Hostess, maker of the Twinkie, pushed into liquidation by Private Equity firm and Unions

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    Nov 17, 2012 4:34 AM GMT
    I wouldn't know...in Alabama they are so scared of people actually standing up for fair treatment that the word union is treated the same way as progressive. Doesn't exist.

    Anyways...it's clear to pretty much anyone who isn't detestable that the big wigs of Hostess saw the end coming and sucked the blood until the work-force body was dead.

    If this is really what you support Riddler, you take low to a whole new level.


    riddler78 said
    ConfederateGhost saidJust claim you aren't gunna do it after you already have.

    Lie, cheat, steal, and keep 'em poor...that's the Republican way, right Riddler?


    Well, atleast Hostess EVPs and SVPs won't be able to ride off into the millionaire sunset on the backs of their hard workers anymore. Serves 'em right. And let every other greedily ran company face the same fate.

    I'll say it, bring on the fall. 'Cus I'd rather we all be in chaos then those filthy fucking pigs who try and screw people over every chance they get continue to successfully use, abuse, and take advantage of the working class.

    Here's a big fuck you to every single one of you who think it's acceptable what big box companies do to their workers. Or should I say neo-indentured servants.



    If that's the Republican way, does that make the leadership at these unions Republicans? icon_eek.gif
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    Nov 17, 2012 4:36 AM GMT
    yourname2000 said
    riddler78 said
    yourname2000 said
    DontQuoteMe said
    yourname2000 saidBut our little Hong Kong OP, Clem, has no comment on the clarification that the unions had already taken it up the ass, and were only being asked to spread further while it was the executives who were lining their pockets.

    Just the kind of one-sided dreck we've all come to expect from this piece of shit poster on RJ.


    Racist turd. This was actually a civil conversation going on until you posted this.

    Exactly what is racist about my post, lol? And really, coming from you, Southbeach? ---claims of racism are laughable. icon_lol.gif

    I think it's great that you come to the defense of this piece of shit....your reputation on here says more about the kind of person Riddler is more than my words ever could....so keep talking, asswipe. icon_wink.gif


    Huh - so it occurs to me - you've been drinking again haven't you Dave? Again all that anger seething through... your poor heart.

    Seriously? drinking? That's the best you can do? LOL!

    Weak, Clem, Weak. icon_razz.gif

    Why don't you step away from the computer for a moment and go spit on some of the serfs in your little sweat shop....that's sure to put a smile on your face.


    Sorry, for as much as you'd like me to be, I'm not as bitter or as weak as you'd like to think. Your drinking is the only thing that I can imagine that would drive your blind rage. I suppose it could be just who you are as well if you prefer. icon_wink.gif

    How does Thom put up with you? icon_wink.gif
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    Nov 17, 2012 4:40 AM GMT
    ConfederateGhost saidI wouldn't know...in Alabama they are so scared of people actually standing up for fair treatment that the word union is treated the same way as progressive. Doesn't exist.

    Anyways...it's clear to pretty much anyone who isn't detestable that the big wigs of Hostess saw the end coming and sucked the blood until the work-force body was dead.

    If this is really what you support Riddler, you take low to a whole new level.


    The thing is that's not what they did - in fact, the top 4 gave back their pay increases, and were being paid a dollar to the end of the year as of April. I mean, clear to anyone?

    The environment has changed - I don't doubt that food preferences have changed, but what do you do when you have a workforce that is paid more than the value they deliver? I think it was a perfectly rational response on both sides. Unfortunate, but rational. The thing is, what will likely happen is that a company with a bakery will deliver this bread for far cheaper than they were. Whether this is because of better processes, innovation or just plain paying their workers cheaper, having such an adversarial approach between workers and management no longer works as Hostess also proves.
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    Nov 17, 2012 4:50 AM GMT
    You say they gave it back but how do we know? How do you know for sure? Why did they do it in the first place? And please don't feed me your line of bullshit about "this is typical" because it's not. It's quite the guilty move to be quite fucking honest. Give yourself supreme pay increases while you ask your work-force to sacrifice? Then after you've received your fat-ass checks and shipped them to offshore bank accounts where they can't be traced or exposed and then claim you're giving back every penny while you sink the company into bankruptcy knowing all the while you're gunna be sitting pretty in the end and wait a second....did your workers union just activate? Boy oh boy! Sometimes the perfect scapegoat just presents itself doesn't it?

