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Nov 26 2012

The Union Insanity That Killed the Twinkie

Thanks to the unions Obama empowers at every opportunity, it is no longer possible to make Twinkies in the USA. It isn’t only a matter of Hostess being forced to pay extravagant salaries for menial labor. There is also lunacy like this:

The snack giant endured $52 million in workers’ comp claims in 2011, according to its bankruptcy filing this January. Hostess’s 372 collective-bargaining agreements required the company to maintain 80 different health and benefit plans, 40 pension plans and mandated a $31 million increase in wages and health care and other benefits for 2012.

Union work rules usually required cake and bread products to be delivered to a single retail location using two separate trucks. Drivers weren’t allowed to load their own vehicles, and the workers who loaded bread weren’t allowed to load cake. On most delivery routes, another “pull up” employee moved products from back rooms to shelves.

It’s amazing that Hostess managed to sell Twinkies for less than $20 apiece — but still more amazing that anyone thinks bailing out industries rotted through with unionization (e.g., the auto industry) won’t lead to national bankruptcy in the end.

Unions, like liberals, are a parasitical infestation that must be eradicated before America will ever recover its health.

twinkies union

On a tip from Henry.

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  • Doug

    The snack giant endured $52 million in workers’ comp claims…

    I suppse they used the Twinkie Defense argument.

  • A. Levy

    What we’re seeing here is yet another prime example of why the Communist Party of America started the labor movement back in the 1920′s. Their goal was to destroy America’s production capabilities and economy, an economy they knew would grow to be the strongest in the world. And ironically, it’s funded by the very dupes, (i.e. union members) who will now be unemployed. And of course, your tax dollars.

  • Doug

    BTW, they’ve now announced the new Mexican version of Twinkie.

  • Sinister66

    Hostess has approx. 18,500 employees yet only 5,600 are members of the Bakery, Confectionery, Tobacco Workers and Grain Millers Union.

    http://dealbook.nytimes.com/2012/11/19/hostess-and-bakers-union-agree-to-mediation/

  • Winston Smith

    Sinister, now tell us how many were Teamsters as in the drivers….it was around 4400 – oddly the Teamsters agreed to the 25% share of the company in exchange for the cuts back in September – usually its the Teamsters that drove companies out of business.

    http://bizbeatblog.dallasnews.com/2012/09/teamsters-approve-hostess-last-best-offer.html/

  • Winston Smith

    In any event all union and non union employees are now collecting unemployment. More than likely Twinkies will be baked by Grupo Bimbo of Mexico. I dout Bimbo will be hiring any union members to product Twinkies.

  • Winston Smith

    Correction. Hostess had 7300 Teamsters – only 4400 bothered to vote. Not that it would have mattered since the Bakers union pretty much put the final nails in the Hostess coffin.

  • smg45acp

    Classic case of the parasite killing it’s host.

    Excuse me. I meant killing it’s Hostess.

  • Sam Adams

    Of course, Union officials will have a pretty nice Christmas, due to the salaries they receive:
    http://www.unionfacts.com/employees/Bakery%2C_Confectionary%2C_Tobacco_Workers_%26_Grain_Millers

