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Subscribe to RSSHostess may have a longer shelf life than originally predicted now that the company and unions are in mediation. If the mediation fails, the company will go back to bankruptcy court. NBC's Kevin Tibbles reports.
Twinkie the Kid’s ride into the sunset hit a hurdle Monday when Hostess Brands, unions and lenders agreed to mediation to try to save the company, and its spongy, yellow cake, from liquidation.
The decision staves off, for a couple of days at least, Hostess’ plans to shut down its 33 factories and lay off 18,500 workers after an acrimonious labor dispute that could lead to the end of the 82-year-old company and its well-known brands such as Twinkies, Ho-Hos, Sno-Balls and Wonder bread.
During the hearing, U.S. Bankruptcy Judge Robert Drain urged the parties to come to an agreement through mediation rather than through a public, and costly, hearing. The court called a short recess while the lawyer for the baker's union phoned his client to see if the union would agree to a mediation process tomorrow.
Hostess, maker of the iconic Twinkie cake, will have a hearing before a bankruptcy judge on Monday to begin the work of shutting down and selling off its assets. Meanwhile, many loyal customers are rushing to snatch up what may be the last of its products. NBC's Mara Schiavocampo reports.
After the recess, the sides agreed to a mediation session Tuesday at 1 p.m. ET to try to work things out. If they can't resolve it, and come to an understanding of the underlying motives behind the worker strike that the company said crippled its business, the bankruptcy hearing will resume Wednesday at 11 a.m ET.
The sides will probably come to an agreement on Tuesday, John Pottow, a bankruptcy law professor at the University of Michigan, told TODAY. The biggest sign, he said, is that the Teamsters were on board.
"The Teamsters aren't pussycats," said Pottow. "If they're saying 'this is as good as it gets,' that's a pretty strong signal to me."
Wait a moment, so they were playing poker with our childhood memories all along?
"The bakery union probably thought management was bluffing," Pottow said. After Hostess filed for permission to liquidate Friday, it became clear they weren't.
Court filings show that the company is asking for permission to pay $1.75 million in retention bonuses to 19 different managers as an incentive for sticking around during the liquidation process. Hostess Brands CEO Gregory Rayburn has publicly blamed the unions for the company's demise.
The U.S. trustee, Hope Davis, an official appointed by the Justice Department to protect the interest of creditors, objected to this idea, filing a motion this morning which argued that Hostess officials "have failed to demonstrate that the proposed bonuses are true incentive bonuses and not disguised retention payments."
Davis also moved to convert the bankruptcy from a chapter 11 to a chapter 7. That would take control of the winddown proceedings away from Hostess and into the hands of a court-appointed trustee.
Cnbc's Kayla Tausche reports that Hostess and the baker's union have agreed to mediation, putting a temporary hold on a shutdown of the company.
In their joinder filed today, the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union said that "blaming the BCTGM for the Company’s liquidation is no more credible than blaming an isolated gust of wind for blowing over a tree, when it was the tree’s shallow, rotted root structure that was actually responsible."
But kids, both young and old, don't care about the blame game. They want to know whether they'll still be able to find their favorite creme-filled yellow cake treat on the shelves.
The decades-old brand is legendary in consumers' minds and evokes strong feelings of nostalgia in every bite. Some still remember the brand's signature character "Twinkie The Kid" lassoing it up on early television commercials and proclaiming "Big Delight in Every Bite!" The foodstuff has even entered the legal canon. "The Twinkie Defense" was famously, and successfully, used to argue that a suspect on trial for murder suffered from depression and that his high-sugar diet was a symptom of this mental state.
In advance of the interim hearing, Hostess Brands spokesman Tom Becker told TODAY he "wasn't going to comment on what could happen" or speculate on the proceeding's outcome.
While today's results are likely to be minimal, in the coming months several different scenarios could play out, depending on who the buyer is, or if there is a buyer at all.