    Oh me oh my millions.

    I may be southern but I'm no fool. You can paint a pretty picture to anyone ignorant enough to listen to you Riddler, but I am not one of those people.


    riddler78 said
    ConfederateGhost saidI wouldn't know...in Alabama they are so scared of people actually standing up for fair treatment that the word union is treated the same way as progressive. Doesn't exist.

    Anyways...it's clear to pretty much anyone who isn't detestable that the big wigs of Hostess saw the end coming and sucked the blood until the work-force body was dead.

    If this is really what you support Riddler, you take low to a whole new level.


    The thing is that's not what they did - in fact, the top 4 gave back their pay increases, and were being paid a dollar to the end of the year as of April. I mean, clear to anyone?

    The environment has changed - I don't doubt that food preferences have changed, but what do you do when you have a workforce that is paid more than the value they deliver? I think it was a perfectly rational response on both sides. Unfortunate, but rational. The thing is, what will likely happen is that a company with a bakery will deliver this bread for far cheaper than they were. Whether this is because of better processes, innovation or just plain paying their workers cheaper, having such an adversarial approach between workers and management no longer works as Hostess also proves.
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    Nov 17, 2012 5:05 AM GMT
    ConfederateGhost saidYou say they gave it back but how do we know? How do you know for sure? Why did they do it in the first place? And please don't feed me your line of bullshit about "this is typical" because it's not. It's quite the guilty move to be quite fucking honest. Give yourself supreme pay increases while you ask your work-force to sacrifice? Then after you've received your fat-ass checks and shipped them to offshore bank accounts where they can't be traced or exposed and then claim you're giving back every penny while you sink the company into bankruptcy knowing all the while you're gunna be sitting pretty in the end and wait a second....did your workers union just activate? Boy oh boy! Sometimes the perfect scapegoat just presents itself doesn't it?

    Oh me oh my millions.

    I may be southern but I'm no fool. You can paint a pretty picture to anyone ignorant enough to listen to you Riddler, but I am not one of those people.


    I'm pretty sure this will eventually be in the public record. But here's the rest of that article that I posted the initial clip to -

    http://online.wsj.com/article/SB10001424052702303772904577333602976713584.html?user=welcome&mg=id-wsj

    The chief executive of Hostess Brands Inc. said he is slashing executive compensation in the aftermath of creditor allegations that the company may have pushed management's salaries higher in the months leading up to its Chapter 11 bankruptcy filing in an effort to skirt bankruptcy rules.

    Gregory F. Rayburn, a restructuring expert who took the helm at Hostess last month, said in an interview that the top four executives working under him had agreed to cut their annual salaries to $1 until the company emerges from bankruptcy or Dec. 31, whichever comes first. The executives—Gary Wandschneider, John Stewart, David Loeser and Richard Seban—had seen their salaries increase by 75% to 80% last July, at a time when the baking company had already hired restructuring lawyers, according to creditors.

    Further down the totem pole at the Twinkie maker, four additional executives agreed to return to the salaries they were receiving before the July increase.

    "I just think that it's the right thing to do," Mr. Rayburn said Sunday, noting that word of the salary bumps, disclosed in redacted papers filed by the creditors committee Tuesday, had caused "a high level of internal strife in the organization and certainly external strife."

    The official committee of unsecured creditors in Hostess's bankruptcy case alleged the company may have "manipulated" its executives' salaries, converting a chunk of their pay from performance-based bonuses to guaranteed salary. The creditors said the move may have been taken "at least in part to sidestep" provisions designed to ensure that companies in bankruptcy aren't enticing their employees to stay on board with the promise of cash.

