Ding Dong Unions killing off another great American institution

[Peach]

Hostess garnered many competitors, and has not stayed ahead of them. The generics are cheaper.

Entenmanns, Little Debbie, Kraft, Sara Lee, etc.

That is true. So why hasn't Hostess managed to stay ahead? Bad business planning? The competition is using cheap foreign labor or sub standard materials? Lack of investment capital due to higher union labor and legacy costs?

What could it be?

Similar products COMPETING IN THE MARKET! Dolly Madison, Little Debbie, Drake's, etc.

 

[Big Fitz]

Entenmanns, Little Debbie, Kraft, Sara Lee, etc.

That is true. So why hasn't Hostess managed to stay ahead? Bad business planning? The competition is using cheap foreign labor or sub standard materials? Lack of investment capital due to higher union labor and legacy costs?

What could it be?

Similar products COMPETING IN THE MARKET! Dolly Madison, Little Debbie, Drake's, etc.

Yes... competition is a good thing. Better product for lower prices. Those who do not improve with the public tastes lose out and go under.

There are also behind the scene things like I mentioned that can contribute to why a company cannot respond to the changes in public taste and ultimately doom it. It was an industry leader, and still is but it's dying. Why?

 

[MeBelle]

So we are cheering on the race towards lower living standards?

In researching this...Hostess pays higher salaries than every single one of it's main competitors. Note I said salaries.
One year before filing bankruptcy the highest 8 executives received generous wages as high as 80%!!!

I am no union backer...but the problem seems more upstairs than the floor.
Not saying the unions are not a problem...previous pensions and benefits are higher than the company can afford.
But it takes some REAL assholes to give themselves an 80% raise and want to cut employee benefits.

A bakery outlet clerk is paid an average of $16-$18 per hour.
Only a HS diploma required.
Pay does not include benefits.

Took me a hecka' long time to even find THAT out!
Reminds me of the union employee that was paid $20 an hour slapping labels on beer bottles. Well, that shop closed...wonder why.

 

[Trajan]

No, I'd say they were mismanaged, ala GM, the unions were never all of the problem, they were a good half and the rest was poor engineering, poor design etc...and mgt. caved back in, when was it 83 when the unions really pushed them,that was the big showdown.... they should have let them strike and had it out...instead over the decades, they went from what, 1.5 million work workers to...well here we are....

Hostess had a huge part of the market but they pushed to fast and, could never consolidate their work force effectively.

Hostess garnered many competitors, and has not stayed ahead of them. The generics are cheaper.

Entenmanns, Little Debbie, Kraft, Sara Lee, etc.

you're apparently contradicting yourself...

 

[Big Fitz]

So we are cheering on the race towards lower living standards?

In researching this...Hostess pays higher salaries than every single one of it's main competitors. Note I said salaries.
One year before filing bankruptcy the highest 8 executives received generous wages as high as 80%!!!

I am no union backer...but the problem seems more upstairs than the floor.
Not saying the unions are not a problem...previous pensions and benefits are higher than the company can afford.
But it takes some REAL assholes to give themselves an 80% raise and want to cut employee benefits.

A bakery outlet clerk is paid an average of $16-$18 per hour.
Only a HS diploma required.
Pay does not include benefits.

Took me a hecka' long time to even find THAT out!
Reminds me of the union employee that was paid $20 and hour slapping labels on beer bottles. Well, that shop closed...wonder why.

Wait... a Bakery Outlet Store CLERK?!? The cashier, you mean? Gets paid that much?!?!?!

Shit, I know professional drivers with haz mat endorsements who don't get paid that much!

This is like in Manhattan or San Fransicko, right? You know where a small soda costs 12 bucks?

 

[Big Fitz]

Hostess garnered many competitors, and has not stayed ahead of them. The generics are cheaper.

Entenmanns, Little Debbie, Kraft, Sara Lee, etc.

you're apparently contradicting yourself...

True, Generics are just store brands nowadays. They're usually made by the same company who just re-labels them and ships em for the dollar stores all over the nation in different packaging.

Same holds true for paper products like store brand toilet paper and paper towels.

 

[Peach]

So we are cheering on the race towards lower living standards?

In researching this...Hostess pays higher salaries than every single one of it's main competitors. Note I said salaries.
One year before filing bankruptcy the highest 8 executives received generous wages as high as 80%!!!

I am no union backer...but the problem seems more upstairs than the floor.
Not saying the unions are not a problem...previous pensions and benefits are higher than the company can afford.
But it takes some REAL assholes to give themselves an 80% raise and want to cut employee benefits.

A bakery outlet clerk is paid an average of $16-$18 per hour.
Only a HS diploma required.
Pay does not include benefits.

Took me a hecka' long time to even find THAT out!
Reminds me of the union employee that was paid $20 and hour slapping labels on beer bottles. Well, that shop closed...wonder why.

Little Debbie's products have been pushing out the Twinkie/Snow Bal space for years now. I used to like Snow Bals but started noticing I could not find them. NATURE VALLEY also competes as allegedly HEALTHY, as do the Power Bars. 7 Up suffered from Sprite competition also, I do not see union activity as the problem; more people LIKE Sprite, though I do not.

 

[Trajan]

damn...sno balls are gone?

edit, not there are s still around..damn I want one now...

http://www.hostesscakes.com/snoballs.asp

 

[uscitizen]

Sorry guys - uscitizen appears to be right here.
I looked up Hostess competitors...the largest one is Awrey Bakeries. In looking at their company structure - Hostess looks to have a significantly higher executive and manager package by far. And giving themselves an 80% raise while seeking to lower employee benefits is damn unethical, not to mention doing so between two bankruptcies.
Not saying the union is not a problem...but their does certainly appear to be a strong entitlement attitude by management at least as much as the union.

