Last night as I was driving I was listening to MSNBC on the radio. I believe MSNBC is one of the media outlets of the DNC. They were talking about the Hostess Bankruptcy and placing all the blame on management. Of course.
During the course of the broadcast, it was stated that Hostess has made the claim of over 110 parties who are interested in purchasing the company and that 70 of them are serious enough to have signed Non-Disclosure Agreements (NDA) to be able to go over the company's financials.
The MSNBC host (I forget his name) made many comments that the high level of interest is proof that the BK is a product of mismanagement and not the worker's fault.
So, my simple question is: If the company is viable given it's current contracts and facilities, why don't the current workers put together a package to make Hostess an employee owned company? They have retirement funds in their pensions which could be invested in this venture, they would have the union backing and possibly partial financing and they have a very favorable administration in Washington DC who would assist them in any way possible.
If they are so certain it can be done, why aren't they willing to take the risk to do it?
Friday, November 30, 2012
Friday, November 16, 2012
Wild Thoughts on Hostess' Future
As I'm sure you've heard (many times) by now, Hostess announced they are shutting down operations and liquidating the company's assets. I have a few thoughts about this. For the record, I have no (zero, zilch, nada) inside information, just the Random Thoughts of my Wandering Mind!
The timing is particular to me. Yes, the workers were warned in advance, and the deadline was not a surprise. But to shutdown on a Friday does give a weekend with the courts closed to have "quiet negotiations". Even though the company says they won't occur.
It also gives time for the union leadership to start calling in favors from the politicians they own.
Here is my totally theoretical timeline of what may have already happened since the announcement and what may happen in the days to come.
Lawyers for the union probably started on briefs as soon as the first threat of a shutdown was made.
They will likely file a complaint with the National Labor Relations Board (NLRB), file a brief in Federal Bankruptcy Court (BK) opposing the liquidation, possibly even some sort of motion in Federal Court seeking an order to force Hostess to allow the workers to return to work pending resolution of the NLRB and and BK complaints.
In the meantime, the union will be giving marching orders to their bought and paid for politicians.
Federal mediation may be ordered. Never mind if the company wants to mediate or not, this is the new era of business.
Obama may even appoint a "Twinkie Czar" to oversee a bailout and restructuring of the company. Because of the bad publicity of previous bailouts, this will be titled different but the end result will be the same. Retired Hostess workers will get screwed, millions (maybe even billions) of taxpayer dollars will be pumped into the company. The government will own a huge chunk of the stock. Current CEO Greg Rayburn will be replaced by an Obama hack.... er .... replaced by the choice of our enlightened president.
Sorry for the delay, it took me a bit to stop laughing over that last sentence. Sometimes I crack myself up.
Given her concern over children's health, Michelle Obama may be placed in charge of the new Hostess. As the workers return to making the products, a little creative accounting will have the Obama Administration crowing about the quick return to profitability. The stock will rise and the government will sell off its share, for far less then what is still owed from the bailout.
Meanwhile, Michelle will oversee the formulation of a line of healthier versions. Subsidies will be paid to keep manufacturing costs down as the only buyers will be the Military and the Federal School Lunch Program. Schoolchildren, being defenseless, will be forced to eat them. Soldiers will find more creative uses for the new versions.
The Obama Administration will announce that all of the leftover product the government has from failed solar energy and battery companies will be put to use making a couple of the Hostess plants run on green energy. These plants will end up being only able to operate a couple hours a day, however the workers will still be paid their full wages. Workers at the other plants will score big with overtime to make up for the production from the idle plants. Senators Feinstein and Boxer (D-CA) will propose an excise tax (Twinkie Tax) on snack foods produced at the plants to cover the operational costs being underwritten by the government. Opponents will call it the "Ding Dong Tax" in honor of those running the company.
As emphasis is placed on the "healthy products" sales numbers will fall. Talks of another bailout will follow. When the sales really slump, production of traditional products will be ramped up but with cheaper ingredients causing the taste to be off.
Former CEO Greg Rayburn will open a new plant in Mexico producing the products, under a different name (Twankies maybe?), the way they were meant to be made and taste. The government will scream foul, declare Rayburn a criminal and prohibit importation, sale and/or possession of the "counterfeit" products. A "War on Twankies" will be declared and a new, oppressive federal agency formed to stamp out black market snack foods.
