Twinkie Apocolypse

[sirloot]

i like local bakerys anyway .. reppin Salsbury bakery fo life with they :

[crullers]

Is that like a giant apple fritter?? There's a little mom and pop bakery here that does all sorts of wonderful things like that. Going to have to pay them a visit tomorrow. That made me hungry.

[sirloot]

Is that like a giant apple fritter?? There's a little mom and pop bakery here that does all sorts of wonderful things like that. Going to have to pay them a visit tomorrow. That made me hungry.

yeah basically they sell for like 79 cent

[Crow]

You know..........I shudder to imagine what future generations will think of us................. if it is PPs house that Archeologist discover and excavate.

In turn…………..what if all we know about Roman civilization is actually based on 4^th century BC PP……………



kind of makes ya go……….. huummmm

Hahaha!!

Cheeky dog.

[Roo]

Sirloot I like how your local bakery uses 102 ingredients to make a donut lol.

**** Twinkies. The world is better off without them.

[jagmanss]

ok I just got back for the Hostess warehouse near chicago. I have a freaking freezer full of twinkies now. In about a year I will put them on the tobacco exchange for sale.

either that or by that time I'll have ODd on twinkies.

Man! I didn't know you could freeze twinkies.... Off to the store tomorow Hmmm! IDK though may take up valuable snus space in the freezer, Anyway I grew up with twinkies, But haven't had them in years and am now having a hankerin' for them since hearing about this... That is if the shelves aren't cleared off ...

Anyone ever had a deep fried twinkie? Man! Had one a few years back here in FL at a festival and almost had a heart attack But man was it good..... Hell Man! They will deep fry anything here in the south though....

[jagmanss]

Oh Noooooo!

[Skell18]

Try a deep fired mars bar!! That is a heart attack in one bite! lol

[stubby2]

https://petitions.whitehouse.gov/pet...ustry/cJz0ngJR

Save the twinkie

[rickcharles606]

fatass hoarders, lol

[SnusoMatic]

what kills me is not only will i lose my ding dong. now 18,500 people have to find a job INCLUDING the 2,500 that refused to sign the contract

[GoVegan]

what kills me is not only will i lose my ding dong. now 18,500 people have to find a job INCLUDING the 2,500 that refused to sign the contract

Yes, how dare those $12 an hour bakery workers demand no more pay cuts from their $2.5 million per year CEO.

[bakerbarber]

It's a very complicated matter.

This was not there first bankruptcy. In the 2003 bankruptcy which they emerged from in 2009, the company made very little changes to positively position themselves for the ongoing market conditions. There was no capital improvements made, there were no changes to the astoundingly complex rules from their multitude of collective bargaining agreements. There was little progress to consolidate their 80 separate health care plans and numerous pension and retirement programs, let alone much effort at all to streamline their operations for efficiency.

They made a multitude of baked goods. However, Wonder Bread could not be delivered by Hostess snack cake drivers- or visa versa. Drivers could not load their own trucks. If a grocery stocked bread and sweet goods, they had separate deliveries. These deliveries were only to bring product into the grocery. A third Hostess employee was on payroll to replenish shelf space from stock in house.

There were over 15 different unions involved. The Teamsters, who were the largest by number, agreed to the company's proposal because their deal was different. Same pay cuts and concessions, but, if the company emerged from bankruptcy, the Teamsters would gain a 25% stake in the company with a seat on the board of directors.

The concessions were an 8% pay cut. Better than 100% right? Consider in the previous bankruptcy they made similar concessions with the promise that the company would become more efficient and make better use of its resources. Back to the recent agreement, which the bakers turned downed by 92% of voting members, this included a 17% increase in their health and welfare contributions in addition to the 8% reduction in pay.

I don't care how much you make, a 25% net reduction in your take home pay is substantial.

Now whether or not the decision to strike was wise or not, it was not based solely on the latest imposition of concessions. Despite the fact that the bakers union overwhelmingly voted against these concessions the bankruptcy court ruled to enact them anyway and impose them.

The bakers also had watched the company cease making payments into predefined pension funds and healthcare contributions unilaterally without authorization. Although the union filed complaints with the NLRB when this started happening, the bakers stayed on the job and continued to work.

Meanwhile the executives who were turn around experts brought in to attempt to make the company profitable increased their salaries and still made no effort to make capital improvements to their production facilities, fleet of delivery trucks, or outlet stores. Trucks were rust-buckets and baked goods were being produced on equipment decades old that had fallen behind their competitors by leaps and bounds in terms of efficiency and modernization. They were making product on equipment other commercial bakeries replaced 20 years ago.

A review of the turn around team's, current executive's, plan to emerge from bankruptcy this time as a viable and profitable company by independent auditors found it to be utterly inadequate to realistically emerge as a profitable company.

The intention all along, in my opinion, was to bleed as much from the company as possible and then later sell off the assets at a later date. The brands, recipes, equipment, sales territory, and real estate. I think the curve ball came when the bankruptcy judge actually imposed the contract terms onto the collective bargaining members who had rejected the terms to begin with.

This brought the big plan of a staggered and structured divestment of the company's assets and brands out of a long term scenario and forced them to change their timeline dramatically.

