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The Twinkie wars: ideological battles waged online

By | November 18, 2012, 6:55 PM PST

Last week, baker Hostess Brands announced that it would ask a federal bankruptcy court for permission to begin liquidating its assets. The Twinkie’s demise has partisans pointing fingers at their favorite marks: either Wall Street or union bosses.

A battle of words is being waged online. Liberal bloggers are blaming venture capitalists and inept management - the company has loaded itself up with nearly a billion dollars in debt. Its CEO also recently received a massive 300 percent pay increase while workers were asked to make concessions. Conservative bloggers cite Hostess as ‘yet another’ incident of unions supposedly committing hari kari by striking. Neither side holds providence on the truth, but each has a viral campaign.

The AFL-CIO posted a blog entry saying, “The truth is that the Bain-style vulture capitalists invested in Hostess to profit not by making quality products, but by bleeding the company of every dollar before discarding it.” It published this info graphic outlining Hostess’s debt attributed to strategic management blunders:

Image credit: AFL-CIO

Image credit: AFL-CIO

A Chamber of Commerce blog post targets the union saying, “Even a company that produces an American icon cannot do so by continuing to rack up losses. Hostess stated plainly that they ‘do not have the financial resources to weather an extended nationwide strike.’ They needed “wage, benefit and work rule concessions,” but a union representing only 30% of the company’s workforce refused to cede any ground.” Here’s its contribution to the zeitgeist:

Image credit: Chamber of Commerce

Image credit: Chamber of Commerce

It would be surprising if competitors fail to snatch up Hostess’s iconic brands -Twinkie and Wonder Bread - at a discount. Hopefully they will outlast the infographics (or the events of “Zombieland“).

(Image credit: No Hope for the Human Race)

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David Worthington

About David Worthington

David Worthington is a contributing editor for SmartPlanet.

David Worthington

David Worthington

Contributing Editor

David Worthington has written for BetaNews, eWeek, PC World, Technologizer and ZDNet. Formerly, he was a senior editor at SD Times. He holds a degree from Temple University. He is based in New York.

Follow him on Twitter.

David Worthington

David Worthington

David does not have financial holdings that would influence how or what he covers. Occasionally he consults for other companies; should David cover a topic in which a client is involved, he will disclose this fact in his writing. His views do not represent those of his employers.

He writes for SmartPlanet and is not an employee of CBS.

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+3 Votes
+ -
Hostess
I just feel sorry for the close to 19,000 people that are losing their jobs because of the CEO and union's greed.
Posted by jazdad96
19th Nov
+4 Votes
+ -
The workers are the union
Hostess gave the WORKERS an opportunity to show up to work before they made the final call on the shut-down. Nobody showed up. This should lead to the Union workers taking over their own darn union, but it won't because the workers are apparently too easily influenced by the crooked unions. They need to stop the manipulation and tell the union bosses to take a hike.
Posted by vcrewchief
19th Nov
+13 Votes
+ -
Blaming the victim
Look at the facts; Hostess had been in financial trouble (declared bankruptcy twice) for at least the last decade, thanks to bad management. The one clever thing the managers did was to push its skilled-trade workers (bakers) into a strike, then pull a Bain -- kill the company, sell off the assets, give its managers golden parachutes, take the money and run off to India or China and start over -- and blame the unions for it. Cute trick!

--Leslie Fish
Posted by Leslie Fish
19th Nov
0 Votes
+ -
Not Bain At All
@Leslie Fish,

Bain Capitol buys companies already in bankruptcy. This allows them to get the company for a very cheap price. Then, they do whatever is needed to get the company profitable again. Once profitable, Bain then sells it's share for a large profit.

Liquidating the company almost never gets more than the purchase price.

Bain has to do quite a lot of research before it buys into any company. They have to make sure they can recoup the investment.

Bain would have just closed selected plants, and expanded others. This is much more like what Berkshire Hathaway does.

If the Union charges are correct, and if the numbers are not a dishonest ploy, then, the stockholders may have reason for a class action suit against the Board, and the C level executives to recover the looted finances.