    Name Title Gross Salary Benifits & Other Compensation Total Compensation
    FRANK HURT PRESIDENT $210,672.00 $51,982.00 $262,654.00
    DAVID DURKEE SECRETARY-TREASURER $196,627.00 $47,769.00 $244,396.00
    JOSEPH THIBODEAU EXEC VICE PRESIDENT $182,582.00 $36,407.00 $218,989.00
    STEVE BERTELLI VICE PRESIDENT $137,638.00 $60,424.00 $198,062.00
    MICHAEL KONESKO VICE PRESIDENT $137,638.00 $46,659.00 $184,297.00
    ARTHUR MONTMINY VICE PRESIDENT $137,638.00 $37,867.00 $175,505.00
    ANTHONY JOHNSON VICE PRESIDENT $137,638.00 $29,795.00 $167,433.00
    ROBERT OAKLEY VICE PRESIDENT $142,638.00 $24,627.00 $167,265.00
    RANDY ROARK VICE PRESIDENT $137,638.00 $29,211.00 $166,849.00
    SEAN KELLY VICE PRESIDENT $136,124.00 $25,665.00 $161,789.00
    JOHN PRICE REPRESENTATIVE $109,645.00 $49,379.00 $159,024.00
    JAMES RIVERS REPRESENTATIVE $99,645.00 $51,922.00 $151,567.00
    HARRY KAISER ASSISTANT TO PRESIDENT $137,637.00 $12,127.00 $149,764.00
    CESAR CALDERON ORGANIZER $99,645.00 $49,206.00 $148,851.00
    BARBARA FIELDS REPRESENTATIVE $99,645.00 $47,239.00 $146,884.00
    RAYMOND SCANNELL RESEARCH DIRECTOR $137,637.00 $8,292.00 $145,929.00
    RICHARD YEAGER FINANCE DIRECTOR $137,637.00 $8,207.00 $145,844.00
    ANTHONY SHELTON REPRESENTATIVE $99,645.00 $44,729.00 $144,374.00
    JOHN PURVIS REPRESENTATIVE $99,645.00 $40,860.00 $140,505.00
    MARCO MENDOZA REPRESENTATIVE $99,645.00 $38,107.00 $137,752.00
    BLAINE WILLIAMS REPRESENTATIVE $99,645.00 $36,331.00 $135,976.00
    JETHRO HEAD REPRESENTATIVE $95,430.00 $39,381.00 $134,811.00
    KARL WALKER ORGANIZER $98,549.00 $32,484.00 $131,033.00
    JAMES CONDRAN REPRESENTATIVE $99,645.00 $29,049.00 $128,694.00
    ERIC ANDERSON REPRESENTATIVE $99,645.00 $28,135.00 $127,780.00
    SYLVAIN GAGNE ORGANIZER $98,549.00 $27,810.00 $126,359.00
    DANIEL RONDOU REPRESENTATIVE $98,549.00 $27,329.00 $125,878.00
    RANDY FULK REPRESENTATIVE $88,479.00 $35,342.00 $123,821.00
    CORRINA CHRISTENSEN PUBLICATIONS DIRECTOR $100,905.00 $6,674.00 $107,579.00

    I cut off the list when total compensation dipped below $100,000 per year.

    BTW, the Union officials have their own, fully funded pension plan, too. Great work if you can get it.

  • facebkwallflower

    http://polination.wordpress.com/2012/11/24/hostess-brands-screwed-by-union-bigs/

    “So, this whole thing was a sacrifice of 6000 union jobs for the cause of destroying a majority NOT union company. 12,000 NOT union-must destroy?” (and then be bought by a union organization? Why else strike on a company that was in bankruptcy court in January 2012? Get rid of the non-union workers and facilities and fill with union workers who are now out of work…..a union jobs program?)

  • Sinister66

    Would be interesting to see a breakdown of their expenses( labor, commodities, GEs)

  • Winston Smith

    Yes, Sinister666, it would be interesting indeed. The DEVIL is in the details. Goofy rules like having bread and bakery goods in different trucks to require twice as many drivers and not having drivers load and umload their trucks likely skyrocketed labor costs.

  • Ummah Gummah

    smg45acp says:
    November 26, 2012 at 12:40 pm
    Classic case of the parasite killing it’s host.

    Excuse me. I meant killing it’s Hostess.

    I guess the Hostess is Toastess..

    .

  • Ummah Gummah

    .

    Hostess’ cake is baked..

    .

  • Ummah Gummah

    Winston Smith says:
    November 26, 2012 at 12:30 pm
    In any event all union and non union employees are now collecting unemployment. More than likely Twinkies will be baked by Grupo Bimbo of Mexico. I dout Bimbo will be hiring any union members to product Twinkies.

    No problemo.

    They can buy Mexican O’Bimbo Twinkies with their EBT cards now.. and stay home and watch Honey Boo Boo or whatever happens to be hot.

    .

  • Sinister66

    Winston Smith says:

    ” Goofy rules like having bread and bakery goods in different trucks to require twice as many drivers and not having drivers load and umload their trucks likely skyrocketed labor costs.”

    Do you even know if the breads were made in the same bakeries as the Junk food? Wonder bread’s bakery only made Wonder bread.
    Why would a twinkie delivery driver drive to a wonder bread bakery when they have their own delivery driver?

    Comparing hostess’s labor, commodity, GEs, and profit line would show exactly where the problem lies.

    Not that it matters. You will still blame the unions for the:

    lack of plant upgrades The BCTGM gave hostess brands $110 million to do that never happened.

    The $850 million in secured outstanding debt

    The $75 million debtor in possession loan

    The $36 million in lease obligations

    The $300 million in sales losses each year

    The $110 million per year in previous wage and benefits cuts that just seemed to disappear.

