First Pizza Hut, Now Twinkies maker Hostess laying off people

Its a bad situation, but I have to agree with the they should be happy to have a job group.

 

Bush White House Economist Glenn Hubbard explained the wave of business bankruptcies during 2007/2008 as "creative destruction." Did you trailer-trash have anything to say about that back then?

 

Would you want 25% interest in a company that was $812 million dollars in debt and under bankruptcy in exchange for severe pay and benefit cuts?

I wouldn't.

Fact is, sales of Twinkies and Wonder Bread has been in decline for a long time as people decide to eat healthier food. The unions didn't kill Hostess, cultural evolution did.

Hostess died because the free market lives. It's ironic seeing supposed Republican "Free Market" advocates bemoan the loss of a company that was no longer competitive while they railed against saving GM.

 

That made me chuckle. Hey, we're bankrupt... do you want a piece of the company?

 

and it counts! repped.

 

10 names you know that came back from bankruptcy: http://www.businessnewsdaily.com/2510-bankruptcy.html

 

Can you list the thousands that didn't? Thanks.

 

Bankruptcy is fairly common (the airlines do it on a regular basis), but liquidation is pretty much the end of it - its what you do when you're done trying to come back from it. That said, someone will likely by those production facilities and end up hiring most of those workers back - though on totally different terms, obviously.

 

Totally agree. Let's face it Hostess was a bad company with a marketing strategy and products that hadn't changed since the 1950's. Even without the unions Hostess was already in trouble for years.

Also for those bashing unions altogether consider that there were two large unions battling with Hostess management. One of them the Teamsters agreed to the terms while the bakers didn't Hostess needs both to operate. This is a case of one union making a bad decision, which happens, this isn't a case that unions are out to destroy business.

Companies fail and they get bailed out, blame Obama for not letting the market run its course. A company fails and Obama get's blamed for letting the market run its course.

 

Yeah, and let's think about the comparison further. GM/Chrysler - creates millions of jobs across America. GM fails, and we all feel the reverberations.

But god forbid no more Twinkies. What will happen to America? What will we eat? What will happen to all those endocrinologists?

The travesty. So sad.

 

No I can't. Can you? What's your point? Mine is that BR is not necessarily the end... as others are also pointing out... or did you even notice?

 

giddy, do you not understand what "liquidation" is?

 

So in otherwords, you support 'too big to fail' rhetoric. Thanks for the clarification.

 

I support effin common sense.

 

Yeah? You should have bought blockbuster stock when it was cheap eh?

 

Shows you have no real understanding of a reorganization via Chapter 11 and DIP financing. There is a reason why unions have taken an ownership stake in a bankrupt entity before.

Also, Major suggested that such an offer should have been tried. I simply pointed out that it was tried, in addition to other offers that did not offer an ownership stake.

 

Of course I do. Do you understand that liquidation was possibly avoidable?

From the OP: "Hostess says it will be forced to liquidate and lay off most employees if workers mount a widespread strike."

The workers seems to not like the risk of ownership; they just wanted the salary and the benefits.

YOU DIDN'T BUILD THAT....

 

Unions take ownership stake in companies that have a future. They are not stupid rubes and blindly take equity in exchange for pay cuts in companies like say Blockbuster, Worldcomm, or the maker of Twinkies & Wonderbread.

Duh.

 

That just depends on the individual unions' view of their restructuring plans and whether they felt the cuts in wages/benefits and the elimination of debt could make the company successful and valuable - and how much stake they were being given. The Teamsters, for example, accepted a contract with an 8% ownership stake in Hostess. Obviously the Bakers didn't put a lot of value in whatever stake they were offered.

It probably didn't help the unions viewpoint seeing that the execs were all giving themselves raises right before declaring bankruptcy, though. That sounds like a company trying to cash out rather than fix things.

 

Blockbuster is a going concern with a focus on its online rental operations. So...it has a future. Worldcom was involved in cooking the books and were largely shut down by the regulators.

Neither of these examples are remotely comparable to the situation at hand.