Still, in this kind of situation, both sides are probably lying.
Posted by YetAnotherBob
20th Nov
+2 Votes
+ -
NO union greed, just SOP on CH11 process
No union greed, as the "new investors" had already raided retirements, benefits and what went down is SOP for CH11 and looting of nation. They will make millions selling name and probably ole CEO's etc will run it, that is way it works. get educated on CH11 history's since 2005 when congress sold out to investment/lawyers.
Posted by hmmmmm!
19th Nov
-7
sorry
Posted by sarai1313@...  |  Below your threshold
-2 Votes
+ -
Their time has come and gone!
Unions were an important part of the workforce 60-70 years ago.
Today they are just bleeding companies dry and forcing them to close up shop.

Sorry but someone sweeping the floors, with no education should not be making $25-$30 an hour.....
Posted by Sun Chaser
19th Nov
+8 Votes
+ -
And they don't make $25-30/hr anywhere.
Your in a fantasy world.
Posted by shaunehunter
19th Nov
0 Votes
+ -
it's all fantasy
It's the Faux/Limbaugh echo chamber fantasy world. Despite megastorms, megadroughts, megafires, the north pole melting, and 99% of scientists, There Is No Global Warming. Rush Pigbaugh says so. People on food stamps live like kings, never work and if they're Mexican, get sixty grand a year from the gummint. Obama is a Kenyan, Socialist, Muslim traitor bent on wrecking America (I think wrecking America is more something Bush did, but the echo chamber says he no longer exists ;')
Posted by James Mooney
Updated - 19th Nov
-1 Votes
+ -
No fantasy bucko!
BULL, I was driving for Molsons over 20 years ago and the floor sweeper was making $27.50/hr. That's a fact Jack!
Posted by Sun Chaser
19th Nov
+1 Vote
+ -
Raytheon in MA starts janitors at $26.
It takes just a few years to earn over $30 an hour.
Posted by Hates Idiots
20th Nov
+1 Vote
+ -
The reason..
because they are not supposed to break anything!
Posted by opcom
21st Nov
+2 Votes
+ -
but wasn't Molsons Beer 20 yrs ago a Canadian-only company???
I grew up in Montral, and Molson was always a Montral HQ'd company, with various bottling plants around Canada.

I must of missed the news that they even had American plants, because when I first moved to America, which as 26 yrs ago, every Molson product was either imported from Canada to the stores, or imported by me in the trunk of my car or my suitcase on the plane.
Molson Coors merged only in 2005, 7 yrs ago, at which time Molson inherited American operations.

20 yrs ago, the Canadian dollar was 30-some % exchange rate to the US dollar. even in 1997-99, when I was working both sides of border on a joint project, the Canadian dollar was up to 54% higher, and since I was paid in US dollars, I felt rich when I was in Canada with making 54% on my money to my CIBC account.

You need to explain better what you mean, that 20 yrs ago Molson was paying American workers 27.50/hr. I don't think so, but if you can provide a bit of proof or knowledge as to how things like Canadian-only operations, 30-50% currency exchange rates, and the differences of Canadian payscales and socialist services (like healthcare) are comparable to American salaries, then I am open to listen, and you are welcome to provide proof to change my mind.

When you were driving for Molson's and janitors were making 27.50$/hr, was that in America??????
Posted by bressennuit
26th Nov
Posted by Hates Idiots
26th Nov
+8 Votes
+ -
Unions were middle class
Yep evil union times when CEO pay was 24 times, not the 220 times worker pay and just a mathematical "coincidence" over last 40 years as unions went down, upper end incomes went up and middle class real wages/wealth went down?
Posted by hmmmmm!
19th Nov
0 Votes
+ -
no, but the guy putting lug nuts on cars
in Detroit is making $25 an hour, and the guy driving a fork lift at Miller for 28 years was making $35/h when he retired. Union folks, both. No education required of either, except the skills to do those jobs. Even the floor sweep needs that.
Posted by opcom
21st Nov
0 Votes
+ -
The guys putting lug nuts on were making more than that at GM
With 15 years on the job some GM lug nut workers were making up to $90 an hour.

They were mad as hell when it was cut to JUST $75 an hour during the whole restructuring mess.

