Seeking Alpha

Hostess officially closes down its business and lays off all 18.5K of its employees. Though the...

Hostess officially closes down its business and lays off all 18.5K of its employees. Though the company blames a national strike by workers as crippling its efforts to emerge from bankruptcy, a lineup of brands decidedly off-trend also contributed. Will a major food player such as Grupo Bimbo (GRBMF.PK), Hillshire Brands (HSH), Flowers Foods (FLO), or Post Holdings (POST) take a stab at buying out well-known names such as Wonder Bread, Ding Dongs, or Twinkies from the Hostess rubble?
Comments (29)
  • One union brought down the entire company and cost other union workers their job. Yes, I know the pay cuts were tough, but when the company has no cash, you can't expect great wages.
    16 Nov 2012, 08:15 AM Reply Like
  • There is a factory in my hometown....a three state factory...see ya ...and last I looked not a lot of jobs for you to find...and defiantly not at your Union wage....and Benefits...
    16 Nov 2012, 08:19 AM Reply Like
  • At least we know that long after the factory shuts, the twinkies will live on forever in our landfills (they don't decompose). Here's the a product that truly stood the test of time (and caused diabetes).
    16 Nov 2012, 08:32 AM Reply Like
  • I don't know if you meant it as a joke (they don't decompose) but according to Wiki "2008 film, WALL-E, perpetuates the urban legend that Twinkies have an infinite shelf life" but in reality they have a little longer shelf life of 25 days or so. Now I know why I used to get that "yuk" feeling whenever I bought them on long distance car trips.
    16 Nov 2012, 09:24 AM Reply Like
  • The intransigence of the unions in these types of negotiations doesn't help their members, ... it costs them their jobs while the union leaders just move on to the next company to tear apart. I was a union member at Eastern Airlines and watched them send us into the unemployment lines while the union leaders never missed a paycheck. The union leadership is only after self-preservation, no real interest in the actual workers.
    16 Nov 2012, 08:37 AM Reply Like
  • wcass01- I would agree. In my life I have belonged to 3 unions, and got screwed by all 3.
    16 Nov 2012, 09:06 AM Reply Like
  • Besides that 18,500, I wonder how many other workers involved in selling and buying supplies, transportation etc will get the ax.


    This won't make the next UI report look any better.
    16 Nov 2012, 09:05 AM Reply Like
  • Always, the unions, but never the management. The problems always start from top to down not the other way as most people that are against unions see it. The worker on the floor does not makes decisions that cost the companies millions or even billions of dollars. So to all nay sayers of the unions get your head out of your collective a ---s and look at the whole picture.
    16 Nov 2012, 09:21 AM Reply Like
  • No, I'm pretty sure it was the unions. You can't have people doing mindless work asking for 80K + pensions in the modern US. If everyone settled for what the market was willing to pay them, they would still have a job instead of now joining the unemployed. Blaming the management in these scenarios is a pointless exercise. Management had hands tied behind their back with no control over the largest input cost...the labor. Chalk another one up for organized labor. Keep it up and we'll be back at 10% unemployment in no time. Auto manufacturers are watching very closely.
    16 Nov 2012, 10:49 AM Reply Like
  • When workers unionize, they become part of management. They collectively influence one of the largest expenses categories on the PL. As such, they have responsibility for that category, thus they become part of management. If they don't manage that category to adjust to market pricing (junk food isn't exactly a necessity), then if they company fails, its their fault.
    16 Nov 2012, 04:46 PM Reply Like
  • Zubikov, that is very intelligent. If everyone "settled" for what the "market" was "willing" to pay them, they would still have a job. The market should love someone like you and whoever employs you, could probably save a lot of money if paid you minimum wage starting "today" and if you are a business owner, 92% of the consumers who patronize your business should stop today...... I would love to see if you settle.
    22 Nov 2012, 09:50 AM Reply Like
  • The unions set up rules to make the operations not efficient. They protect the workers until no workers to protect.


    Nice job, unions and what is the next corporation you're going to wreck? Eventually we have to buy Wonder bread from China as you guys make the outsourcing feasible even for breads a month old.


    I protest with the sign The parasites have to go.
    22 Nov 2012, 10:26 AM Reply Like
  • Oxymorons, if I was all of the sudden paid minimum wage, I wouldn't settle. I would fight tooth and nail to get ahead and earn a higher wage. That's actually what I've been doing my whole life, fighting to get ahead while sacrificing many things along the way. So I think I make a bad example for your case. By the way, what are you proposing as an alternative? Let the union leaders run rampant and dictate everyone's wage by what they decide is fair while they're destroying productivity? This is a 21st century America. We have learned enough through past mistakes, labor economics have dramatically changed with globalization and a shifting demographic here at home.


    A union should not be dictating a preset wage for any company small or large. Many of the fired employees who worked really hard would be better off without a union, since they would have a legitimate change for quicker promotions, better raises and a more rewarding job. You as an job seeker always have a choice, nobody is forcing you to take a minimum wage. You clearly don't understand this relationship, so there's no point for me to argue further.
    27 Nov 2012, 03:19 PM Reply Like
  • zub:


    Unions do, in fact, provide for rapid advancement in pay and benefits.... for union bosses.
    27 Nov 2012, 03:24 PM Reply Like
  • Chicago more on the issues ...the union looked at the books ..and told the members that this was areal possibility...members still voted to their language..instead of half a loaf.....they get no loaf....twinkles, ding dongs and wonder trademarks will be bought and produced else where....they ****in their own mess kit
    16 Nov 2012, 09:29 AM Reply Like
  • Chicago-John I am not bashing all unions, nor am I anti-union, in fact the large downtown Chicago building I manage projects for, we almost always hire union workers and they do a great job. What I am saying is, if the company you work for is on its last leg and all the other unions have agreed to wage cuts, why would one union decide to bring down the entire company. Doesn't make sense to me. One last thing, when I see bad management I am more than happy to bash them to.