    "I don't think that that was the intent," Mr. Rayburn said of the creditors' theory Sunday. "I think that they wanted to stabilize the management team."

    He added that all of the executives were supportive of the decision to roll back the salaries and that the management team had the "full support" of the company's board and its lenders.

    Mr. Rayburn said Sunday that no bonus plan is in the works for the executives who agreed to take the pay cuts.

    Word of the creditors' allegations last week outraged the Teamsters union, which counts 7,500 of Hostess's 19,000-strong work force as members. The union accused Hostess's management of having "lined their own pockets while at the same time demanding drastic wage and benefit cuts by workers."

    Mr. Rayburn said he hopes to resume active negotiations with the union as both sides prepare for an April 17 trial over Hostess's request to shed its collective-bargaining agreements in bankruptcy.

    "I'd love to get back to the bargaining table with the Teamsters on the pension issue," he said, citing the issue that has proved most divisive in the case.


    Again, having been on the outside of a few bankruptcies (I was looking at buying one, a friend's dad bought one which ultimately went back into bankruptcy, that same friend's dad ultimately went to work for a different company in senior management that came out of bankruptcy, and professionally I worked for a large accounting firm). It's not unusual to add cash or incentives to encourage people to stay. The people with the most marketable skills, like it or not are the white collar staff. So you have to pick and choose your battles. I mean put yourself in the shoes of an owner... what would you do for management that you needed if they were thinking to leave because the company was failing?

    Funds weren't shipped off to some foreign account - I'd bet on that - given that they did have sophisticated lenders which would have had covenants up the wazoo. As others have pointed out, this wasn't even the first time they've gone bankrupt.

    Ultimately I think offering to be paid a dollar was the brave move on the part of the CEO here - and bear in mind, this was in April. It's disingenous for the union to claim that that there are pervasive lies out there while lying so obviously. That said, I get the pressure they're under right now given how everyone is blaming them in the press.
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    Nov 17, 2012 5:33 AM GMT
    Riddler, I think you should pay attention to ConfederateGhost. I believe he voted for the Libertarian candidate in his State.
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    Nov 17, 2012 5:36 AM GMT
    meninlove saidRiddler, I think you should pay attention to ConfederateGhost. I believe he voted for the Libertarian candidate in his State.


    I pay attention to anyone who seems to have a reasonable argument - which is why I asked him the things I did. I think he has reasonable concerns, but I also think that management did as well given that the company wasn't viable. Sometimes companies can't be saved - and that's a good thing and why better companies almost always rise out of the ashes when they do things differently.

    (It's also for this reason that the US still remains the biggest manufacturer in the world).
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    Nov 17, 2012 5:41 AM GMT


    Oh god....
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    Nov 17, 2012 5:52 AM GMT
    Aristoshark said
    Christian73 said
    You're not a free market libertarian. You're a corporate fascist.

    And a smuggler, from what I hear.


    That sounds right.
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    Nov 17, 2012 11:27 AM GMT
    Sounds like the creditors forced the execs to do the "right" thing AFTER they saw the attempt to raise the salaries. The intent was clearly there, no matter how they spin it.
    What were the circumstances of Jobs' $1 salary, by comparison? Was Apple about to file bankruptcy?
  • thadjock

    Posts: 2183

    Nov 17, 2012 11:53 AM GMT
    current corporate philosophy is IMMORAL and nothing more than modern day slavery.

    CEO pay has risen 127 times faster than worker pay in the last 30 years.

    CEO compensation is now 380 times the pay of the average worker.

    Yet management always blames and expects workers to absorb the cuts

    MITT ROMNEY lost the election because he's the poster child for these ASSHOLES.

    it's time for the 99% to revolt

    the hostess employees should be celebrated. they made the tough choice, and were willing to take a stand.
  • maxferguson

    Posts: 322

    Nov 18, 2012 10:43 AM GMT
    thadjock said current corporate philosophy is IMMORAL and nothing more than modern day slavery.