The creditors were unwilling to provide more capital for day to day operations as the business was loosing multi millions of dollars every quarter prior to the strike. The closing of some bakeries was not due to the strike. It was part of the bankruptcy plan from the beginning. Though, the bakers stayed on the picket line. The Teamsters pleaded with their baker brothers and sisters to return to work. After all they had a tangible vested interest in emerging from bankruptcy.

When product began dwindling due to shuttled production facilities with bakers on strike, customers began to howl. As days passed, more and more viability died every hour. Creditors reduced accessible funds and customers began sourcing baked goods from alternative suppliers.

In the end the request was made to liquidate. There will be a hearing Monday, but it will be little more than a formality. The company issued letters to vendors and suppliers, customers, and employees notifying all that no more deliveries of raw materials would be accepted, and no more deliveries of finished goods would be made.

These can be found online and were published on Friday.

Ultimately there was no company large enough that could buy Hostess outright who would be willing to take on the convoluted and complex union agreements and dilapidated facilities and logistics operations.

The brands and recipes will be sold and will be made again one day. The bakeries most likely are closed for good.

The story from my perspective is of a company that had been poorly managed and weekend by decades of stifling union agreements. The current CEO was brought in to strategically dismantle the business while retaining as much value as possible along the road to total divestment of assets.

The wild card came when a group of workers who had been dedicated to contributing years of their lives to a company were asked to takes cuts so deep they would be in a sense volunteering their labor during a several month period that would ultimately end in their loss of employment.

The company changed CEOs as if there was a revolving door on the office. The unions refused to make pragmatic give backs in meaningful areas that could have been mutually beneficial.

This isn't the whole story. We'll probably never know what all the details actually were that lead to the ultimate demise of the company. The fact is, the company and the unions both made selfish and unreasonable decisions that negatively impacted the predicament they were in.

In the end, the last straw was the strike. People will say the strike ended the company. There was so much baggage and piles of poor decisions on that camel's back that a speck of dust could have brought it down.

Finger pointing at this junction is only rhetoric.

A company that had been around over 80 years refused to operate by today's standards. A union that had been instrumental in the company's success was backed into a corner and forced to make a desperate move that from the outside appeared hideously unwise in today's economic environment.

Fingers can point and blame can be thrown, but the fact remains that their collective refusal to work together to save their institution only hastened the inevitable.

The BANKERS were going to close the operations bit by bit and suck the marrow from the bones along the way. The union denied them the satisfaction of allowing themselves to be pawns in a game of attrition.

Sure, staying on the job and looking for work may have been a wiser decision. Continuing an education in between shifts may have been an option. How many of them would find a job in the long run? How many will in the short term?

A once national brand and market leader had been a zombie lumbering along for several years.

It was just a matter of time.

My prayers go out to the thousands of workers and families who will be affected by the company's collapse. Hopefully when the slate is wiped clean they can all find a niche in the new normal that is our economy.

This topic interested me and I have done quite a bit of googling. It's a tangled web and none of the players are clearly the protagonist.




.

[Bigblue1]

Awesome post BB. You unlike some didn't decide it was one's fault and not another's. I assume by your handle and other baking related posts you are in the industry of which you speak. which I put much credence into. Again Awesome Post!

I do have to say that an 8% loss in income is correct but to claim that paying 17% more for health care equals a 17% loss in income I would have to see that their health care contributions were equall to their wage. So most likely it wasn't a 25% cut in their income.......

[bakerbarber]

You're probably right, most likely not 25% total.

I am in the industry. I know many people who left that company over the past 30 years under one name or another. Those who are still around were sickened to watch it unfold over the past few years.

As Rayburn said in his Bloomberg and Fox News interviews. The market was over capacity. People don't eat bread and sweet goods as much as in the past. It is a business with razor thin margins.

This past summer's drought made the cost of ingredients sky rocket.

Where I work, we had thousands of customers calling Friday and Saturday desperate to keep their shelves full of bread for their seasonal Thanksgiving rush.

We had to turn away some. We couldn't service others if we wanted to.

What would normally be a slow time of year for me has now become a flurry of opportunities. It is sad that our current opportunities come out of others misfortune. In business, you make hay when the sun shines. I don't know how much of this Thanksgiving I will be spending with family.

I do know that when the dust settles, the company I work for will be much busier. We don't do sweet goods, cup cakes, or other such items. As I said, Hostess made a plethora of baked goods. What voids are created will be filled. Nature abhors a vacuum.

The baking industry will be better off with one a the bigger, wounded members of the herd not slowing down the collective momentum.

We're by no means the size or scope of Hostess, and they did not have facilities in our immediate area. Their sudden stop coinciding with a Holiday that revolves around eating has caused some pretty big wave in the food industry.

Grocery stores will not let shelf space set empty. Where a Twinkie used to be, something will be in its place. What will be interesting is when someone obtains the rights to produce Twinkies, if there will be shelf space allocated to them again and if consumers will buy them.

I can't say when the last time I ate a Twinkie was.

Between the media bastardizing processed foods and people's shift in eating habits, do snack cakes make much of a difference? No one goes into a fancy restaurant and asks how many calories are in the cheese cake or tiramisu. Hand them a packaged donut and they gasp with astonishment to see the fat and calories in print.

Consumers are interesting... I'm glad I'm not in marketing!!