    The $60 million outstanding to trade creditors.

    Now if you really want to make sure you don’t support this union you may want to avoid:

    Alfred Nickles Bakery

    Bimbo Bakeries

    Canada Bread

    Dannon

    General Mills

    Herman Goelitz

    Hershey’s

    Hostess

    Keebler

    Kellogg’s

    Kraft

    Necco

    Pepsico

    See’s Candy

    Weston

    Nestle

    Kellogg’s

    Kraft

    Necco

    Pepsico

    See’s Candy

    Weston

    Nestle

    Tootsie Roll Industries, Inc

    Russell Stover Candies Inc.

    Quaker Oats Company

    Del Monte Foods

    Funny how none of these companies are in bankruptcy. Must be well managed.

  • Sinister66

    Oops. doubled some up.

  • KHarn

    “Sinister66 says:November 26, 2012 at 2:05 pm”

    How does that excuse what the UNIONS did? HINT: it does not.

    Say, if you lived durring the thirtys, would you say something like “Yes, the Japanese bombed, looted, murdered and raped in Nanking, but look at all the Chinese towns they BY-PASSED”?

    I didn’t make a NAZI comparison, so don’t cry “Godwin’s Law!”.

  • Ummah Gummah

    .

    I don’t know why some of you regulars keep replying to Sister Sick-Sick as if she were a rational being.

    LIEberals don’t change their “minds” when presented with facts.

    They are like moslems. They can’t be talked to. They can’t be reasoned with.

    .

  • Sinister66

    Winston Smith says:

    Also Hostess brands had:
    33 Bakeries
    565 Distribution Centers
    570 Bakery outlet stores
    5500 delivery routes.
    18,500 employees

    Now since your fixated with the delivery routes answer me this. Anyone with half a brain knows when a delivery driver shows up to work his truck is already loaded and ready to go. He just needs to find out his route and off he goes. When he comes back from his route he parks his truck and if his shift is over punches out and leaves. Anything left over is unloaded by someone else. Since delivery drivers generally make more than loaders, how does this “skyrocket” labor cost?
    Do you think its more efficient to have a higher paid driver do the work a lesser paid loader/unloader should do?

  • Ghost of FA Hayek

    Sinister
    Hostess should be one heck of a buy if as you suggest that it was simply a case of mismanagement of it’s variable costs, rather than labor .
    I will be waiting for the Bakers Union to put it’s fat wallet where it’s big mouth is.

  • Sinister66

    KHarn says:

    “How does that excuse what the UNIONS did?”

    List for me the terrible things they did.
    And your comparison makes no sense.

    Ummah Gummah says:

    “I don’t know why some of you regulars keep replying to Sister Sick-Sick as if she were a rational being.

    LIEberals don’t change their “minds” when presented with facts.”

    Everything I have presented is fact. You present nothing useful or factual. If anyone is like a “moslem”
    its you.

  • Sinister66

    Ghost of FA Hayek says:

    If it was well managed, how do you explain its 2004 bankruptcy and its rotating door for CEOs. Don’t recall unions being blamed for that one

  • Sinister66

    Ghost of FA Hayek says:

    “Hostess should be one heck of a buy if as you suggest that it was simply a case of mismanagement”

    Actually it looks to be more profitable to Ripplewood Holdings to just sell the company off piece by piece.

  • metalgarth

    Even if Hostess was badly managed, the union had the last chance to save it, even temporarily, and save 18,000 jobs. They chose to kill it. The union demonstrated what a Pyrrhic Victory is to a “T”. They won but everyone lost in the end.

    It’s also a perfect illustration of how 2 wrongs (or bad decisions) don’t make a right.

  • Ummah Gummah

    .

    I wonder why UPS doesn’t adopt this “great” policy of having separate guys to take parcels off the truck instead of letting the drivers do it.. since Sister Sick-Sick seems to think that it’s such a great cost-saver.

    LIEberals.. can’t get them to think.. they are just like cows and regurgitate the party line..

    .

  • facebkwallflower

    KHarn says:

    “How does that excuse what the UNIONS did?”

    List for me the terrible things they did.
    And your comparison makes no sense.

    The terrible thing the union did is is, as the minority of 8000, went on strike against the majority which included some of the 8000 union members not wanting to strike and the 12,000 non-union employees. That is CRIMINAL.