    CEO pay has risen 127 times faster than worker pay in the last 30 years.

    CEO compensation is now 380 times the pay of the average worker.

    Yet management always blames and expects workers to absorb the cuts

    MITT ROMNEY lost the election because he's the poster child for these ASSHOLES.

    it's time for the 99% to revolt

    the hostess employees should be celebrated. they made the tough choice, and were willing to take a stand.


    I agree with the sentiment that CEO pay is out of control - from the perspective of the shareholder. Ironically, the rise of the entire study and practice of management pay consulting and theory is very correlated with the rise of CEO pay. Sometimes it takes an activist shareholder to speak up and call them out. The solution: eliminate unions, reserve shares for would-be unionized workers. Let them be unionized in their pursuit of wealth (for whatever reason they want it), in their freedom to balk when THEY want, and their freedom to call out management if need be. Holding shares is the ultimate way to be heard - being unionized is the easiest way to be last in line - and striking power means nothing when the firm liquidates. At that point, the picket pay ends and you're not on strike, you're simply unemployed and suddenly facing uncertain government spending, a grotesque labour market, an uncertain macro economy, and mountain household debt and bills that eat into what savings you have (the one's Bernanke's been punishing with .01% interest).
  • maxferguson

    Posts: 322

    Nov 18, 2012 10:56 AM GMT
    ConfederateGhost saidJust claim you aren't gunna do it after you already have.

    Lie, cheat, steal, and keep 'em poor...that's the Republican way, right Riddler?


    Well, atleast Hostess EVPs and SVPs won't be able to ride off into the millionaire sunset on the backs of their hard workers anymore. Serves 'em right. And let every other greedily ran company face the same fate.

    I'll say it, bring on the fall. 'Cus I'd rather we all be in chaos then those filthy fucking pigs who try and screw people over every chance they get continue to successfully use, abuse, and take advantage of the working class.

    Here's a big fuck you to every single one of you who think it's acceptable what big box companies do to their workers. Or should I say neo-indentured servants.



    You know who is riding off the backs of those hard working bakers too? Union Bosses. They perpetuate taking advantage of the working class - the duration of unemployment is over 40 weeks now. So a baker earning $30K (after tax) is going to have to find a job that earns $600 more per week (extra $125/day) (50 week work year) and work for about 1 year just to catch up. They were earning roughly $125/day to begin with..... And the unemployed labor pool is so large that striking to the point of liquidation just opens the door for even cheaper labor to walk in once the assets are reorganized...
  • maxferguson

    Posts: 322

    Nov 18, 2012 11:14 AM GMT
    ConfederateGhost saidJust claim you aren't gunna do it after you already have.

    Lie, cheat, steal, and keep 'em poor...that's the Republican way, right Riddler?


    Well, atleast Hostess EVPs and SVPs won't be able to ride off into the millionaire sunset on the backs of their hard workers anymore. Serves 'em right. And let every other greedily ran company face the same fate.

    I'll say it, bring on the fall. 'Cus I'd rather we all be in chaos then those filthy fucking pigs who try and screw people over every chance they get continue to successfully use, abuse, and take advantage of the working class.

    Here's a big fuck you to every single one of you who think it's acceptable what big box companies do to their workers. Or should I say neo-indentured servants.