I remember one TV interview where the guy picketing screamed 'how am I supposed to pay a $600,000 mortgage on $75 an hour?' Sorry, no pity here for a guy who can buy a $600,000 home.

I'll give you management was stupid to give in and give them such wages, but the unions pushed it with strike threats when times were good. Both are to blame for dring jobs out of the US.

I find it interesting how unions will claim companies make such huge profits, but they never want profit sharing agreements instead of fixed wage increase. Even when the potential employee income for a good year is higher.
Posted by Hates Idiots
23rd Nov
+1 Vote
+ -
Important then, important now
You lost, maybe you should be sweeping floors; really depends
on what your definition of "educated" is.
Posted by bill1514@...
22nd Nov
+9 Votes
+ -
Yes there time has come and gone....or has it.
Top executives walking away with over a BILLION dollars in bonuses? Whose raping the company, unions or top executives?
Posted by Thea925
19th Nov
+7 Votes
+ -
A interesting read on the situation. With links to additional details.
http://www.mondaq.com/unitedstates/x/206300/Insolvency+Bankruptcy/Hostess+Court+Authorizes+Rejection+Of+Bakers+Union+Collective+Bargaining+Agreements

It is interesting to note Hostess was able to settle with the Teamsters, but the Bakers Union took a much harder line against Hostess.

One interesting point I found on another legal site on the matter said the latest court ruling against the union on November 12th was because the union failed to provide proof of the executive raises and bonuses and the "secret buyer for Hostess" the Bakers Union has been talking about for months.

The 11/12/12 ruling included an admonishment of the Bakers Union for not negotiating in good faith and including a warning from the court that the company had provided ample proof it could not afford a strike and debt holders would force it's closing and liquidation in the event of a strike.
Posted by Hates Idiots
Updated - 19th Nov
+1 Vote
+ -
Lean of CH11 before you post.
Amusing post on "Debt holders" as if you read up on CH11 there is no doubt that the "Debt holders" are the big investment firms and they make out with huge profits from CH11. So they have no issues with forcing strikes, you might read up on massive CEO "stay on board" bonus's that go with every CH11. Suggest you read up on CH11 and read total history of who does well in those things and who loses, CH11 was rewritten in 2005 and now used by what was once {"Corp Raiders" to obtain huge profits "Legally". They target mostly mid and low level companies, gut them and make huge amounts, even CH11 judges have become discouraged on how the process works. CH11 courts are THIRD Court in USA, other two are criminal and civil and CH11 operates under own rules.
Posted by hmmmmm!
19th Nov
+5 Votes
+ -
I'm sick of the "rocket science" crapola
I worked in a big bread bakery. The work is awful - high speed, hot, yet subject to all sorts of variations while you have to adapt perfectly, almost instantly, to keep up with the line. All these idiots who go on that some blue collar job isn't "rocket science" so they only deserve tiny wages, wouldn't last a Day in most factories. Not everyone can be a vulture capitalist - they make a lot More than 20 bucks an hour (which is a lie) for Theft and Destruction..
Posted by James Mooney
19th Nov
+7 Votes
+ -
Why Unions Persist
Used to be that unions were essential in transforming American workplace -- mostly for the better.

Later on, the only excuse for the continuation of unions was (is?) the vicious ineptness of management.

Now, a case could be made that unions have become just another entrenched bureaucracy.
Posted by mdwalls
19th Nov
+7 Votes
+ -
It's amusing to note...
...that it was the Teamsters who were the "scabs" in the scenario. You have to give them credit for understanding that a lower paying job was better than no job at all. Too bad than their brothers with the Bakery, Confectionery, Tobacco Workers and Grain Millers' International Unions decided to play chicken, and lost.
Posted by JohnMcGrew@...
19th Nov
+2 Votes
+ -
What I do not understand.
The court offered the Bakers union the same deal as the Teamsters.

Work under a company adjusted, court approved, CBA up to 6 months, because their old CBA had lapsed, until the union and Hostess could come to an agreement.

The Teamsters took the deal and had a new contract shortly after.

Looking at the time of year it is you would like to think the Bakers Union would take the deal to ensure their members had jobs through the holidays and into spring.