Those workers should go find another job if they are unhappy about their pay....thats what i've always done.....

Just as the executives should have vs give themselves a big pay raise?
seems like the workers cannot give themselves a raise hence collective bargaining.

 

[uscitizen]

American are going to have to put their boot straps on if they are going to have any chance at creating a better future for their children....Economic forces eventually take over...Political might can only take you so far until...

Things might get better in the future, but this country is not the fair tale land that many used to think it was....

Yep things will get worse before they get better and they will NOT get better unless we pull our collective heads out of our butts.

 

[Big Fitz]

damn...sno balls are gone?

edit, not there are s still around..damn I want one now...

Sno Balls® from Hostess Cakes (Our Products)

Naw. They're just being made better and cheaper, elsewhere because Hostess for some "unknown reason" can't do it better anymore. It must be black magic or something stopping them.

 

[uscitizen]

damn...sno balls are gone?

edit, not there are s still around..damn I want one now...

Sno Balls® from Hostess Cakes (Our Products)

Naw. They're just being made better and cheaper, elsewhere because Hostess for some "unknown reason" can't do it better anymore. It must be black magic or something stopping them.

Cranialanalitis.

 

[Trajan]

I LOVE amazon..I just ordered some....and devil dogs to, they are the bomb....

 

[ThinkCritically]

Sorry I edited previous post!

American are going to have to put their boot straps on if they are going to have any chance at creating a better future for their children....Economic forces eventually take over...Political might can only take you so far until...

Things might get better in the future, but this country is not the fair tale land that many used to think it was....We cannot simply vote our economic problems away... We have been buying cheap exports from cheap labor for decades.... and the chickens have come to roost.

 

[Peach]

Entenmanns, Little Debbie, Kraft, Sara Lee, etc.

you're apparently contradicting yourself...

True, Generics are just store brands nowadays. They're usually made by the same company who just re-labels them and ships em for the dollar stores all over the nation in different packaging.

Same holds true for paper products like store brand toilet paper and paper towels.

CORRECTION: Generics, i.e., store brands, and other name brands have been on the market for years.

 

[uscitizen]

A US economy based on consumer spending cannot long last.
esp when combined with globalism.

 

[ThinkCritically]

A US economy based on consumer spending cannot long last.
esp when combined with globalism.

exactly...we are experiencing over consumption blow back so to speak (in the labor market). American's can benefit for so long from a debt until its time to pay it back, and let me tell you paying back the debt is going to break our balls!

 

[iamwhatiseem]

We always assume that large corporations want their companies to stay in business, but that may not be true. The corporations may decide they can make more profit by allowing a company to go under gradually than trying to keep it alive beyond its projected life span. There are a number of examples of this practice, but I don't know the term used to describe this act or even if there is a term.

I don;t know about that - but I will not be surprised if we don't see a sale here. When top executives vote themselves HUUUGE raises right before a bankruptcy and right before union troubles - they clearly don't give a rats ass about the company they run.
I would never do this.
About 40% of my compensation is incentive pay. When the economy collapsed I lost it all in 2008 and 2009. Got a little in 2010, and slightly more in 2011.
Finally this quarter I received full compensation. Why am I saying this? Because when the company suffers - everyone should suffer. Including the top guy.
These hostess guys are horrible managers. The first thing to bring this company to life would be to engage in a clearing house on the top floor.

Classic example of how management incentive does not line up with shareholder incentive.....shareholder ultimate incentive (maximize profits for the firm, thus increasing share value).....management's ultimate incentive (maximize personal wealth, thus increasing personal wealth)......This is why corporate executives should never get salary......By paying them purely in shares it lines up the shareholders interest with managements interest......If you are invested in a corporation that does not pay executives in this manner, then you are exposing yourself to this risk.

I agree - but I would go further and say that union members incentive should also align with what is good for the company. Union contracts absolutely never take into consideration what the company is facing ala - competition, foreign labor, future capital requirements, rising healthcare costs etc. etc. -- Never.
Show me a union that will agree to a 5 year wage decrease to pay for retooling a plant - HA! Will never happen.
So what do companies do to stay alive in a uber-competitive market where consumers only care about price? They outsource...close factories and Mexican and Chinese peasants do what these folks once did.
Just another day in post 1980's America.

 

[ThinkCritically]

I agree - but I would go further and say that union members incentive should also align with what is good for the company. Union contracts absolutely never take into consideration what the company is facing ala - competition, foreign labor, future capital requirements, rising healthcare costs etc. etc. -- Never.
Show me a union that will agree to a 5 year wage decrease to pay for retooling a plant - HA! Will never happen.
So what do companies do to stay alive in a uber-competitive market where consumers only care about price? They outsource...close factories and Mexican and Chinese peasants do what these folks once did.
Just another day in post 1980's America.

The labor union wants to have their cake and eat it too.

 

[Middleoftheroad]

This is due to increased sugar costs due to increased production costs due to increased energy/oil prices.
Also America is eating a bit healthier. Their delivery costs also went up due to increased fuel costs..

Little Debbies is doing great. Of course, they are not held hostage by Union thugs, and are much more nimble and able to compete.

Sound familiar?

Little Debbies snacks are great. Hostess? Yea not so much. Twinkies are so 1980s.