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Seeking the Truth daily
Join Date: Jan 2006
Location: In the Country in MO
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Strikes dont always work.
On the first business day after bakers went on strike against Hostess Brands, the Irving-based company said Monday it will permanently close three striking bakeries, putting 627 employees out of work.
Late Friday, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike against Irving-based Hostess to protest cuts and give-backs in the company’s last, best, final contract offer. The contract, which was rejected by 92 percent of the union members who voted, called, in part, for 8 percent pay cuts, a company hiatus from contributions to a multi-employer pension plan and changes in work rules. As of Monday, bakers had set up picket lines at about 23 of the 36 bakeries and production plants operated by the bankrupt snack maker. Hostess said the strike “has prevented the facilities from producing and delivering products.” “Our customers will not be affected because we will continue to serve them from other Hostess Brands bakeries, but sadly this action will result in the permanent closure of three facilities and the loss of 627 jobs,” said Gregory Rayburn, Hostess Brands’ chief executive. “We deeply regret this decision, but we have repeatedly explained that we will close facilities that are no longer able to produce and deliver products because of a work stoppage — and that we will close the entire company if widespread strikes cripple our business.” The bakeries to be closed immediately are in Seattle, St. Louis and Cincinnati. The Seattle facility employs 110 people and produces Hostess cake products. The St. Louis facility employs 365 people and produces Hostess cakes and Nature’s Pride and Wonder breads. http://www.dallasnews.com/business/h...cincinnati.ece |
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#91 | |
In BB I trust
Join Date: May 2003
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Quote:
No, you still need a tinfoil hat to believe that. Sorry.
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#92 |
In BB I trust
Join Date: May 2003
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What is this silly "it's all the Unions' fault" business about? Sure, they're probably partly to blame, but you guys just leap right to that when, frankly, neither you nor I have 1/1000th of the knowledge to truly understand what happened here. "The unions shut it down" is pretty simplistic thinking. What management did or didn't do in the past to make the company competitive, what the debt load is, what the equity owners were and weren't willing to do -- none of that matters in your simplistic view. It's just crazy.
So, for the sake of it, I decided to spent 10 seconds looking up its history, at least since the 2004 bankruptcy. Here's what Wikipedia has to say. [quote]2004 Bankruptcy On September 22, 2004, Interstate Bakeries filed for Chapter 11 bankruptcy. The company also named a new chief executive, Tony Alvarez. Interstate Bakery's stock, which had been at one time $34/share, fell to $2.05/share as they declared bankruptcy. At the time it was the longest bankruptcy in U.S. history. During bankruptcy, Interstate fought a 2007 bid from Mexican baked goods giant Grupo Bimbo and Ron Burkle of the Yucaipa Companies. [11] With the leadership of Craig Jung, the company emerged from bankruptcy as a private company on February 3, 2009.[12] The plan included a 50 percent equity stake by Ripplewood Holdings and lines/loans by General Electric Capital and GE Capital Markets, Silver Point Finance and Monarch Master Funding. Interstate's union workers made contract concessions in exchange for equity.[13] During the 2004-2009 bankruptcy period, Interstate closed nine of its 54 bakeries and more than 300 outlet stores. Interstate's work force declined from 32,000 to 22,000 employees. The company also dropped some regional brands and operating agreements, such as the agreement to produce Sunbeam Bread for the northeastern U.S. (now produced by LePage Bakeries of Auburn, Maine)..]/quote] So it looks like we have a LONG running bankruptcy in which the main owner prior to bankruptcy FOUGHT efforts to have the company sold to other bidders. "We got this" they're saying. They come out of bankruptcy with a slimmed down operation, with unions and debtholders making concessions and getting equity in return. Now, LESS THAN THREE YEARS after coming out of a 5 year bankruptcy, they're once again forced to file. The equity ownership that the unions got for prior concessions -- yeah, those are gone now. So what happened? Who knows, other than the obvious fact that their debt-load was too high. It's definitely possible that they overleveraged the company -- that happens all the time -- and the unions weren't interested in another round of cuts. They'd rather see the business die than take it on the chin again. Maybe it was the union. Maybe it's 100% on them. But without knowing alot more, including how their packages compared to non-union employees, etc., it's certainly hard to say for sure. All we know is they were the final nail in a coffin that was being built for the last 8 years, sicne the company seemingly never really recovered from teh 2004 bankrutpcy.
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#93 |
In BB I trust
Join Date: May 2003
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Just for the sake of it, let me give you a very brief alternative scenario where the unions are basically right to do what they did. I have no idea if this is true or not, of course, but it's worth putting out there how complicated this stuff is.