Instead the Bakers union now has put a total of 18,500 people out of work a month before Christmas going into the winter with no way to pay for heat or food except going on government assistance.

So tell me again how the Bakers Union was looking out for its members and other union members who already had contracts?
Posted by Hates Idiots
Updated - 20th Nov
0 Votes
+ -
crooked teamsters
The Teamsters are a crooked union that often scabs for management. They were hired to break the grape pickers strike, for instance. They shouldn't even be called a union. They've gotten no more honest since Hoffa's Mafia days.
Posted by James Mooney
19th Nov
+2 Votes
+ -
You want crooked, try SEIU.
The employees of a hospital in California just spent 5 years of legal battles to get rid of SEIU as their union after management and the union conspired to force employees into the union.

After that SEIU was caught rigging voting at another hospital.

http://sternburgerwithfries.blogspot.com/2011/10/seiu-uhw-rigs-union-vote-at-kaiser.html

Now 3 more hospitals full of employees want out.

The situation is so bad one chapter went rouge and formed its own union.

http://www.washingtonpost.com/politics/judge-rules-against-seiu-in-california-fight/2011/07/20/gIQAC9mGSI_story.html
Posted by Hates Idiots
20th Nov
+6 Votes
+ -
Bain-style capitalists
Perhaps the AFL-CIO should do their homework before they post idiotic statements. (BTW, please do not mistake this as a pro-Mitt Romney post; this post has nothing at all to do with Mitt Romney)

Bain Capital saved and/or grew the following companies:
Brookstone - Lost nearly $10 Million in 1987 on record high sales of $93 Million. Bain bought them and sales jumped to $147 Million in 1993, is now profitable, and partners with several charities.
Burger King
Clear Channel
Domino's Pizza - Bain turned them into the Pizza Chain of The Year multiple times.
Dunkin' Donuts - under Bain ownership, their "green" restaurant is Leadership in Energy and Environmental Design (LEED) certified
Guitar Center - Bain made them the largest music retailer in the world.
HCA Hospitals
Sealy Mattress
[Sports Authority
b]Staples
The Weather Channel
Posted by bb_apptix
Updated - 19th Nov
-1 Votes
+ -
The other list
This is dwarfed by the companies Bain loaded with debt and destroyed
Posted by James Mooney
19th Nov
+2 Votes
+ -
Where's Your List???
Claims like that are easy to make, but where's your proof? And don't include companies that Bain tried to make profitable and failed (Solyndra anyone???), because venture capital companies don't have the option to print more money when they fail - so they try to achieve the most profitable outcome for their investors no matter how things turn out. That is the way capitalism and free enterprise works.
Posted by hground
20th Nov
+1 Vote
+ -
RE: Bain-Style
Another interesting factoid...The Prez's vice campaign chair is Federico Pena...he's a venture capitalist and just recently closed a couple of Del Monte and Bird's Eye plants and moved them across the border... Funny, I didn't see that anywhere in the MSM...
Posted by GregGold
19th Nov
0 Votes
+ -
hey, it's just business
yes, for his old relatives and friends. but unless it's illegal, it's legal!
Posted by opcom
Updated - 21st Nov
+8 Votes
+ -
Unions
It is quite clear that the economy, the Baker's Union and the health conscious consumer killed off the company. Let's look at the facts:

Obviously when the economy goes down, we all look at where we can cut costs, this means that we will not buy as many non-essential snacks as we used to.

People have been switching to healthier snacks, at least some of the time, which has resulted in lower sales for Hostess.

Unions refused to allow layoffs and other cost cutting measures to be put in place by management.

Management was forced to declare bankruptcy to get contracts voided, so that they can issue pay cuts just to keep the company running until the economy picked back up.

Everyone except the Baker's Union understood that this was essential to prevent the closure of the company. No, no one likes pay cuts, but an 8% pay cut is better than a 100% pay cut. We had to take pay cuts in my company to keep the company running and no, we don't like it and management doesn't like having to do it, but it was essential to allow all of us to keep our jobs and our business has remained when many of our competitors who didn't take these measures have had to shut their doors. Once things pick back up, the pay cuts will be lifted.

