Farewell, Twinkies

Gawdzilla said:
"Win-win". Big Pharma gets to sell more medicine, and if that doesn't work, well, that's one less person crowding the planet.

This kind of logic baffles me.
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I'm home sick today because if I went in everybody around me would get this same damned cold because I am sneezing and hacking up a lung.

But I work for a decent employer where we have exceptional benefits including adequate sick time and management support for using it when appropriate.

If I were working in a bakery, supporting two kids, and had no sick days, do you think I'd be ABLE to stay home sick? No, sick leave and medical insurance (or a company physician, that would serve if meds are then covered,) ought to be a part of health and safety requirements for any processed food plant.
 
WildCat said:
Doubtful, since that's far less than the billions owed. They lost $1.1 billion in 2012 alone.


What do you base that on? AFAIK they bought only the brand, not the manufacturing plants.
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THEY took over at least five of the closed down bakeries. The Wonderbread purchasers took over 20 of them.

ETA: And that's what Hostess Brands lost in 2012, not what the investors put into it.
 
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Foolmewunz said:
THEY took over at least five of the closed down bakeries. The Wonderbread purchasers took over 20 of them.
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Where did you read that? And if so, what makes you think they'd have to hire the same workers and honor their old contracts?

Foolmewunz said:
ETA: And that's what Hostess Brands lost in 2012, not what the investors put into it.
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That money had to come from somewhere, somebody's taking a huge hit.
 
WildCat said:
Where did you read that? And if so, what makes you think they'd have to hire the same workers and honor their old contracts?
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It was in the published terms of the original offer. For their 410 mil they would get the Hostess/Dolly Madison brands, five bakeries, and certain equpment (one assumes the equipment associated with those five bakeries).

As to the assumption that the bakers get their jobs back? (I don't assume they honor the old contracts but that they'll work out new ones.) Well, that's just business logic. They anticipate getting Twinkies back on shelves by June? That's ten weeks. Metropolous doesn't own any snack cake bakeries and couldn't move the equipment and set it up and start producing and doing quality tests if he was taking the production elsewhere. Ten weeks is a very short time frame. They'll go with the experienced workers. Plus, of course, there's his track record of being union friendly.

That money had to come from somewhere, somebody's taking a huge hit.
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Let's wait and see just who took the hit. I'm voting for unsecured creditors. The investment companies are not on the "unsecured" list. They are first in line. There are still another couple of hundred million in assets out there to be liquidated. As I said months and months ago, the capital guys are not going to lose anything. They got their money back by loading the debt onto Hostess' books, so Hostess took the hit. Now they will get returns on that investment.
 
Foolmewunz said:
It was in the published terms of the original offer. For their 410 mil they would get the Hostess/Dolly Madison brands, five bakeries, and certain equpment (one assumes the equipment associated with those five bakeries).
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My understanding was that many of the Hostes bakeries had obsolete equipment which resulted in inconsistent quality. I don't see why they'd want to use it. I think they'll buy more modern equipment that requires fewer workers. Of course, it could be the 5 they bought had more modern equipment.

Foolmewunz said:
As to the assumption that the bakers get their jobs back? (I don't assume they honor the old contracts but that they'll work out new ones.) Well, that's just business logic. They anticipate getting Twinkies back on shelves by June? That's ten weeks. Metropolous doesn't own any snack cake bakeries and couldn't move the equipment and set it up and start producing and doing quality tests if he was taking the production elsewhere. Ten weeks is a very short time frame. They'll go with the experienced workers. Plus, of course, there's his track record of being union friendly.
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GM is union-friendly too, but they were able to force all kinds of concessions on their workers after bankruptcy. Hostess was in the position where they couldn't get out of the obsolete and inefficient work rules negotiated over many decades. And in many older companies it's those work rules, not wages and benefits, that kill profitability.

