Hostess first entered bankruptcy in 2004 after a failed restructuring attempt. During this first bankruptcy, which lasted 4.5 years, BCTGM local unions & members at Hostess (then IBC) agreed to significant wage & benefit concessions that brought Hostess wage rates below national competitors.
Beginning in 2003, Hostess began closing production plants, thrift stores & consolidating driver sales units, resulting in major loss of employment for the unionized workforce. Before this first Hostess bankruptcy, the BCTGM represented more than 10,000 Hostess workers. That number is now approximately 5,00 due to plant closings.
Reports suggest Hostess saved $110 million because of concessions its unionized workforce took. The money was NOT reinvested in the business.
In 2009, Hostess Brands emerged from bankruptcy as a private company controlled by a private equity firm (Ripplewood Holdings...shades of Bain???) & two hedge funds (Silver Point Capital & Monarch Alternative Capital...Romney economic policy in real-time practice). The new ownership promised to focus on brand building, modernize its plants & trucks, & invest in new technology that other baking companies were employing. Instead, aging trucks & plant machinery were not replaced. New technology was ignored. The company's debt continued to grow & its sales continued to decrease.
In 2011, the company was floundering & again demanded major concessions from unionized members.
Workers refused additional givebacks. Hostess filed for bankruptcy for the second time in January 2012.
In bankruptcy court, Hostess retained one of the top law firms in the nation (Jones Day...guess they can afford that) at ludicrously high hourly rates & attacked its union contracts. Hostes demanded:
- An immediate 8% wage reduction;
- The shift of at least 20% more health care costs onto its employees;
- Elimination of the employees' W-1 (retiree medigap insurance) & P-Plan (a pension supplement used to pay health & funeral costs);
- Closure of additional plants (10 - 12), refusing to tell the union which plants are profitable, which plants will be closed, why, etc.;
- Elimination of the eight-hour work day.
Since 2004, the company has closed 21 plants, costing thousands of workers their jobs. The following plants were closed during the first bankruptcy: Grand Rapids,MI; Milwaukee,WI; San Pedro,CA; Monroe,LA; Buffalo,NY; Miami,FL; Charlotte,NC; New Bedford,MA; San Francisco,CA (2); Davenport,IA; Lakewood,WA; Los Angeles,CA; Pomona,CA; Glendale,CA; San Diego,CA; Decatur,IL; Jamaica,NY; Akron,OH; Columbus,OH; & Rock Island,IL.
Hostess is not & will not be viable: If Hostess had emerged from bankruptcy under the latest plan, it would still have had too much debt, too high costs, & not enough access to cash to stay in business for the long term. It would not have been able to invest in its plants, in new products, & or in new technology. Yet they are blaming their closure on the striking union...
but since 2002, Hostess has had six different CEOs. None of them have been successful in turning the company around. Instead of planning to share in the sacrifices the workers were forced to endure, the BCTGM learned that the Hostess CEO was awarded a 300% raise & at least nine other top executives were awarded raises ranging between 35% & 80%.
The Fifth Estate - Ding Dong, the Witch is Back 1964-1967, Boston Skyline BSD 116, 1993.
decryption code in comments
Enjoy,
NØ
