Gotta give up Ho Ho's

Discussion in 'Nonsense Anything Boards' started by Fishbones, Nov 16, 2012.

  1. Crashmister

    Crashmister Newbie

    Location:
    Fort Lauderdale Florida
    Name:
    Pat Dirindin
    Boat:
    BankShot (shopping)
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    Well I've worked on conveyor systems in Hostes plants and I can tell you the baking process and packaging is automated. How else do you think 18,500 employes could turn out 500 million twinkie's a year along with everything else Hostess produced?
    Hostess went into bankruptcy in 04 and came out in 09 after the employes took big pay and benefit cut's. Now management want's them to take even more cut's. There's no denying the Union's were part of the problem, at best they were a small part. But they get the lion's share of the blame.
    This is from API & Bloomberg.

    Founded in 1930, Texas-headquartered Hostess is one of the nation's largest bakers and wholesale distributors of snack cakes and bread. Besides cream-filled golden Twinkies, its products include such iconic brands as Ding Dongs, Ho Hos and Wonder bread.
    But even as it produced and distributed those still-popular brands, the firm faced more than $1 billion in debt, costly labor union contracts, management criticism and changing U.S. consumer tastes.
    Those issues prompted Hostess to file a motion Friday arguing that the normal Chapter 11 reorganization it has been pursuing since January — the firm's second bankruptcy procedure in recent years — was insufficient for the firm's survival.
    Instead, court records show Hostess sought approval for a one-year emergency shutdown that would:
    • Create a bonus pay plan for 19 corporate officers and high-level managers and some non-senior employees who would carry out the shutdown.
    • Authorize hiring of third-party contractors for security, accounting and other services needed for the closing.
    • Provide legal protection against potential lawsuits for company directors and officers who either developed the shutdown plan or would implement it.
    • Give asset-based lenders priority for repayment over other company creditors.
    • Allow expedited cancellation of unwanted contracts and unexpired leases.
    • Permit non-consensual use of cash collateral provided by some of the firm's creditors.
    In court papers, Hostess said it has struggled with "an inflated cost structure" that has put the company "at a profound competitive disadvantage."
    The costs largely stem from union labor contracts that have "never been meaningfully addressed" or modified, the company contended. Without such changes, "Hostess simply cannot emerge as a viable competitor," the firm said.
    But the company's 12 unions argue that Hostess' problems are largely of its own making.
    Corporate missteps include "years of underinvestment in products, facilities and equipment, long-term neglect of once-dominant brands and hollowing-out of a distribution system that once provided a competitive advantage," wrote Henry Wilson, a financial executive who analyzed Hostess for a provisional labor management committee created by the company and the Teamsters union.
    Wilson's conclusions, filed with the bankruptcy court in March, also cited failure to develop newer, higher-growth products, an overly compliant corporate board and a "grossly overleveraged" debt structure with Wall Street lenders that was imposed during the company's prior bankruptcy.
    U.S. Bankruptcy Trustee Tracy Hope Davis joined Hostess unions in opposing the firm's shutdown plan. In a court filing, Davis criticized the provisions that would "grant bonuses to insiders" and "cherry-pick" which administrative claims get paid.
    Davis wrote that the case should be converted from a reorganization to a Chapter 7 procedure. That would authorize a bankruptcy trustee to liquidate Hostess and distribute the assets in accordance with the U.S. Bankruptcy Code priority scheme.
    Contributing: The Associated Press, Bloomberg News
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