Hmmmm, maybe we should all email Rayburn and promise to buy a pack of Twinkies a week if he'll re-open the plants....
The timing is particular to me. Yes, the workers were warned in advance, and the deadline was not a surprise. But to shutdown on a Friday does give a weekend with the courts closed to have "quiet negotiations". Even though the company says they won't occur.
It also gives time for the union leadership to start calling in favors from the politicians they own.
Here is my totally theoretical timeline of what may have already happened since the announcement and what may happen in the days to come.
Lawyers for the union probably started on briefs as soon as the first threat of a shutdown was made.
They will likely file a complaint with the National Labor Relations Board (NLRB), file a brief in Federal Bankruptcy Court (BK) opposing the liquidation, possibly even some sort of motion in Federal Court seeking an order to force Hostess to allow the workers to return to work pending resolution of the NLRB and and BK complaints.
In the meantime, the union will be giving marching orders to their bought and paid for politicians.
Federal mediation may be ordered. Never mind if the company wants to mediate or not, this is the new era of business.
Obama may even appoint a "Twinkie Czar" to oversee a bailout and restructuring of the company. Because of the bad publicity of previous bailouts, this will be titled different but the end result will be the same. Retired Hostess workers will get screwed, millions (maybe even billions) of taxpayer dollars will be pumped into the company. The government will own a huge chunk of the stock. Current CEO Greg Rayburn will be replaced by an Obama hack.... er .... replaced by the choice of our enlightened president.
Sorry for the delay, it took me a bit to stop laughing over that last sentence. Sometimes I crack myself up.
Given her concern over children's health, Michelle Obama may be placed in charge of the new Hostess. As the workers return to making the products, a little creative accounting will have the Obama Administration crowing about the quick return to profitability. The stock will rise and the government will sell off its share, for far less then what is still owed from the bailout.
Meanwhile, Michelle will oversee the formulation of a line of healthier versions. Subsidies will be paid to keep manufacturing costs down as the only buyers will be the Military and the Federal School Lunch Program. Schoolchildren, being defenseless, will be forced to eat them. Soldiers will find more creative uses for the new versions.
The Obama Administration will announce that all of the leftover product the government has from failed solar energy and battery companies will be put to use making a couple of the Hostess plants run on green energy. These plants will end up being only able to operate a couple hours a day, however the workers will still be paid their full wages. Workers at the other plants will score big with overtime to make up for the production from the idle plants. Senators Feinstein and Boxer (D-CA) will propose an excise tax (Twinkie Tax) on snack foods produced at the plants to cover the operational costs being underwritten by the government. Opponents will call it the "Ding Dong Tax" in honor of those running the company.
As emphasis is placed on the "healthy products" sales numbers will fall. Talks of another bailout will follow. When the sales really slump, production of traditional products will be ramped up but with cheaper ingredients causing the taste to be off.
Former CEO Greg Rayburn will open a new plant in Mexico producing the products, under a different name (Twankies maybe?), the way they were meant to be made and taste. The government will scream foul, declare Rayburn a criminal and prohibit importation, sale and/or possession of the "counterfeit" products. A "War on Twankies" will be declared and a new, oppressive federal agency formed to stamp out black market snack foods.
Hmmmm, maybe we should all email Rayburn and promise to buy a pack of Twinkies a week if he'll re-open the plants....
They sure showed Hostess, didn't they?
“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Hostess CEO Gregory F. Rayburn said in announcing that the firm had filed a motion with the U.S. Bankruptcy Court to shutter its business. “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets"
Also from Mr. Rayburn; "that he had been “pretty straightforward in all the town hall meetings I’ve done at our plants to say that in this situation I think there is blame that goes around for everyone.”
Also from Mr. Rayburn; "that he had been “pretty straightforward in all the town hall meetings I’ve done at our plants to say that in this situation I think there is blame that goes around for everyone.”
He denied that the decision to shut down could be a last ditch negotiation tactic to get the union back to the table.
“It’s over,” he said. “This is it.”
Twinkie lovers, DO NOT FRET! Here is a recipe to make your own! :-)
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