Hostess (Twinkies Out of Business?)

[johnp]

cant wait too long imo. once they announce that they sold the brand to a new company and will be producing them again there will be no market.

That's what I was thinking. Won't some company just buy them and keep the entire product line going? Or is the brand dead forever?

 

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[Vigilante]

They'll be back on the shelves inside of a year under a new "Hostess" company, likely with the recipes acquired by a competitor along with the trade names. The longer it takes, the less equity there is in the brand so I really think it will be less than a year before they're back in production.

 

[AllenCrawley]

They'll be back on the shelves inside of a year under a new "Hostess" company, likely with the recipes acquired by a competitor along with the trade names. The longer it takes, the less equity there is in the brand so I really think it will be less than a year before they're back in production.

Yep, I agree.

 

[Kak]

Sorry the 18k deserved this. The ultimate F*ck you to ungrateful employees. Well done hostess. I would have probably sent all production to China or Mexico though.

 

[Alana]

Zombieland....exactly...that was my first thought. Second thought was: omg...I have to start making/selling Twinkie-like goodies asap and dominate the now vulnerable market!!!

I'm sure the word is out now...but Bimbo bought the company and it's speculated that they will suck up the assets and intellectual property and move everything to a right-to-work state (and hence Twinkies will continue to be made)

Rest easy my fellow Americans....our Ho-Hos are safe for now....

 

[CarrieW]

lol

 

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[MMatt]

I was wondering if that $7600 would ever get paid for but you never know. There's one born every minute. My wife has sold many items on ebay that had this kind of ferver behind it and buyers always paid.

If you take a look at the feedback, negative feedback was left for the seller claiming a false ad, so I'm assuming the ad was never paid for. Also, both the buyer and seller didn't have much feedback so it was fishy from the start.

 

[AllenCrawley]

If you take a look at the feedback, negative feedback was left for the seller claiming a false ad, so I'm assuming the ad was never paid for.

Haha, the buyer claims the ad is false because the picture shows many boxes but the seller was only selling one box. I don't agree is was a false ad as the seller was clear that he was selling 1 box. Yea, I bet the buyer would not have paid even if it was for all 22 boxes. LOL, if I was the seller I'd tell him I'll include the other 21 boxes if he pays up.

EDIT: this seller listed all 22 boxes with a starting bid of $1000.

http://www.ebay.com/itm/Hostess-twi...540?pt=LH_DefaultDomain_0&hash=item2ec38c1e54

 

[MMatt]

Ya I'm pretty sure the buyer never had intentions to pay for the twinkies.

 

[ChickenHawk]

I would have probably sent all production to China or Mexico though.

Hah! I can see the headlines already. "Corporate Raider, KAK, buys iconic American brand and outsources U.S. jobs." The details of the story would highlight Joe Sixpack, who lost his job and now can't support his family of six (including little Timmy, whose rare health condition means that the loss of health insurance has certainly doomed him -- your fault, btw.) Meanwhile, your expensive hobby, house(s), car(s) would be shown in great detail, along with the most unpatriotic or greedy quotes they can dig up.

Soon, an Occupy-type camp would spring up outside your headquarters, with rabble crapping in your front entryway and burning twinkies in protest, with the media fanning the flames.

Can't you just see it?

If I bought the brand, I'd move production to a right-to-work state, maybe picking All American smalltowns where you could get some good PR out of it, or at the very least, minimize the danger of bad PR. Hey, can I suggest here in Alabama?

 

[Kak]

I stand by my statement. Honestly Id produce them in the absolute cheapest, rock bottom way I possibly could and still be allowed to sell them in the US. If they refuse to come to work they are welcome to work somewhere else. Screw em.

I would be flattered if occupy would protest me.

 

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[CarrieW]

there would be alot of people who would work for min wage today.

 

[The-J]

there would be alot of people who would work for min wage today.

There are a lot of people who would work for less than minimum wage.

 

[ChickenHawk]

I stand by my statement. Honestly Id produce them in the absolute cheapest, rock bottom way I possibly could and still be allowed to sell them in the US. If they refuse to come to work they are welcome to work somewhere else. Screw em.

I see the logic, but I still think the bad PR would negate the cost-savings and potentially destroy the brand. The story has gotten way too much publicity to quietly move production out of the country, and with the anti-business bias in the media (IMO), you'd be fighting an uphill battle. Just my opinion though!

 

[CarrieW]

I think that people just want their twinkies!

 

[EN_VY]

Yet another example of how a job isn't safe, even if it's with a well established company.

 

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[Kak]

It is all about balancing the PR negatives with the offshore margin increase. I don't necessarily think that most people really give a crap. Kind of like chick fil a. Bad press and good press depending on what strong feelings were had. Most people don't care what chick fil a thinks.

 

[ChickenHawk]

I just did some research. Apparently, the striking workers made $16 to $18 an hour. The average wage in their field is $12.57. Hostess was asking for wage concessions of 8 percent. Even with an 8% cut, the workers would have made 24% more than the industry average. Plus, they were guaranteed wage increases for the next several years.

It sounds to me like the workers let emotions cloud their judgment. No one likes a pay cut, but sometimes the numbers speak for themselves. I think there's a lot of that in this country right now, where logic is completely ignored in favor of things that feel good emotionally, but don't add up in the long run.