    You and your idea of "neo-indentured" servants would be ripped to shreds instantly in the middle of a riot on a factory floor at FoxConn. They bring in the absolute worst of people who were earning dirt, pay them (dirt +1.5), offer them modest accommodations with amenities like tennis courts and basketball courts, which cost FoxConn only setup costs and mild maintenance. Other employee benefits include stores on "campus" pitched for their convenience. Well guess what, basketball courts don't help you build wealth and invest in yourself, and when you live on factory grounds, you spend you +1.5 at the "convenient" grocery/book/corner store and you're left with: Dirt + moderately better 'living' conditions, no personal achievement, no savings, repetitive work conditions, and overcrowding. Sum that all up and you've got no way out and no place better to go. I suppose those hostess workers are gong to be way better off spending the 40 week mean duration of unemployement looking for a better paying job. At $30,000 and the current mean duration of unemployment, the job that all 18,000 workers would have to find in order for the aggregate welfare to have increased would have to pay over twice as much. Yep, you'd much rather see that. It seems to me the Labor Union bosses did far less work than any of the bakers, got paid more, and still have jobs after the bakers don't. Even the CEO doesn't have one anymore, but the union thugs don't have any skin in the game for the people they represent.
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    Nov 18, 2012 4:20 PM GMT


    ...meanwhile offshoring jobs over the last 2 years has resulted in about 3 million US job losses. And let's not hear tripe of it being Unions to blame; many of those jobs were not unionized, and went to places where the pay is about 9 percent of what workers made here.

    ...but then that's unskilled labour, and those people don't count, even though they make up a vast vast number of workers.

    Hostess could have offshored all its bakeries, resulting in........18,000 job losses.


    But the company would have survived, which is all that matters.

    Them unskilled workers iz too dumb to be real people, like smart
    'skilled' people are.
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    Nov 18, 2012 4:28 PM GMT
    meninlove said

    ...meanwhile offshoring jobs over the last 2 years has resulted in about 3 million US job losses. And let's not hear tripe of it being Unions to blame; many of those jobs were not unionized, and went to places where the pay is about 9 percent of what workers made here.

    ...but then that's unskilled labour, and those people don't count, even though they make up a vast vast number of workers.

    Hostess could have offshored all its bakeries, resulting in........18,000 job losses.


    But the company would have survived, which is all that matters.

    Them unskilled workers iz too dumb to be real people, like smart
    'skilled' people are.


    Let me see if I understand your "logic" (if you can call it that.)

    Losing 18,000 jobs and an entire company that pulls money into the United States is better than losing 18,000 jobs.

    Right...
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    Nov 18, 2012 4:33 PM GMT

    Uh....did I say one was better than the other?

    It's easy to blame the worker, who has already taken cuts and more cuts.

    The offshoring is moving up the ladder and has also taken massive bites out of the white collar sectors. You know, unimportant jobs like customer service, lol.

    But hey Chainers, I don't take you seriously as your forte is contrarian trolling. icon_wink.gif

    Here's some fun reading for you.
    http://endoftheamericandream.com/archives/how-globalism-has-destroyed-our-jobs-businesses-and-national-wealth-in-10-easy-steps
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    Nov 18, 2012 4:41 PM GMT
    meninlove said
    Uh....did I say one was better than the other?

    It's easy to blame the worker, who has already taken cuts and more cuts.

    The offshoring is moving up the ladder and has also taken massive bites out of the white collar sectors. You know, unimportant jobs like customer service, lol.

    But hey Chainers, I don't take you seriously as your forte is contrarian trolling. icon_wink.gif

    Here's some fun reading for you.
    http://endoftheamericandream.com/archives/how-globalism-has-destroyed-our-jobs-businesses-and-national-wealth-in-10-easy-steps


    No you didnt, because anyone with half a brain knows that the first one is obviously better than the second one.

    As for reading, considering the only thing you have offered to this conversation is sound bites of american politics from Canada, Ill pass. My brain is only satisfied with intellectual conversation. My bad for assuming that the dipshits in the politics thread can actually have a real conversation, around actual facts, and not just listening to liberal/conservative biased media and taking their word for it.

    BTW as someone who actually knows business, I know the effects of globalism. Thanks for trying though.

