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Old 11-19-2012, 10:12 AM   #101 (permalink)
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Why hasn't any one thought to ask why we stopped buying the sugar products these folks made? Why is it the union's fault for not wanting to give more back to a company that couldn't make it to begin with back in 2004?
Did the company make bakery shop improvements? Not that any article has stated, they pocketed the bucks. Did it stream line the baking process to use less labor, shut down non profitable shops, research why they were losing market share?

Aside from the loss of 18,500 jobs (which is very sad) do we really give a hoot about this crummy company? Kinda like saving worthless car companies, lack luster banks and huge investment (pension driven) funds.

Those that have blasted big business and capitalism, let's hear how you would have saved the company and it's union jobs. Those that hate the unions just who do you intend to bake your sugar bar?
I'm not sure how many people know the pattern with many of these takeovers by private equity funds:

Buy the struggling company cheap, have all employees except management sacrifice wages and benefits and suffer layoffs to keep it "viable". Pay outrageous sums to management for outstanding work to keep company going, and charge massive fees for financial advisory services.

Take out massive loans allegedly to improve the company and make it viable, continue with the givebacks and layoffs for employees and the massive salaries and bonuses for managers. Charge massive fees for advisory services and for arranging the loans. At the same time, split the company into profitable and unprofitable divisions, and sell off the profitable parts. Charge massive fees for this expertise.

Declare bankruptcy to get out from the huge loans, continue with more givebacks and layoffs by employees and more money for managers to carry the company through bankruptcy. Charge massive fees for advisory services and "helping" the company through bankruptcy.

Repeat a couple more times if possible (think airlines). When the scam doesn't work anymore, or the employees balk, close up shop. Charge massive fees for advisory services. If the company doesn't close, it has been radically restructured by reducing employee wages and benefits to much less than they were before.

In the end, nothing has been accomplished, but the private equity fund has sucked millions out and made a handsome profit for its "investment", and its accomplices in management have been paid very well, while the company has gone out of business and the workers have lost their jobs. Blaming it on the unions is just the icing on the cake.

This is the playbook for vulture capitalism. It's massive legalized theft and fraud. Some companies can't continue in business because their markets have changed, but they don't have to be terminated like this.
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Last edited by Baltobonneville; 11-19-2012 at 10:17 AM.
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Old 11-19-2012, 10:24 AM   #102 (permalink)
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Agreed. It's a shame that so many will lose their jobs like this.
"Today, Hostess Brands inc. — the company famed for its sickly sweet desert snacks like Twinkies and Sno Balls — announced they’d be shuttering after more than eighty years of production.

But while headlines have been quick to blame unions for the downfall of the company there’s actually more to the story: While the company was filing for bankruptcy, for the second time, earlier this year, it actually tripled its CEO’s pay, and increased other executives’ compensation by as much as 80 percent.

At the time, creditors warned that the decision signaled an attempt to “sidestep” bankruptcy rules, potentially as a means for trying to keep the executive at a failing company. The Confectionery, Tobacco Workers & Grain Millers International Union pointed this out in their written reaction to the news that the business is closing:
BCTGM members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.

Certainly, the company agreed to an out-sized pension debt, but the decision to pay executives more while scorning employee contracts during a bankruptcy reflects a lack of good managerial judgement.

It also follows a trend of rising CEO pay in times of economic difficulty. At the manufacturing company Caterpillar, for example, they froze workers’ pay while boosting their CEO’s pay to $17 million. And at Citigroup, CEO Vikram Pandit received $6.7 millionfor crashing his company, walking off with $260 million after the business lost 88 percent of its value."

Yeah, ALWAYS those dam Union employees gouging the employer. Wake up and smell what your shovelin.
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Old 11-19-2012, 10:34 AM   #103 (permalink)
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... the decision to pay executives more while scorning employee contracts during a bankruptcy reflects a lack of good managerial judgement.
Depends on where your standing.
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Old 11-19-2012, 10:36 AM   #104 (permalink)
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This is the playbook for vulture capitalism. It's massive legalized theft and fraud. Some companies can't continue in business because their markets have changed, but they don't have to be terminated like this.
Finally, someone identifies the real culprits. Not "big business" as such, not the "man" as such but a small but powerful boutique industry responsible for taking advantage of failing companies. If a company is failing for managerial reasons or for market driven reasons it makes itself vulnerable to these speculator hawks and vultures.

Easy answer is to tax them at the same rates other companies are taxed.
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Old 11-19-2012, 11:29 AM   #105 (permalink)
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But go ahead and blame the unions for not accepting insulting and degrading cuts in pay and benefits.
Exactly! They chose to be unemployed. Now with the fiscal cliff they won't get unlimited never ending unemployment compensation because that is being cut off by the Obama administration.

Anyone who would choose unemployment in this economy is at fault for being stupid.
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Old 11-19-2012, 12:55 PM   #106 (permalink)
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Exactly! They chose to be unemployed. Now with the fiscal cliff they won't get unlimited never ending unemployment compensation because that is being cut off by the Obama administration.

Anyone who would choose unemployment in this economy is at fault for being stupid.
There are none so blind as they who will not see.

We should just be grateful for whatever scraps the vultures deign to leave us after they destroy the company, right?


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Old 11-19-2012, 01:51 PM   #107 (permalink)
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"Sure, you can keep your jobs. But you will have to work for a dollar an hour, and every day the manager will be allowed to penetrate you with his fist. Meanwhile, the management team will all get pay raises, and will take your pensions away. Don't complain. You're lucky to have a job."
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Old 11-19-2012, 02:15 PM   #108 (permalink)
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Every two years I negotiate a contract with Local 49 International Union of Operating Engineers. These are the guys that plow our roads in the winter and fix them in the summer - among a lot of other things.

I've found that over the past 12 years, the best contracts came when both sides came away thinking that they were getting the short end of the stick. It's seldom that anyone has the upper hand in negotiations.

That wasn't necessarily true the last time around. Because of cuts to local government funding, from the State, we had little to offer the union for additional compensation. To their credit, they understood that (not happily) but they didn't go into a pout and threaten to strike. We found some workplace issues that we could work with them on and defined strategies for additional training.

I think they're a good bunch and don't want to see anybody sliding off the road anymore than I do.
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Old 11-19-2012, 02:45 PM   #109 (permalink)
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what?

people sat down and talked? and tried to understand each other's position? and then both made compromises? and both groups were decent people and treated each other with respect?

yeah right. That'll never work
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Old 11-19-2012, 03:13 PM   #110 (permalink)
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Exactly! They chose to be unemployed. Now with the fiscal cliff they won't get unlimited never ending unemployment compensation because that is being cut off by the Obama administration.

Anyone who would choose unemployment in this economy is at fault for being stupid.
Ironic humor in written form often requires an emoticon.

Management at Hostess also ignored opportunities to create new products that reflected changing consumer tastes ( launching "healthier" whole grain products for example ), and it's attempts to streamline costs by centralizing it's bakeries led to product changes that had a bad effect on taste and texture. What management was good at was obtaining huge financing deals with huge amounts of leveraged debt that they never intended on actually being able to pay back. As had been pointed out, this is a how to in Vulture Capitalism.

No worries if you actually, for some reason, like Twinkies. A contract manufacturer near you will soon be recreating this Industrial Food Product in a factory near you. Or you can buy a few boxes on e-Bay for the same price a good used Speed Triple and a year of Sunday dinners at your favorite local eatery will run you.
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