Categorized | National

Who Really Killed the Twinkie?

 

Hostess Brands Bites the Dust

 

–82-Year-Old Company Dead Shortly After Equity Buyout–

 

Skippy Massey
Humboldt Sentinel

 

Hostess Brands Inc. says it’s went out of business after striking
workers across the country crippled the business, company executives claim.

Hostess Brands, maker and baker of Twinkies, CupCakes, Ho Hos, Ding Dongs, Zingers, Fruit Pies, and Honey Buns, shut down operations November 16 after the company said a union strike by bakers crippled its business to the point that it had to liquidate.  It sought court approval to close, declare bankruptcy, and sell off all of its assets.

“Many people have worked incredibly long and hard to keep this from happening, but now Hostess Brands has no other alternative than to begin the process of winding down and preparing for the sale of our iconic brands,” CEO Gregory Rayburn said in a letter to employees posted on the company website.

He added that all employees will lose their jobs, “some sooner than others.”

“Unfortunately, because we are in bankruptcy, there are severe
limits on the assistance the company can offer you at this time,”
Rayburn wrote.

The company shuttered 36 plants nationwide, including Twinkies’ 1930 birthplace plant in Chicago’s Schiller Park where workers baked the tasty treats–as well as Butternut, Home Pride, Nature’s Pride and Wonder breads.

In all, 18,500 workers lost their jobs.  It’s a death knoll– say bye-bye, adios, sayonara, and ciao–  for Hostess Brands and its employees.

The Twinkie, however, may survive in some other form.  Hundreds of potential buyers, including at least five major retailers, have expressed interest in Hostess’ brands, recipes, and some of its factories.

Jim Hightower, populist, muckraker and national columnist, had a different take on Hostess’ demise that never reached the mainstream press.

In his recent column Mr. Hightower gave us the rest of the story we hadn’t heard about:

Ripplewood is a private equity firm that had bought out Hostess Brands three years ago, including Twinkies.  Just before Thanksgiving, the firm asserted that it had been forced by greedy labor unions to kill off Hostess Brands.

Far from greedy, however, the 18,500 unionized workers were quite reasonable and very loyal – in fact, they had previously given back $100 million in annual wages and benefits to help the company survive.

The true greed in this drama is inside Ripplewood’s towering castle of high finance in Manhattan.

Rather than modernizing Hostess’ factories and upgrading its products as the unions had urged, the equity hucksters plundered the company to feather their own nests.

For example, they siphoned millions of dollars out of Hostess directly into their corporate pockets by paying themselves “consulting and management fees,” which did nothing to strengthen the company.

But it was this year that the rank managerial incompetence and raw ethical depravity of the vultures of Ripplewood fully surfaced.  While demanding a new round of deep cuts in worker’s pay, health care, and pensions – they quietly jacked up their own take.  And by a lot!  The CEO’s paycheck, for example, rocketed from $750,000 a year to $2.5 million.

Like a character in a bad Agatha Christie whodunit, Ripplewood – the one so insistently pointing the finger of blame at others – turns out to be the one who killed the Twinkie.

Along with the livelihoods of 18,500 workers.

It appears Twinkie was plundered– its worth quickly extracted by a private equity firm padding its own pocket before forcing the company into bankruptcy and then selling off what was profitably left to pillage. 

We also wonder if the employee pension plan will be given an attempted sacking before finally shuttering the 82-year-old business, turning off the lights, and locking the doors on the way out.

BCGTM, The international bakers’ union representing Hostess’ employees, repeatedly said that mismanagement and the debt placed on the company were responsible for the company’s failure– and not the strike.

The union criticized Hostess’ management for demanding benefit cuts while providing raises for the CEO and other top executives.  In 2011 for example, Hostess executives had received raises of up to 80%.  During the company’s liquidation, $1.75 million in bonuses ranging from $7,400 to $130,500 were made for 19 executives provided they meet certain benchmarks in managing the liquidation.

After Hostess announced that it was ceasing plant operations and laying off its employees, the union responded the same day, stating:

“When a highly-respected financial consultant, hired by Hostess, determined earlier this year that the company’s business plan to exit bankruptcy was guaranteed to fail because it left the company with unsustainable debt levels, our members knew that the massive wage and benefit concessions the company was demanding would go straight to Wall Street investors and not back into the company.”

Meanwhile, Chicago is believed to have received the country’s last Twinkie delivery as 20,000 boxes arrived for sale this Tuesday.  They were offered to customers at the regular price and there were no limits on purchases.

“They weren’t here long,” Karen May, manager of the Six Corners store in Chicago, said.  “We sold out quickly.”

Hostess’ workers were also sold out quickly, too– by Ripplewood and company executives, who in the end were no different than any other private equity corporate raiders on the block.

Unfortunately, expect more of the same to follow suit.