    Now, let me ask you this. For the hostess workers, are they better off now after the strike than they were before?
  • thadjock

    Posts: 2183

    Nov 18, 2012 6:31 PM GMT
    maxferguson said
    I agree with the sentiment that CEO pay is out of control - from the perspective of the shareholder. Ironically, the rise of the entire study and practice of management pay consulting and theory is very correlated with the rise of CEO pay. Sometimes it takes an activist shareholder to speak up and call them out. The solution: eliminate unions, reserve shares for would-be unionized workers. Let them be unionized in their pursuit of wealth (for whatever reason they want it), in their freedom to balk when THEY want, and their freedom to call out management if need be. Holding shares is the ultimate way to be heard - being unionized is the easiest way to be last in line - and striking power means nothing when the firm liquidates. At that point, the picket pay ends and you're not on strike, you're simply unemployed and suddenly facing uncertain government spending, a grotesque labour market, an uncertain macro economy, and mountain household debt and bills that eat into what savings you have (the one's Bernanke's been punishing with .01% interest).


    that's all a nice fantasy but it will never happen, the last thing the ruling class wants is for the proletariat to have voting stock in the company they work for.

    The demise of american business (and the gutting of the american worker)can be traced to the moment business schools made the craven paradigm shift in philosophy from building a sustainable business to instead maximizing corporate profits being the one and only goal of every CEO currently.

    Once companies began catering to shareholder's whims and caprices, they began the endless cycle of chasing quarterly balance sheet figures that would dazzle even suburban e-traders. All hail the arrival of "creative" accounting practices to whitewash the figures, so the shareholders won't dump the stock when earnings dissapoint by .032% vs projected.

    this is your economy on crack, welcome to the new normal
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    Nov 18, 2012 7:07 PM GMT
    lol see theadjock's post above, Chainers.

    ...and thanks loads for the nasty insult, which is the usual Chainers du jour. icon_wink.gif
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    Nov 18, 2012 9:13 PM GMT
    Building onto thadjock's comments above, I will add that most business graduates go to work with businesses they do not care about.

    They arrive on day one ready to extract value, mostly for themselves. This is what they learn at business school. Only very strong companies can survive them.

    Good business leaders have a fascination for every aspect of their particular business, from the parts or ingredients to their craftsmen. Most of all a great business leader will want to know and anticipate the needs of the customer.

    I doubt Twinkies Inc. had any of that positive leadership guiding it.

    But whomever is responsible for destroying Twinkies Inc needs to get rewarded. We are all better off without their crap.

  • thadjock

    Posts: 2183

    Nov 18, 2012 10:23 PM GMT
    GeorgeLifts said
    I doubt Twinkies Inc. had any of that positive leadership guiding it.

    But whomever is responsible for destroying Twinkies Inc needs to get rewarded. We are all better off without their crap.



    I'll go one step further:

    The Hostess company's problem isnt their product (twinkies/wonder bread) it's the hapless over paid management that can't figure out how to run a company with an iconic product familiar to and loved by hundreds of millions of people.

    Coke produces an entire line of products that are entirely nutritionally worthless and actively damages the health of billions around the world yet they're a regular on the fortune 500 and profits have been known to double annually. Mcdonalds: same story.

    oh and on a side note, to all the gay guys on here who feel it necessary to villainise the humble twinkie with a glare of haughty indignation

    drop the charade

    stop pretending that the only thing to enter your body are organic baby vegetables grown on the dew kissed hills outside of marseilles. most of you smoke crap, eat crap, and/or drink crap far worse on a daily basis than a little flour, sugar, fat and preservatives found in a twinkie. oh and btw, your $200 pinot has sulfites in it, but by all means keep pouring that down your hipster gullet.
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    Nov 19, 2012 5:51 AM GMT
    riddler78 saidIronically, the private equity firm is run by a prominent Democrat with a shareholder in Hostess that includes Dick Gephardt.

    http://www.zerohedge.com/news/2012-11-16/hostess-liquidation-curious-cast-characters-twinkie-tumbles

