Union Workers Ax Twinkies and Ho Hos|
Twinkies and Ho Ho’s are history for Hostess Brands Inc. as of Friday November
16 as the baker filed a motion with U.S. Bankruptcy Court to close its business
and sell its assets after a strike by what is referred to as, small stubborn union
workers. "We deeply regret the necessity of today's decision, but we do
not have the financial resources to weather an extended nationwide
strike," Chief Executive Gregory Rayburn said in a statement.
"Hostess Brands will move promptly to lay off most of its 18,500-member
workforce and focus on selling its assets to the highest bidders." Hostess
announced that one of its largest unions, the Bakery, Confectionery, Tobacco
Workers and Grain Millers International Union, initiated a nationwide strike
that "crippled the company's ability to produce and deliver products at
multiple facilities." Hostess announced the company will continue to ship
some of its well-known products such as Twinkies, Ho Ho’s, Wonder Bread, Ding
Dongs and Snow Balls until inventory runs out. Hostess announced earlier in the
week that the ax would fall on Friday if the strikers did not get back to work,
the union didn’t blink, failing to come to terms with the bakery, scrapping
jobs for nearly 18,500 workers and in this economy, that’s gonna hurt. The
national strike by members of the Bakery, Confectionary, Tobacco Workers and
Grain Millers International Union (BCTGM) that began last week decimated the
82-year-old company’s ability to produce and deliver products at roughly 12 of
its 33 plants. BCTGM President Frank Hurt said Thursday that the crisis was the
"result of nearly a decade of financial and operational
mismanagement" and charged management was scapegoating workers to allow
the Wall Street investors who own Hostess to sell. Marty Zimmerman,
secretary-treasurer for BCTGM Local 85 said early Friday that workers had been
at “wits end” with Hostess brass. “Well, the mindset is we’re standing strong,
absolutely,” Zimmerman told the station. “I mean, they’ve taken our pensions
away, we’ve had seven CEOs in the last 10 years; this company has been so
mismanaged. Really, we’re at our wits end and enough is enough” "Many people
have worked incredibly long and hard to keep this from happening, but now
Hostess Brands has no other alternative than to begin the process of winding
down and preparing for the sale of our iconic brands," Rayburn’s letter
read. “As you know, for many months the Company has been working with our
unions, lenders and other stakeholders to reach a consensual resolution to
legacy costs and labor contracts. Despite everyone’s considerable efforts to
move Hostess out of its restructuring, when we began implementing the Company’s
last, best and final offer, the Bakers Union chose to stage a crippling
strike.” The Irving, Texas-based company had already reached an agreement on
pay and benefit cuts with its largest union, the International Brotherhood of
Teamsters. On Thursday, Teamsters officials blasted the smaller union for not
seeking a “solution” in the process or to engage in negotiations. “The BCTGM
chose a different path, as is their prerogative, to not substantively look for
a solution or engage in the process,” the statement read. “BCTGM members were
told there were better solutions than the final offer, although Judge Drain
stated in his decision in bankruptcy court that no such solutions exist.
Without complete information, BCTGM members voted by voice votes in union
halls. The BCTGM reported that over 90 percent rejected the final offer and
three of its units ratified the final offer.” The filing read, “These losses
and other factors, including increased vendor payment terms contraction, have
resulted in a significant weakening of the debtors’ cash position and, if
continued, would soon result in the debtors completely running out of cash.” Hostess
is now forced to close 565 distribution centers, 570 bakery outlet stores and
roughly 5,550 delivery routes. Subject to U.S. Bankruptcy Court approval, lenders
have agreed to allow Hostess to continue to access $75 million in financing put
in place at the start of the bankruptcy cases to fund the sale and wind-down process.
BCTGM workers began striking at some Hostess production facilities without
notifying Teamsters officials on November 9, per reports from the Teamsters. “This
unannounced action put Teamster members in the difficult position of facing
picket lines without knowing their right to honor such a line without being
disciplined,” the statement continued.
born in 1930 in a Continental Bakery facility in Schiller Park, Illinois, was originally
filled with banana cream until banana rationing during World War II forced the
manufacturer to substitute vanilla cream, which then proved to be more popular.
first made by Taggart Baking Co. in Indianapolis, Indiana became a Continental
Baking product in 1925 when in 1995; the company was purchased by Interstate
Bakeries Corp., which later became Hostess Brands.
Cupcakes, introduced in 1919 was supposedly America’s first commercially
produced cupcake. Taggart Bakery was the first producer of the Hostess Cupcake with
the first two pack Hostess Cupcakes sold for 5 cents.
Hostess Ho Ho was born from a San Francisco bakery in 1920.
Dongs was born in 1967, originally known as Drake’s Cakes until the company briefly
merged with parent company of Hostess, Continental in 1987. Ding Dongs were originally
called Big Wheels in the East Coast markets where Ring Dings were also sold. In
1998, Interstate Bakeries bought Drake’s outright, ending the Ding Dong-Ring
Balls with creme filling were first sold in 1947 and added by the famous baker in
news of the end of Twinkies and Ho Ho’s on Friday, consumers made a run on the
snack cakes, clearing shelves at any location where the snack cakes were sold. Not
surprising, reportedly someone had a box of Twinkies for sale on eBay with a
starting price $200,000.
reports on Friday, J.P. Morgan (JPM) is facing further
scrutiny from federal regulators, now over anti-money laundering practices. The
Office of the Comptroller of the Currency is planning to require the bank to
strengthen its anti-laundering systems and audit past transactions as part of a
larger compliance crackdown on the banking sector.
The U.S. Treasury
Department data reported foreign investors were net sellers of $18.3 billion of
Treasurys in September for the largest amount on record. During September, foreign
investors bought a net $17.9 billion of long-term U.S. securities including
U.S. Treasurys, mortgage-related bonds, corporate bonds and equities in
September, down sharply from the $78.5 billion purchased during August. Per
data reported, China-based investors slightly increased their holdings of U.S.
Treasurys during September. Foreigners made net purchases of $23.4 billion of
U.S. equities during September, up from $6.1 billion in August.
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Nov 16, 2012