Leave a Reply

HumSentinel on Twitter

RSS Progressive Review

  • Greedster Cantor goes where he belongs
    Political Wire - Former House Majority Leader Eric Cantor (R) plans to join boutique investment bank Moelis & Co. as he embarks on a new career on Wall Street, the Wall Street Journal reports.Bloomberg says Cantor will be paid at least $3.4 million this yearJon Walker, Firedog Lake - Eric Cantor’s new job sends a clear message to all incumbents: toe the […]
  • Word: The Ukraine crisis
    Stephen Cohen, Nation - The new cold war orthodoxy rests almost entirely on fallacious opinions. Five of those fallacies are particularly important today:—Fallacy No. 1: Ever since the end of the Soviet Union in 1991, Washington has treated post-Communist Russia generously as a desired friend and partner, making every effort to help it become a democratic, p […]
  • Fast food workers plan civil disobedience
    NY Times - The next round of strikes by fast-food workers demanding higher wages is scheduled for Thursday, and this time labor organizers plan to increase the pressure by staging widespread civil disobedience and having thousands of home-care workers join the protests.The organizers say fast-food workers — who are seeking a $15 hourly wage — will go on stri […]
  • Things we hadn't started to worry about yet
    Huffington Post  - Five brave geckos sent to space for zero-gravity sex experiments have died, Russian officials announced.On Monday, the descent module containing the lusty lizards and other experiments from the Foton-M4 satellite launched in July returned to Earth."All geckos, unfortunately, died," the Russian Federal Space Agency said in a state […]
  • Politicians far behind public on choice issue
    Some other examples of how Americans differ from their politicians […]
  • Black while walking illegal in Beverly Hills
    Charles Belk photoAddicting Info - Apparently, it doesn’t matter where a black person walks in this country. Police will always find a way to arrest them and violate their rights. But this time, officers bit off more than they can chew.Television producer Charles Belk is tall, bald, and black as are many African-American men in America. However, based on tha […]
  • Pocket paradigms
    The frightening thing about Auschwitz is not that some would deny it but how real it still seems. The frightening thing about Auschwitz is that our leaders go to honor it while still denying Guantanamo and Al Graib and Palestine. We will know that we have finally learned the Holocaust's lessons when we no longer hear new echoes of it. - Sam Smith […]
  • Word
    Some cause happiness wherever they go; others whenever they go - Oscar Wilde […]
  • New info on Clinton's collusion wiht Israel
    Electronic Intifada - “I’ll back you and protect you, I’m your guy … it’s very upsetting … all the Arabs are the same,” US President Bill Clinton told Israeli Prime Minister Ehud Barak in a 19 July 2000 meeting during the failed Camp David summit with Palestinian Authority president Yasser Arafat.Only months earlier, in March 2000, Clinton displayed the same […]
  • Deer Isle's model worker cooperative
    Community Wealth - Beloved for its charming landscapes and fresh lobster, the rural community of Deer Isle, Maine is now gaining attention in the cooperative world. When Verne and Sandra Seile, proprietors of Burnt Cove Market, V&S Variety and Pharmacy, and The Galley, decided to retire last year, they sold their businesses to their employees. With 62 ne […]
  • Bringing comic books into classrooms
    NY Times - When fifth graders at P.S. 124 in Brooklyn were given a sneak peek last winter of “Theseus and the Minotaur,” a retelling of the classic Greek myth by the French writer and cartoonist Yvan Pommaux, they immediately took to the tale, their teacher, Daniel Tandarich, said. And why not? The book, the first from Toon Graphics, is filled with gruesomel […]
  • Foois' goal
    Sam Smith, 2004 - During the Cold War someone defined the difference between the major parties this way:In America everything is permitted that is not prohibited.In Germany everything is prohibited that is not permitted.In France everything is permitted even though it is prohibited.In Russia everything is prohibited even though it is permitted.One of the iro […]
  • Hollywood revenues hit 8 year low
    Hollywood Reporter  -To understand the upside-down summer at the box office, consider that Sony's 22 Jump Street, made for about $50 million, ended up grossing nearly as much in North America as The Amazing Spider-Man 2, the studio's $200 million-plus tentpole that represents the type of movie on which Hollywood long has relied to drive summer slat […]
  • GOP drug czar saw nothing wrong with beheading dealers
    LA Times, 1989 - William J. Bennett, federal drug policy coordinator, said Thursday night he had no moral qualms about beheading convicted drug dealers."Morally, I don't have any problem with that at all," Bennett said when asked on the CNN program "Larry King Live" call-in television show, whether he would support Saudi Arabian-styl […]
  • HRC backs GMO
    Nation of Change - In her June 25 keynote address to the BIO International Convention in San Diego, Calif., Hillary Clinton voiced strong support for genetic engineering and genetically engineered crops. She earned a standing ovation that day by stating that the biotech industry suffers from a public perception problem and that it just needs “a better vocabu […]