    Hostess has gone the way of other companies, but ultimately not for the reasons you cite. Like when horse and buggy manufacturers went out of business, like when consumer photo film manufacturers and processors went out of business, like when VHS cassette manufacturers went out of business, like when record stores went out of business, like newspapers and magazines declining, like Nokia and RIM (Blackberry) declining, etc. When technology or tastes change, and companies fail to diversify their product lines, the company dies. They could pay their employees $0 and give zero benefits, but that won't stop the inevitable.
  • maxferguson

    Posts: 322

    Nov 19, 2012 10:24 AM GMT
    thadjock said
    maxferguson said
    I agree with the sentiment that CEO pay is out of control - from the perspective of the shareholder. Ironically, the rise of the entire study and practice of management pay consulting and theory is very correlated with the rise of CEO pay. Sometimes it takes an activist shareholder to speak up and call them out. The solution: eliminate unions, reserve shares for would-be unionized workers. Let them be unionized in their pursuit of wealth (for whatever reason they want it), in their freedom to balk when THEY want, and their freedom to call out management if need be. Holding shares is the ultimate way to be heard - being unionized is the easiest way to be last in line - and striking power means nothing when the firm liquidates. At that point, the picket pay ends and you're not on strike, you're simply unemployed and suddenly facing uncertain government spending, a grotesque labour market, an uncertain macro economy, and mountain household debt and bills that eat into what savings you have (the one's Bernanke's been punishing with .01% interest).


    that's all a nice fantasy but it will never happen, the last thing the ruling class wants is for the proletariat to have voting stock in the company they work for.

    The demise of american business (and the gutting of the american worker)can be traced to the moment business schools made the craven paradigm shift in philosophy from building a sustainable business to instead maximizing corporate profits being the one and only goal of every CEO currently.

    Once companies began catering to shareholder's whims and caprices, they began the endless cycle of chasing quarterly balance sheet figures that would dazzle even suburban e-traders. All hail the arrival of "creative" accounting practices to whitewash the figures, so the shareholders won't dump the stock when earnings dissapoint by .032% vs projected.

    this is your economy on crack, welcome to the new normal


    And I agree with you a second time icon_razz.gif. Do you read PIMCO's viewpoint newsletters? Bill Gross, who manages the world's largest bond fund, articulates what no one else will in a cynical (yet serious) way. Here's a quote from one in September

    "What they’re saying is that when it comes to debt and to the prospects for future debt, the U.S. is no “clean dirty shirt.” The U.S., in fact, is a serial offender, an addict whose habit extends beyond weed or cocaine and who frequently pleasures itself with budgetary crystal meth. Uncle Sam’s habit, say these respected agencies, will be a hard (and dangerous) one to break."
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    Nov 19, 2012 4:01 PM GMT
    sfbayguy said
    riddler78 saidIronically, the private equity firm is run by a prominent Democrat with a shareholder in Hostess that includes Dick Gephardt.

    http://www.zerohedge.com/news/2012-11-16/hostess-liquidation-curious-cast-characters-twinkie-tumbles

    Hostess has gone the way of other companies, but ultimately not for the reasons you cite. Like when horse and buggy manufacturers went out of business, like when consumer photo film manufacturers and processors went out of business, like when VHS cassette manufacturers went out of business, like when record stores went out of business, like newspapers and magazines declining, like Nokia and RIM (Blackberry) declining, etc. When technology or tastes change, and companies fail to diversify their product lines, the company dies. They could pay their employees $0 and give zero benefits, but that won't stop the inevitable.


    The difference is that there's still significant demand for Twinkies. It's a bit of wishful thinking to think that given the portfolio of brands from Hostess that they aren't able to find a viable business. The problem is costs. I assume that they've been impacted by a number of factors - that have dropped revenues but this only means that it makes legacy costs even less sustainable.

    These brands will be bought - and new more competitive firms will operate them - that's how markets work.

    Incidentally, to argue that Twinkies are obsolete is um a bit ridiculous:
    http://www.reuters.com/article/2012/09/18/us-obesity-us-idUSBRE88H0RA20120918