  • KHarn

    “Sinister66 says:November 26, 2012 at 2:38 pm
    “And your comparison makes no sense”

    Yes, I admit that’s true; I just felt like posting something nasty.

    BUT!!!

    That does not alter the point of my question.

    Also, you asked ME to “List for me the terrible things they did.”. Why? Are you too lazy or STOOOPID to read the artical through? Do you really need OTHER PEOPLE to do YOUR research?

    No wonder everyone laughs at you; you’re a typical regressive: wanting OTHERS to do things so that YOU can reap the benefits. And don’t try saying “business owners reap benefits for what others do”; the obvious retort is that business owners PAY PEOPLE to work, you pay us NOTHING.

  • Pingback: Roundup | Eternity Matters

  • Tax Slave

    Whenever I see a “Live Better/Work Union” bumper sticker, I want to throw a Twinkie at the goon.

  • Sam Adams

    Do you even know if the breads were made in the same bakeries as the Junk food? Wonder bread’s bakery only made Wonder bread.
    Why would a twinkie delivery driver drive to a wonder bread bakery when they have their own delivery driver?
    __________

    Yes; most often the same bakery produces a variety of products…bread, Twinkies, etc.

    How do I know?…….I’ve seen the inside of more than one Hostess Bakery.

    Here’s the interesting thing; the guys who bought Hostess were trying to demonstrate that it was possible to work with the unions in order to bring the company back into profitability.

    http://dealbook.nytimes.com/2012/11/19/private-equity-and-hostess-stumbling-together/

    But the story of Hostess and private equity — at least over the last couple of years — is hardly the cliché that Bained portrays. No tears need to be shed for Ripplewood and its investors, but they weren’t part of a get-rich-quick scheme either.

    Ripplewood, which was founded by Timothy C. Collins, a major Democratic donor, is expected to lose most, if not all, of the $130 million or so it invested in Hostess. The company’s lenders, led by Silver Point Capital and Monarch Alternative Capital, are not expected to fare well either.

    The behind-the-scenes tale of Hostess and Ripplewood may be the opposite of a project to buy it, strip it and flip it. When Mr. Collins originally looked at Hostess, he was trying to make investments in troubled companies with union workers. He was convinced that he could work with labor organizations to turn around iconic American businesses, and he hoped Hostess would become a model for similar deals.

    Early on, Mr. Collins sought out Richard A. Gephardt, the former House majority leader, who had become a consultant on labor issues, to help Ripplewood acquire Hostess and work with its unions. Mr. Collins had previously been a donor to Mr. Gephardt’s election campaigns, according to an article in Fortune magazine this year that described the relationship.

    It was Mr. Collins’s relationship with Mr. Gephardt — a Democrat and longtime friend of labor — that helped make the deal happen in the first place.

    While Ripplewood sought significant concessions from the unions in 2009, some insiders and outside analysts privately suggested that Ripplewood did not fight hard enough for even greater givebacks from the unions in the bankruptcy process — savings worth $110 million — perhaps as a function of Mr. Collins’s relationship with Mr. Gephardt. In addition, the company was saddled with $670 million in debt, which had jumped by about $200 million as part of the sale during bankruptcy.

    Ripplewood’s luck — and its investment thesis — could not have been worse. With the sputtering economy, the increase in commodity costs, pressure from competitors that were consolidating and out-of-whack labor costs, Hostess’s fate seemed assured from nearly the beginning. Still, Ripplewood continued to throw good money after bad trying to keep Hostess from faltering.

    And unlike some of the horror stories we hear about private equity firms paying themselves huge dividends and leveraging their companies even further, Ripplewood didn’t do that.

    Having said all that, Ripplewood’s management was far from a model for the industry. For at least the first year of the new ownership, Ripplewood charged Hostess management and consulting fees, according to people briefed on the payments, which were “in the millions of dollars.” As Hostess’s balance sheet worsened, Ripplewood stopped seeking the payments, these people said.

  • grayjohn

    Everytime I see a crowd of union members chanting about something, I compare them to a crowd of muslim crazies chanting about something. The more I look the less difference I see. And in the end they’re all chanting DEATH TO AMERICA!

  • TED
  • TED

    MOOSCHELLE IS SO PLEASED.

