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Hostess to seek approval for executive bonuses


KID

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Back in the 1930's a lot of people moved even though they had no money. Have you ever heard of the dust bowl? If people want something bad enough, they will do what they have to to get it. Of course,

CEO Pay Grew 127 Times Faster Than Worker Pay Over Last 30 Years: Study     Sucks to be the little guy these days....

Having been on both sides of the fence, and been highly paid at times, in general, executive pay is EXCESSIVE.   I have no objection to high pay for anyone, IF, and only if, it is based upon results

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Well Forbes magazine has a differant view

http://www.forbes.com/sites/helaineolen/2012/11/16/who-killed-hostess-brands-and-twinkies/

 

More than a few observers say they know who to blame for the demise of the iconic company: the Bakery, Confectionary, Tobacco Workers and Grain Millers International union, which represents thousands of striking Hostess Brand workers who have refused to accept a new contract that would do everything from slash their salaries to their retirement benefits.

Time for a reality check.

Hostess has been sold at least three times since the 1980s, racking up debt and shedding profitable assets along the way with each successive merger. The company filed for bankruptcy in 2004, and again in 2011. Little thought was given to the line of products, which, frankly, began to seem a bit dated in the age of the gourmet cupcake. (100 calorie Twinkie Bites? When was the last time you entered Magnolia Bakery and asked about the calorie count?)

As if all this were not enough, Hostess Brands’ management gave themselves several raises, all the while complaining that the workers who actually produced the products that made the firm what money it did earn were grossly overpaid relative to the company’s increasingly dismal financial position.

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What killed Hostess?

 

Posted by Jon Talton

 

 

It makes a convenient fairy tale, especially in the "conservative" blogosphere, to claim that unions were behind the demise of Hostess Brands, which has announced it will wind down its operations, closing 33 bakeries and 565 distribution centers, laying off almost all of its 18,500 workers. Among the closures is the streamlined moderne building in South Lake Union familiar to generations of Seattleites.

 

The reality, naturally, is far more complicated. It is true that the company has faced a strike by the Bakery, Confectionery, Tobacco Workers and Grain Millers Union

 

But years of management missteps go along with those of the unions. Hostess has been in two Chapter 11 bankruptcy reorganization filings in recent years. The company founded as Interstate Bakeries in Kansas City, Mo., in 1930, went through a series of mergers and name changes after 1975, when it was acquired by a computer-leasing company. Management took it private, then public, then private again. "Rip, strip and flip" deals went bad. There was the obligatory move of the headquarters to an office "park" in Irving, Texas. A botched 1995 acquisition of Continental Baking caused a ruinous culture clash.

When Hostess emerged from its first Chapter 11 in 2009, unions made huge concessions and the company was controlled by private-equity outfit Ripplewood Holdings and other investors, including two hedge funds specializing in distressed companies. To further complicate a comic-strip narrative, Ripplewood is run by Tim Collins, a Democrat who wanted to explore deals with union-represented companies.

In the latest Chapter 11, the company was saddled with nearly $1 billion in debt. In addition, it was reported that while operating under Chapter 11, top executives gave themselves 80-percent raises in 2011. To be fair, a new chief executive came in last spring and cut the salaries of the four top execs to $1 (to be restored in January). Symbolism is better than nothing. A big complaint is "legacy" pensions, some $2 billion worth. The unanswered question is why were these unfunded during the good years? Executive compensation is never unfunded. When chief executives fail, their lavish golden parachutes are never unfunded.

Meanwhile, America changed. The appetite for Twinkies, Ding-Dongs, Cup Cakes, Suzy Qs and those mysterious but tasty fruit pies waned as healthier eating became popular. The Great Recession added its damage. With the workers on the street, investors will gain something back by selling off some of those trademark products, and, as the Puget Sound Business Journal reported, such coveted real estate as the South Lake Union bakery.

The best summation of the Hostess tragedy was written before the final act, last summer in Fortune. "In truth there are no black hats or white knights in this tale. It's about shades of gray, where obstinacy, miscalculation, and lousy luck connived to create corporate catastrophe."

 

http://seattletimes.com/html/soundeconomywithjontalton/2019696179_what_killed_hostess.html

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USMC-Retired

The fixer CEO the last one actually tried to save the company. 50 million in insurance to non-hostess retirees. Two trucks to deliver same store. Another truck to deliver to 7/11s vice groceries. These were two demands that needed to change. Yet no budging from the union he just did what he said come back or I close shop. The union did not believe him arrogance and stupidity on the union So who lost the18k workers. The company refused to be held hostage by demands that would not turn it around

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USMC-Retired

9 months for one dollar is not symbolic so you know how the article leans. Spring is March

 

Also Ripplewood infused 300 million into the company. That money is gone and part of the 1 billion in debt.

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whatever-- management drove this company into the ground while the workers have repeatedly taken pay cuts and the management has repeatedly given themselves pay raises

 

The workers finally had enough and said close the doors we are not letting you fuk us anymore

 

I will agree with you on INSURANCE-- this is the number one problem today for both the business's and it's employees-- it does not matter how much you are paying your employees-- if 40% of their wage goes to the insurance company

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USMC-Retired

Where would this company be if union demands of 50 million be paid to non- hostess employees for insurance

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Where would this company be if union demands of 50 million be paid to non- hostess employees for insurance

 

when they acquired those companies--- they knew what they were getting into--- just plain old bad management

 

Honestly-- the insurance companies are going to bring this country to it's knees IMHO

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USMC-Retired

They knew yes so maybe they should never have tried and just unemployed the 18.5k sooner. They probally thought they could negociate a better deal.

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They knew yes so maybe they should never have tried and just unemployed the 18.5k sooner. They probally thought they could negociate a better deal.

 

They bought up a bunch of stuff with intention of dismantling the companies and selling them off-- but their deal feel through with the buyer they had lined up and they got stuck-- They have tried a few times to sell out particularly to BIMBO-- They actually had boots in the plant for about a week here in KC a few years back-- but from the "Gossip Bin " hostess would not sell them EXACTLY what they wanted-- the way they wanted it-- So Bimbo bowed out

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Mr. Mike

CEO Pay Grew 127 Times Faster Than Worker Pay Over Last 30 Years: Study

 

 

Sucks to be the little guy these days....

Why do you think that is? Is the market for top CEO talent so competitive, they can almost name their own compensation package? I think there is some truth to that. How many current visionary business leaders can you name off the top of your head? Yet, they are out there and largely go unnoticed because they are running good companies, with solid growth, and consistent returns to their investors. Don't forget many employees have stock in their own companies, often given to them in the form of discounted rates or stock options.

 

It is not a matter of fairness. To compare CEO pay to the average worker is a false comparison. Much like comparing the salary of top cardiologists to ,,,,,,no offense,,,, hospital receptionists. It is apples and oranges!

 

Scarce/rare talent = $$$$$$$$$$$$$$$$$$$$

Little or no talent = $.......maybe!

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