Foolmewunz said:
Let's wait and see just who took the hit. I'm voting for unsecured creditors. The investment companies are not on the "unsecured" list. They are first in line. There are still another couple of hundred million in assets out there to be liquidated. As I said months and months ago, the capital guys are not going to lose anything. They got their money back by loading the debt onto Hostess' books, so Hostess took the hit. Now they will get returns on that investment.
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You're just speculating, you have no idea who is first in line (behind the IRS of course if they're owed money).
 
balrog666 said:
The brand names and products are coming back to the market and all those union-contract jobs are lost forever.

Win-win-win!
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I always thought the Narn were the freed slaves, and the Centauri were the heartless "let them eat cake" species. Or is your avatar some kind of fan-fiction collaborator?
 
WildCat said:
"Yet the buyers are unlikely to rely as heavily on a unionized work force as the old Hostess did."
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The bakers are their production. They were asking for standard wage packages and HB management was picking a fight so they could close down. I bet they keep the bakers union. The facilities are in small-ish towns and any qualified baker, assistant or apprentice who applies is probably a union member. I'd be real surprised, in fact, if the new owners haven't already talked with the union while they were making their business plans. Between Dean Metropoulos and Apollo Mgmt (not to be confused with the other Apollo, the holding company for University of Phoenix et al) they are savvy investors. They would not leave the biggest sore spot unattended going into a four hundred million deal.

I reckon they'll also sign the Teamsters but it'll be under a modern contract, not the old work protection variation. The Teamsters are losing their footing in a lot of places and had already acquiesced to many of the old HB management's requests.
 
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Foolmewunz said:
I'd be real surprised, in fact, if the new owners haven't already talked with the union while they were making their business plans.
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Doesn't sound like it so far.

“We look forward to discussing opportunities for our members with new ownership, and add value to the revival of these products,” David Durkee, the president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, said in a statement.
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Twinkies back on store shelves by July!
Twinkies will hit store shelves nationally by late July, Michael Cramer, executive vice president of Hostess Brands LLC told NBC News on Thursday. "We expect to be making and selling in July," he said. "Probably the later half of the month before the product hits the stores."

All of the classic Hostess snack brands will return, some making their return in August and September. Hostess Donettes and some of the snack cakes will be among the first to return. And "Twinkies for sure," Cramer said.
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But the unions won't be:
The bankrupt assets of Hostess Brands, Inc., the company responsible for Twinkies, Ho Ho's, Sno Balls and Ding Dongs, are being put back to work by a buyout firm. What's not being put back to work are the former Hostess unionized employees.

...But last month Apollo Global Management, LLC, and Metropoulos & Co., which owns Pabst Blue Ribbon and Vlasic pickles, bought the 83-year-old company for $410 million, renaming it Hostess Brands LLC. It is planning to re-open four bakeries over the next two and a half months, in Columbus, Ga.; Emporia, Kan.; Schiller Park, Ill.; and Indianapolis. It is also contemplating a fifth in Los Angeles.

According to a report in the Wall Street Journal, C. Dean Metropoulos, the company's chief executive, said that between now and September, he plans to inject $60 million in capital investments into the plants, and hopes to hire at least 1,500 workers.

But those workers won't be unionized.

"It appears that they are discharging the union contract in bankruptcy," said Matthew A. Kaufman, a labor attorney in Los Angeles who is not affiliated with the case.

While Metropoulos did not respond to interview requests from ABC News, he told the Journal that he does "not expect to be involved in the union going forward."
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So much for "union-friendly Metropoulos".

Note the big investment in new equipment, I'm guessing that this is the sort of thing the union was against. Often it's not wages and benefits that kill profitability, but antiquated work rules that lock a company into obsolete equipment and practices that require far more workers.
 
WildCat said:
Note the big investment in new equipment, I'm guessing that this is the sort of thing the union was against. Often it's not wages and benefits that kill profitability, but antiquated work rules that lock a company into obsolete equipment and practices that require far more workers.
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Which is exactly what the previous owners said.

And the previous "previous owners".

And ...

;)
 
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