    Have a good day.
    16 Nov 2012, 09:33 AM Reply Like
  • The brands will live on; there's value to them. They could be picked up by investors and managed back down to regional distribution. But you're right, the union shop will be long gone. Ironic, isn't it - unions have supported Democrat candidates for decades, and Social Security, Minimum Wage, and Obamacare - retirement and healthcare entitlement programs, heralded by Democrats, ultimately have completely unwound the union value proposition.
    16 Nov 2012, 11:06 AM Reply Like
  • It would be no great loss if Wonder Bread went away forever. The only wondrous thing about it is how they managed to stay alive for so long with so little flavor and nutrition.
    16 Nov 2012, 11:17 AM Reply Like
  • Makes a good sammich...
    16 Nov 2012, 08:29 PM Reply Like
  • Another union "victory!" Thank goodness we have unions "protecting" all those American jobs.


    Nice job. Whom can you shut down next?
    16 Nov 2012, 02:24 PM Reply Like
  • Norma Rae won the battle again....and lost the war.
    16 Nov 2012, 06:22 PM Reply Like
  • It is a bad day for capitalism, esp. our style of capitalism.


    * Unions are out-of-touch or really stupid (it is more than stupid but I cannot find a word from the dictionary). If the patient is dying, you do not want to shake him hard.


    They're the parasites and they will die if no more food to suck. The dream of owning the company will be dream and they never wake up.


    * The workers are really dumb and manipulated. Do you think you can protest and win in this kind of economy?


    * The politicians will not bail them out. It is the timing and the election is over and the 8,500 votes are not important now. Usually they can blame China for stealing the jobs, but they cannot as these jobs can't be outsourced.


    It is a lose-lose-lose situation and only stupid folks will get into this situation.


    There will be a buyer and may be 25% of the jobs will be saved and most likely with a clause to get rid of the unions. Factory workers will be making 20K working for 28 hours week, so they will not be qualified for any medical insurance and other full-time benefits. It is a tough world out there. Be realistic and check who's hiring for similar jobs that pay $50K with benefits.
    18 Nov 2012, 04:45 PM Reply Like
  • Bimbo will buy it..move the equipment to Mexico..and deliver from there..
    19 Nov 2012, 10:32 AM Reply Like
  • Blame whoever you want,I read Hostess employees were making $19hr. Gotta feeling that had a lot to do with their demise. Those employees will never see $19 an hr again doing what they were doing at Hostess. Brand will be bought by some billionaire jobs shipped to China or somewhere; that's the name of the game. Foxconn Apples(and others) primary vendor in China employs 1.2 million Chinese at $300 a month a pop. May as well put a wax statue of a stateside Hostess employee in the museum of natural history.
    19 Nov 2012, 07:30 PM Reply Like
  • Some jobs cannot be outsourced. You do not want your Wonder bread delivered from China.


    Unions are still king in some jobs like the phone company pole climbers.


    There are many other factors beside wage difference for Apple jobs: 40,000 technicians and engineers, flexible OT..., availability of rare earths, huge internal market...
    20 Nov 2012, 09:56 AM Reply Like
  • You don't have to go to China. Ford pays its workers in Hermosillo, an hr or so from the AZ border $35 a week to assemble cars for them. If you look at most anything in your home from clothes you wear to appliances to vehicles,furniture whatever even flooring you walk on you wont find too many made in America stickers on any of it. There is a reason Asiatic countries like China and others have surpluses while western countries carry huge deficits. Those nations make everything western consumers consume in our consumer world. We' ve been sending more money abroad than we take in for decades.They do it the other way. Used to be the US made everything, not anymore. Those Hostess employees will never again make the money they were making doing what they were doing, Several years ago I watched some roundtable with the CEOs of CAT, Google and Xerox. All 3 agreed this business model i just described was not sustainable long term
    20 Nov 2012, 06:25 PM Reply Like
  • Incompetent management/executive figures gave themselves an 80% salary increase right before bankruptcy than turned around and blamed unions for the collapse of the company. Union workers at Hostess could have worked for nothing and the company would still be broke....blame unions all you want, there are no signs the executives at this company could even manage to pick their noses and wipe their butts with any proficiency, let alone manage this company to profitability. This corporation was mismanaged to death by ignorant duds...notice other corporations have shown zero interest in hiring these pathetically underqualified executive pretenders.
    22 Nov 2012, 02:41 PM Reply Like
  • This company was so poorly managed at the executive level, union workers could have worked for free and the company still would have been broke. Hannity and Limbaugh have brainwashed so many of you to blaim the unions, always the unions, and to never question the decisionmakers who control the company....the executives. Executives of this company gave themselves an 80% pay increase right before the bankruptcy. Let's blame the white collar Bain-style criminals who destroyed this wasn't the unions.
    22 Nov 2012, 02:41 PM Reply Like
  • Bob, obviously you're one of the union parasites. Many managers are working for $1. The turn-around specialist was hired for a comparably salary for his expertise.


    The unions just bring down one company after another until the parasites died with the host. Why did the unions make delivery so inefficient?
    22 Nov 2012, 03:23 PM Reply Like
DJIA (DIA) S&P 500 (SPY)