.

What a STOOOPID thing for Hostess to do.

[Robb]

6. Oh yes, it's always the workers' fault.

The bankruptcy judge apparently didn't agree to throw out the unions' collective bargaining agreements, so now they threaten to liquidate.

Weak sauce, Hostess.

[RoxyNexus]

8. I wonder why the union and the workers don't buy the company out of bankruptcy?

Then they could get rid of the management overhead and run the business themselves.

Problem solved.

[smaug]

9. Bankruptcy judge should mandate

turning over all company assets to the union and Teamsters, throw the executives listed above in the clink for contempt of court for a minimum of 90 days. Let the unions operate the company and see who does it better.

My bet would be on the unions.

[RKP5637]

13. Those exec. salaries are outrageous for running a failing company, but we've seen the

same story play out over and over again in this mess we call capitalism.

[The Second Stone]

12. How do you go bankrupt selling Hostess snake cakes to Americans?

Seriously, this company ought to go under.

[HiPointDem]

17. WTF is wrong with management, I wonder? They've been in bankruptcy twice since 2009.

Hostess Brands, Inc.—formerly Interstate Bakeries Corporation (IBC)—is the largest wholesale baker and distributor of bakery products in the United States, and is the owner of the Hostess, Wonder Bread, Nature's Pride, Dolly Madison, Butternut Breads, and Drake's brands.

For many years it was based at 12 East Armour Boulevard, Kansas City, Missouri. After it emerged from bankruptcy in 2009 it moved to Irving, Texas.[2] It declared Chapter 11 again in 2012.[3].

On November 14, 2012, the company said that it would go into liquidation unless bakers striking in protest against a new contract imposed in bankruptcy court return to work. [4]

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

according to management, they're "not competitive" because of "legacy costs".

same old shit.

[justice1]

20. They are overpriced, In the 70's Hostess cupcakes and candy bars were both 25 cents, Twinkies 18

On the rare occasion that I purchase them, it's a box at the grocery store, which is more reasonably priced. If they brought the price down, to make them more competitive with other impulse buys in convenient stores, their sales would probably increase.

[Jbradshaw120]

21. This is happening in billings mt

And the union says their goal is to force liquidation. The union says that it is bad management. On top of that they did take a concessionary contract a few years ago and the union said the money from concessions went to management instead of equipment upgrades and repairs as the workers had expected when they accepted the take away contract. I wish these workers the best of luck. It is disgusting to see management take pay raises as they demand cuts to the workers.

[VenusRising]

24. The mayor of St. Louis was told about the closings long before the strike.

http://www.bizjournals.com/kansascity/news/2012/11/14/hostess-plant-closings-arent-tied-to.html

Someone on DU posted the bizjournal article earlier today. I wish I could remember who it was to give them credit.

I'm siding with the workers.

SOLIDARITY!!!

[cbrer]

25. Upcoming business opportunity for employee ownership! nt

[ladjf]

26. What a novel solution. nt