BTW, if anyone's interested, here's the story that had details on their pay, etc.
No More Twinkies: Unions and the Death of Hostess

 

[Kak]

The balls you must have to demand a raise in > 8% unemployment. They are either born stupid or work at it their whole life.

 

[ChickenHawk]

A side note...When I grocery-shop, I notice how much things cost and try to get good deals (probably like most people.) For the past several years, I've noticed that Twinkies and Ho Hos cost more than other alternatives, such as Little Debbies. I haven't bought twinkies in forever. I used to buy them. But somewhere along the line they became too pricey compared to other snacky temptations.

This is what too many people fail to understand. Basic economics. Price goes up, demand goes down. It doesn't matter whether you're a union worker or a twinkie -- unless your product perceived to be superior in some way. Somehow, I doubt these particular workers were superior to their competition.

 

[theDarkness]

It is all about balancing the PR negatives with the offshore margin increase. I don't necessarily think that most people really give a crap. Kind of like chick fil a. Bad press and good press depending on what strong feelings were had. Most people don't care what chick fil a thinks.

Yeah I think people might get angered by the bad PR and the 60 minute specials or whatever, but ultimately when they're at the store I think they'll still reach for the twinkie box (if they were already twinkie types).

Rage succumbs to apathy very quickly. Even in cases where I find some practice of some company objectionable, time goes by and it just becomes a case of yeah that one company somewhere . . . can't remember exactly which one . . . they did some shitty stuff that one time . . . can't remember what exactly.

 

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[InMotion]

The investors make money, the private equity firm makes a killing and the workers and the brand all lose out.

Why does it seem like whenever you see a company like this shut its doors, there's a PE firm behind the scenes plundering away?

The balls you must have to demand a raise in > 8% unemployment. They are either born stupid or work at it their whole life.

Executives seem to do it all the time

 

[Kak]

Why does it seem like whenever you see a company like this shut its doors, there's a PE firm behind the scenes plundering away?



Executives seem to do it all the time

Yeah there is definately loads of money in buying a business to shut it down and stop it from making money. 🙄 Great logic...

If the employee has negotiating leverage then I dont care if they ask for more. Ex: another firm offered me more. Will you match or beat it?

If i am already paying them as much as everyone else is offering they don't have a leg to stand on. They are more than welcome to find another job.

 

[CommonCents]

Maybe they are using the oriental rug going out of business model

Bimbo bakeries will prob buy the assets. I doubt the brands will disappear for long. They'll be manufactured in non union plants.

In the leveraged buyout talk, it all sounds routine. But aren't lenders sophisticated enough to do their due diligence before lending in those situations?

 

[InMotion]

Yeah there is definately loads of money in buying a business to shut it down and stop it from making money. Great logic...

Did I say it was logical? PE firms are looking for big relatively quick payouts at any cost to the company. I don't know the details of this deal but usually what happens, when a PE firm moves in with an LBO (from my understanding), they start swinging the axe to cut costs, even at the expense of the business, so the company itself can pay back the loans; anything goes. If they cant get the loans paid back through the companies operations then adios. Most PE firms, if not all, are plunderers, they milk the company for what its worth and move on (from my understanding).

I take no stance on whether its right or wrong morally. They are just money chasers IMO not entrepreneurs.

 

[DeletedUser2]

I see the logic, but I still think the bad PR would negate the cost-savings and potentially destroy the brand. The story has gotten way too much publicity to quietly move production out of the country, and with the anti-business bias in the media (IMO), you'd be fighting an uphill battle. Just my opinion though!

the bad pr now, will become "remember the twinki" next year after they relaunch in a different location, and put a spin on it, "we are just a little company and managed to save the twinki"

this will be a windfall for them next year after they sell the trademarkes, and IP, to a new company (while retaining some sort of licenseing deal) and relaunch!

Ill bet $20 bucks on that!


Z

 

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[SBS.95]

It truly is terrible to see that there is going to be 18,000 (more) unemployed workers this holiday season, but if there's one good thing that comes from this it's that hopefully a majority of the public gets to see a good example of the unions coming in and screwing everything up. Forcing the hand of the employer and refusing to budge on a pay cut for the workers and thereby causing them to all lose their jobs -- I'm sure the employees are loving the protection of their working conditions right about now.

God I hate unions...

 

[InMotion]

Time to liquidate all the Twinkies people just bought to resell at exorbitant prices :smx4:

Relax Twinkie Lovers, Brand Likely to Survive 

 

[Kak]

Did I say it was logical? PE firms are looking for big relatively quick payouts at any cost to the company. I don't know the details of this deal but usually what happens, when a PE firm moves in with an LBO (from my understanding), they start swinging the axe to cut costs, even at the expense of the business, so the company itself can pay back the loans; anything goes. If they cant get the loans paid back through the companies operations then adios. Most PE firms, if not all, are plunderers, they milk the company for what its worth and move on (from my understanding).

I take no stance on whether its right or wrong morally. They are just money chasers IMO not entrepreneurs.

online.wsj.com/article/SB10001424052970204124204577154521024107002.html

You should check this out, and anyone else who wants to understand private equity better.

Edit: sorry it is subscriber content. PM me if you want me to send a c&p.

 

[InMotion]

Kak, how many LBO deals have you done? Just curious, I haven't done any myself but I just wanted to know your opinion since you know every F*cking thing lol. I took this as an attack coming from you, so if it wasn't sorry, but if it was go F*ck yourself