    TWINKIES

    Ingredients
    Cake
    Nonstick spray
    4 egg whites
    One 16-ounce box golden pound cake mix
    2/3 cup water

    Filling
    2 tsp very hot water
    ¼ tsp salt
    2 cups marshmallow crème (1 7-ounce jar)
    ½ cup shortening (some people prefer 1/3 cup)
    1/3 cup powdered sugar
    ½ tsp vanilla

    1. Preheat oven to 325°
    2. Disregard the directions on the box of cake mix. Instead, beat the egg whites until stiff. In a separate bowl combine cake mix with water, and beat until thoroughly blended (about 2 minutes). Fold egg whites into the cake batter and slowly combine until completely mixed.
    3. Spray nonstick cooking spray into mold pan (available on Amazon. Also comes with an icing syringe). Pour the batter into the molds, filling each one about ¾ of an inch. Bake in the preheated oven for 30 minutes or until the cake is golden brown and a toothpick stuck in center comes out clean.
    4. For the filling: combine the salt with the hot water in a small bowl and stir until salt is dissolved. Let this mixture cool.
    5. Combine the marshmallow crème, shortening, powdered sugar and vanilla in a medium bowl and mix well with an electric mixer on high speed until fluffy.
    6. Add the salt solution to the filling mixture and combine.

  • Ghost of FA Hayek

    Actually it looks to be more profitable to Ripplewood Holdings to just sell the company off piece by piece.
    Sinister

    The behind-the-scenes tale of Hostess and Ripplewood may be the opposite of a project to buy it, strip it and flip it. When Mr. Collins originally looked at Hostess, he was trying to make investments in troubled companies with union workers. He was convinced that he could work with labor organizations to turn around iconic American businesses, and he hoped Hostess would become a model for similar deals.

    Sam Adams
    _____
    So it appears the Bakers Union was likely knowingly taking advantage of someones good will

    The moral of this story ?
    Hostess should have probably been sold off piece by piece from the beginning.

    This story actually illustrates the folly of top down government control and/or influence in the economy.
    Dick Gephardt spent years in the House ostensibly “investing” on behalf of the American people.
    But being in a position of power meant that his investments could not be scrutinized. After all, he must have known what he was doing, right ? He had our “best interests” in mind.
    But for once we get to see the real world outcome of his economic prowess.

  • Winston Smith

    Sinister 666 as usual doesnt seem to know delivery trucks to retailers are sent from distribution centers in most cases where both bread and baked good are warehoused.

    As for upgrades, no money to upgrade due to massive labor costs.

    In any event, the bakers destroyed 18,500 jobs… thats the bottom line. Why dont unions use their billions to start business of their own instead of paying off politicans? Because they know their labor costs would destroy them.

    So what if parts of the labor force of successful companies are unionized. Those companies know how to deal with unions by not keeping them in their place. Unions are basically organized crime extortion rackets.

    Theres a reason why union membership keep declining – they end up putting companies out of business eventually if they have too much power. Unions are full of goons and low IQ types.

    They put the company my father worked for in the late 70s – he then tore up his Democratic voter registration card and re-registered as a Republican to vote for Reagan in 1980. It was a similar story to Hostess.

    Thanks to the greedy bakers union 13,000 union members are now unemployed and not paying union dues (whioh was the only good thing to come out of it – union goon leadership will have less cash to spend on themselves and Democrats).

  • Jimbo

    The only good communist is a very, very dead communist.

  • h.

    Lollipops and unicorns.

    Management run by moonbats.

  • Sinister66

    Ummah Gummah says:

    “I wonder why UPS doesn’t adopt this “great” policy of having separate guys to take parcels off the truck instead of letting the drivers do it”

    UPS does have separate people load. unload and sort packages from the delivery trucks. So does FEDEX.

  • Sinister66

    KHarn says:

    “Also, you asked ME to “List for me the terrible things they did.”. Why? Are you too lazy or STOOOPID to read the artical through? Do you really need OTHER PEOPLE to do YOUR research?”

    In other words you dont know of any.

  • Sinister66

    Winston Smith says:

    “As for upgrades, no money to upgrade due to massive labor costs.”

    So what happened to the $110 in concessions the union gave hostess brands for upgrades?

    “Thanks to the greedy bakers union 13,000 union members are now unemployed”

    What greed?
    They already took a wage cut and a cut in benefits that would save $110 per year. Where did that money go?

    Hostess Brands was already going to close several bakeries regardless of the strike. Looks to me like its an excuse to dump the whole thing.

    Now during liquidation Hostess wants to pay 19 senior managers 1.75 million in bonuses.

    I guess when asked about the fate of Hostess line workers, upper management responded, “let them eat Twinkies”

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