"There's a lot of Goodwill that comes with the brand name," said Pottow, "A lot of companies could buy the name and recipe for Twinkies and make them." They wouldn't have to make them at the Twinkies factories either. They could make them in new facilities not burdened under old worker agreements that, for instance, required employing separate drivers for two different kinds of Hostess products rather than trucking them together.
Twinkies get absorbed by a big American conglomerate
Some of the likely suitors include ConAgra, Tastycakes maker Flowers Food, or McKeeFoods, makers of Little Debbie. These companies would likely seek to attach the Twinkies to a more efficient delivery system. For instance, does it really make sense to deliver Twinkies in their own special Twinkies trucks?
"Twinkie The Kid" trades his cowboy hat for a sombrero...
A Mexican firm, like Grupo Bimbo, which Forbes reports put in a bid for Hostess several years ago, could move production south of the border. A South American company could get access to lower sugar prices and a cheaper non-unionized workforce. Or, they could keep product in the US, but made in a non-unionized factory.
...or develops a Canadian accent.
A Canadian company called Saputo has the Canadian rights to Hostess brand products. They're not affected at all by the Hostess liquidation and they could conceivably arrange it to sell Twinkies in America.
Twinkies dies
Pure speculation: No one buys the Twinkies recipe. Fans are forced to make their own at home. Prices for unopened boxes of Twinkies skyrocket on eBay. An "Occupy Twinkies" movement launches to build an unauthorized Twinkies knockoff factory with no leaders and online-only sales... and is surprisingly profitable.
Now that Hostess' Twinkies may be going away after the company shut down production after a workers' strike, NBC's Mara Schiavocampo — a Twinkie fanatic herself — takes a look at the mad rush to get a last taste of the iconic cream-filled American snack cake.
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King Obama might step in like he did for the GM Union Thugs.
Lets see this company is might be backed by Muslims? If so, then Obama must stop this from happening.
I think this is owsome. The Union flexed its mussle and hostess managment kissed them in the balls.
I liked twinkies, but I hate the unions and King Obama, then I get a twofere?
If the mexicans get the company, which they might if King Obama steps in, I for one will not buy from the brownies.
Good luck Hostess. Do Not Down Down.
Just curious,were your school teacher's union or non union ? I'm trying to figure out what teachers are worse union or non union.
And THIS is an example of how the Unions have benefited Hostess...
"They could make them in new facilities not burdened under old worker agreements that, for instance, required employing separate drivers for two different kinds of Hostess products rather than trucking them together."
This is INSANE!!
I have to remind people that the economy that we speak of took a hit not because of Obama but because of a series of poor policies and tax breaks for the past twenty years. May I also remind jscusmc69 that the previous number 42 president gave the rich a decrease on taxes and a bigger shelter than they had since the 1980s. May I also remind jscusmc69 that many companies left America due to the high cost of production and the "people's" expectation of cheap. Shopping at Walmart and other conglomerates like we all do are joint culprits in the demise of the economy..as cheap labour guarantee our low prices. Don't blame a newbie for an OLD problem!
Unions have have brought our country down. The people who belong are not allowed to think for themselves. They even vote for who ever they are told to vote for. I hope the Bakers Union is happy. They brought down an 86 year old company. They also got Obama re-elected. What they get, they deserve. You wanted change and you got it.
In early February, Hostess had asked the bankruptcy judge to approve a sweet new employment deal for Driscoll. Its terms guaranteed him a base annual salary of $1.5 million, plus cash incentives and “long-term incentive” compensation of up to $2 million. If Hostess liquidated or Driscoll were fired without cause, he’d still get severance pay of $1.95 million as long as he honored a noncompete agreement. Now how many of those $45,000. a year jobs can you get for that kind of money. At $3.5 million , that would be equal to 77.777 employees ....WOW what a deal for this CEO THUG!!!!!
Not saying that the current management team is good or bad, but I would bet money any of them could probably push the green "On" button or red "Off" button every day. They might even be able to drive the forklift or delivery truck. How many of the 18,500 are qualified to be management? Simple common sense should tell you if your job can be done by anyone that can breathe it will not command a high paying salary. The fact that you or the people on strike dont already know this should answer the above question for you.