So, it is most definitely one particular union that killed Hostess, as they had a plan that would have allowed most people, if not everyone to keep their jobs.
Posted by cmwade1977
19th Nov
+7 Votes
+ -
executives were taking RAISES, not 8% pay cuts
But the CEO and other executives got pay RAISES, the CEO was up to 300% pay increase. Not an 8% pay cut.

If there was no money to keep employees salaries the same, and if the employees had to take an 8% paycut, then how was there enough money to give multiple executives huge raises???

Especially since the bakers & others took paycuts in 2004, trying to save the company. They already sacrificed. They would sacrifice some pay again, except that the excutives keep giving themselves raises, not pay cuts.

How many times would you take a pay cut while your boss got a huge raise, all the while being told that you make too much and that you are the cause of the company's closure?
Posted by bressennuit
19th Nov
0 Votes
+ -
RE: Executives
Funny, the courts could find no basis for those accusations..and neither could the Teamsters.. Just goes to show, you can want and believe something to be true, but if it's not, it's not.
Posted by GregGold
19th Nov
0 Votes
+ -
here's what they dont' like
No one especially likes pay cuts when the CEO who first ran the company into the ground, then led it into a devastating leveraged buyout, got a 300% raise for his "acumen." And the workers had Already taken a haircut thanks to this bum. Plus, there was no guarantee that this crook wouldn't do even worse if the company kept on its downhill path. Maybe Another LBO and even more profit for destructive crooks.
Posted by James Mooney
19th Nov
+5 Votes
+ -
Hostess mess
I see a lot of polarized statements here. An Us and them attitude, which is very apparently endemic in the US.

If you look at this from an objective perspective - The CEO giving himself a 300% pay raise when the company was in trouble is both reckless and negligent. The unions in failing to compromise, bleed the company. I agree with the comment unions have to a large degree outlived their usefulness and now place a burden on both the company and economy. for an unskilled person to make 20 dollars an hour is ludicrous. I know people who have college degrees who make less. So in my opinion both parties are to blame. You can only get a head in this world with compromise. The days of totalitarianism have long since passed. Just my two pence from an ex-pat.
Posted by Briton-1
Updated - 19th Nov
+5 Votes
+ -
Actually.
The claimed 300% raise for the CEO is unsubstantiated.

In the 11/12/12 court ruling the judge cited the Bakers Union for failing to negotiate in good faith. The Bakers Union was warned by the court that the company had provided ample proof that creditors would force the company to liquidate assets by months end if there was a strike.

The unsupported claims of executive raises, bonuses and a secret buyer in hiding waiting for reduced labor costs were all disregarded by the court as the Bakers Union showed no proof to backup the claims.

You are quoting baseless Bakers Union talking points. Nothing more.
Posted by Hates Idiots
Updated - 19th Nov
+2 Votes
+ -
Quite a Mess
It would appear that there are several factors leading to the failure of Hostess Bakery. I think the biggest market disrupter for Hostess is the change of the consumer to prefer healthier food. Hostess has been in trouble for a lot longer than the current bankruptcy as there have been financial problems going back several years.

I have never been in a union, I can see where and when a union is a good thing for the workers in providing good wages and benefits. I can also see where unions decrease production to pressure the employers for more. I have from friends who worked in a union shop and finding weird rules as to who does what job and when.

I don't think the management was effective in this case either. I had heard that the upper management got 80% raises; this has not been corroborated. The usual trick with management is to use layoffs to get a rise in stock prices and to look like they are taking bitter measures to stay in business. I would say that the management failed to understand the changing demographics in sales and used the wrong sales tactics.