To get the company out of bankruptcy, the former owners decide they're going to put in a significant amount of new money, but they want to structure it nearly all as debt, at a very high rate of interest -- 15%. On top of that they have senior secured debt form an institutional lender. The lender sees that the company is thinly capitalized so it requires quite alot of covenant protection and a higher-than-market rate of about 8% (which floats based on financial performance). This entire structure is very risky, because if the assumptions don't work, the company is pretty much bound to fail. If the new money had come in entirely (or even mostly) as equity, then the debt load would be much lower, interest rates would be much lower and the senior lender may have given more generous loan terms. In connection with the exit, the union was required to give up rights that it had and convert some of that to equity. It wanted to have a portion of that as debt, pari passu with the senior secured, but they said (not unreasonably) "no new money from you so no debt status for you". The union accepted the deal, along with reduced benefits etc. going forward. The new money put in by the owners is better protected because they are lenders, not equity holders, but they also helped caused the problem in the first place because there was ZERO margin for error. Things don't work out, and the company goes back into bankruptcy. That's partly because (in my entirely hypothetical situation), they decided to expand product lines with insufficient market research, and try to penetrate new markets that were already saturated/dominated by competitors. A complete waste of effort and money. And now the union is once again asked to make concessions so that the company can continue and the senior secured lenders (who otherwise will make a partial recovery at best) can be far more likely to make a full recovery. Union says no, we've taken it on the chin enough times. They've seen this play before, and have no confidence that this ownership group will be able to make the company viable. All that is balanced against, of course, the workers losing their jobs. I have no idea what their other opportunities may be, so who knows if they were morons to do that or not. But the point is that the company was almost bound to fail under this ownership/leadership and they were no longer willing to keep taking reduced wages and reduced benefits to keep the company afloat.
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"I love signature blocks on the Internet. I get to put whatever the hell I want in quotes, pick a pretend author, and bang, it's like he really said it." George Washington |
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#94 |
Captain Kick Ass
Join Date: Sep 2001
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It's seems obvious that they were running up hill for a while and once they hit the cliff the union just pushed them off.
Whether it was the market moving away from their products or competitors pulling them away. I certainly can't remember the last time I purchased on of their products. |
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#95 | |
Supporter
Join Date: Apr 2007
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At it's core, the union is not responsible for making company decisions, the company is. It STILL forced the shutdown of a plant, and put it's members out of work. I fail to see how that is the right thing to do. If the company sucks, disassociate with it. |
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#96 |
Quit your bullshit
Join Date: Jul 2005
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The problem with unions isn't that they exist. Some degree of labor solidarity is necessary and always will be. The problem is that unions have become big business, and businesses look out for themselves, not their employees.
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#97 | |
Please squeeze
Join Date: Jul 2003
Location: Clinton, MO
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Quote:
http://management.fortune.cnn.com/20...kies-bankrupt/ |
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#98 | ||
In BB I trust
Join Date: May 2003
Location: Boston, Mass.
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Quote:
Quote:
Yeah, no. Makes no sense. The union basically told management that there would be permanent disassociation by all involved rather than accept the latest offer. Management "accepted" that "offer." So that's what happened.
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"I love signature blocks on the Internet. I get to put whatever the hell I want in quotes, pick a pretend author, and bang, it's like he really said it." George Washington |
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#99 | |
In BB I trust
Join Date: May 2003
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Wow, the unions didn't want to accept another round of massive concessions, I CAN'T understand why!!!!
Quote:
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"I love signature blocks on the Internet. I get to put whatever the hell I want in quotes, pick a pretend author, and bang, it's like he really said it." George Washington |
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#100 | |
Rockin' yer FACE OFF!
Join Date: Feb 2003
Location: Omaha, Nebraska
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Quote:
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![]() We have a million reasons for failure, but not one excuse... ![]() ![]() ![]() ![]() A quote: "Oh well, there's always next year. We'll be better then, you'll see..." - Every Chiefs fan for the last 46...crap...47 years... ![]() |
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#101 |
Independent Moderate
Join Date: Mar 2010
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Really? In an age where the city of New York makes it illegal to sell a sugar-sweetened drink over 16 ounces? In an age where Obama states he will issue executive orders to implement Cap & Trade after it was rejected by Congress?
Take off your blinders, dude. |
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#102 |
Independent Moderate
Join Date: Mar 2010
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That's what wrong with liberalism in general. They want what they want. It doesn't matter whether or not the money is there to give them what they want. They want what they want, and damn the consequences.
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#103 |
Please squeeze
Join Date: Jul 2003
Location: Clinton, MO
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So you would be ok taking an 8% paycut twice and lose pension and benefits while the top execs are giving each other huge raises?
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#104 |
Spiraling down the Drain
Join Date: Oct 2012
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Brilliant.
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"We're both part of the same hypocrisy, Senator, but never think it applies to my family." "Fredo. You are my brother, and I love you. But never take sides against the Family again. Ever." 2017 Adopt a Chief - Travis Kelce #87 |
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#105 |
Red, White & Blue for the U.S.
Join Date: Sep 2001
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nah, unemployment is a much better option....
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