I haven't had a Twinkie in years. I have seen recipes online to make similar snack items at home. Baking at home provides better control over what goes into the baked goods and even make them more nutricious. I don't think that the Hostess products will disappear but will be bought as brand names by other bakeries.
Posted by sboverie
19th Nov
0 Votes
+ -
Healthy Hostess
snacks surely could have been made, but would have cost more. Things like twinkies are already so far down on the tail end of low cost ingredients, it's expensive to substitute healthier items. The filling, IIRC is basically whipped hydro. veg. oil and corn syrup. How could that be made more healthy and still be a nice filling? I'm not a cook.
Posted by opcom
21st Nov
+1 Vote
+ -
Hostess mess and reality
The hostess thing was simply a well played theater for CH11 "experts" often hired way ahead of time to "guide" company in CH11. They are CFO and such brought in and the company goes at the workers, more so unions while they cut and gouge while investment firms buy in to get control and certain kinds of stocks that are assured to be at top of pay off when things get sold. This stuff is goldmine for the Bains etc as they get all kinds of privileges, often take retirement funds, do not update processes or hardware and go at employees with any means possible. They are experts at this thing. Generally public is way uninformed as to what really goes on in the Courts, Massive all for one filings where all suppliers simply told "Pay back last 90 days of payments so to "redistribute" funds to selected investors etc. Suggest all read up on CH11 before you post, we as a supplier fought one and CH11 is unlike any court you ever heard of nor will . Note you are taken to CH11 court where the case is filed and become a number in a cattle like process, Most small business cannot afford $25-50K lawyers just to get defended and chances are you will lose anyway. This one is exactly same as others, CEO offerd big bonus to help shut down etc, later even show up when business if reopened or shipped offshore.
Posted by hmmmmm!
19th Nov
-6
Graphic in bad taste
Posted by kemcki00  |  Below your threshold
+1 Vote
+ -
Thanks for the comment
But just to note: "Never forget" has been used for many national tragedies, from the 2001 terrorist attacks to the Holocaust. We're not trying to make fun of any of these, just the phrase itself.
Posted by andrew.nusca
19th Nov
+5 Votes
+ -
UNIONS
300 contracts for 18,000 jobs?! Business agents and unions all profiting from the ignorance of the masses! I wonder in the years when companies take a loss how much the employee's and their representatives kick back? Oh, oh, that's right, that's why the employees pay their monthly extortion money (union dues) so they have no responsibility other than clocking in and out and seeing how little they can do to benefit the company. Thank goodness for the democratic freeloaders that will eventually destroy this country!
Posted by EDDER60
19th Nov
0 Votes
+ -
who is the freeloader????
What about the freeloading CEO who got a 300% RAISE, while claiming the company was too broke and had to reduce employees' wages? Who is the freeloader???
Posted by bressennuit
19th Nov
+3 Votes
+ -
Unsubstantiated Claim
The Bakers Union made that claim, but, in Court could not produce any evidence that it was true. The Judge admonished them for that. Lying in Court is not permitted.

You Bressennuit have fallen for a lie.
Posted by YetAnotherBob
20th Nov
+1 Vote
+ -
we are non union
and when the biz is poor, we also suffer through no raises, no bonuses for those who otherwise would get them, no new equipment, etc. so its not clear how the unions really serve a purpose today, except to take money from the workers in return for complaining to the management. But here I can go complain to the management if I want. No one has to do it for me, and I don't have to pay them for it.
Posted by opcom
21st Nov
0 Votes
+ -
Unions are our Vampires
As in ANY vampire story, the problem with them is many-fold but break it down to these two consistent points: They have no morals AND they can never get enough blood. Eventually, vampires ALWAYS bleed the HOSTESS dry (sorry, couldn't resist). AFL-CIO is a mafia organization. Smart Planet? Shame on you for being liberal!
Posted by turbohawk
19th Nov
0 Votes
+ -
Unions are our Vampires, REALLY?
You really have not followed the economic distributions over 40 years after Ronnie R busted unions, middle class wages fall, as did unions and upper end went up. NOTE right now USA firms setting on $12 TRILLION In cash profits, half offshore, awaiting new more favorable tax laws. You should read up on unions vse CEO pays and explain how come when unions were strong CEO pay 24 times workers, now 220. Do you honestly think companies will give workers an evan break if money involved and workers have no say in the matter. Just go tell you boss if you find issues and see how long you last.AKA who speaks for the workers?
Posted by hmmmmm!
19th Nov
-5 Votes
+ -
3 good things
Q: Name three good things about Ronald Reagan.

A: He's dead! He's dead! He's dead!
Posted by James Mooney
19th Nov
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