These unions should stop whining for more pay, when instead they should be happy that they have a job and not working in the third would county that the laborer is extremely harsh, in some cases unsafe and pays next to nothing.
If you want more money whose stopping you from getting a second job or going back to school to better your education so you can earn more money? No one, and cost is not the issue because are government has programs like F.A.S.A. that helps pay for college.
All these unions do is cause more problems for everyone and drive the cost of goods and services up. I think that unions should be banned.
Well, That is what our government wants, Another company to move to Mexico so we can pay less for the product, So what if it cost the U.S 18,000 jobs, We can afford it.(go figure)
So how much money in your opinion should they make ? So at last report roughly 8% of workers belong to a industrial type union, that is not including public sector unions like police of teachers,etc. So these 8% are driving up the cost of goods and services in this country
Hmmmmmm! Let's see. Management blames unions and unions blame management while 18,000 worker's futures hang in the balance. Hmmmm! Let's see, Republicans blame Democrats and Democrats blame Republicans while millions of American's futures hang in the balance. Yup!! Some crap never changes. At least we have football for now.
hey hey ho ho the ceo thug has got to go!!!!!!
The best thing would be to let them go bust. Mayor Bloomberg is going to put a limit on how many we can buy anyway so screw him. Someone else will make the Twinkie. My bet is it will be better because the Unions will claim they have razor blades in them or something of that nature. If not they will probably poison them to bankrupt the company that takes them over. I'm sure all those union workers will love being on the receiving end of Obama Care. No sympathy here.
It is just another case of the union putting people outta work, Just like the auto industry and Coal mining, Unions are supposed to be a non profit organization, yet they make millions off of union employees, You might not like it, But the unions of this country has had a big hand in where this country is today.
When the company folds and sells all the equipment does this mean the Picketing will stop. They should leave a few up just to show Hostess who won
I recall when my mom put Twinkies in my lunch box..was a metal lunch box (can't pass the metal detectors these days at schools).Anyway its was the 'Rin Tin Tin' design on it..still have it after all those years..the lunch box not the Twinkies.
Don't ship Twinkies to Mexico. A job or no job, screw the union! Come on Obama what about a government bailout? Hostess is to big to fail.
It's Romney's fault...
Fair and square Obama won and America Lost
REALLY? Hostess wants to pay out 1.75 MILLION to retain the same clowns that drove hostess to bankruptcy? In all reality you are not allowed to quit if your company files bankruptcy. When I WAS SELLING KRICKET cell phones I was served papers that said it was against FEDERAL law to quit. SO why are they trying to bleed the treasury of hostess?Do they want to get rid of the UNIONS that bad that they are willing to drive this ICONIC company into bankruptcy?
I DO AGREE that it is STUPID to have to deliver TWINKIES in a separate truck. They are all hostess brands so deliver everything in one truck.
I hope the GOVERNMENT steps in and takes back the raise in pay for management. Those raises are a SLAP to the face of EVERY hard working AMERICAN. UNION OR NON-UNION.
I GUESS THIS COMPANY IS RUN BY BAIN CAPITAL?The pay raises are in line of what BAIN charges as so-called consultants.
REMEMBER, if TWINKIES do go away there are always "CLOUD CAKES' FROM LITTLE DEBBIE. ALSO MRS FRESHLEY MAKES A FORM OF TWINKIE.SOME TIMES THEY TASTE BETTER.
And we don't need the government getting involved in this. Let the crap happen and the chip falls where they may. And how the hell did Obama's name, all of a sudden get injected into this? Incompetent management, incompetent union leaders created this crap. And 18,000 workers have to pay the price for that incompetance. That's the real tradgedy of this. All they want is a job so they could live and support their families.
@Bobby Byrne kind of the same thing I am saying in post 154
Recall "Dutch" got involved with the ATC's. His administration also were served with over 175 indictments (various charges). Iran-Contra, HUD Scandal, etc etc etc.... 175+ etc.
Pretty much sums it up,the real sad thing is the company is gone and people are out of work. Both management and the union should share blame,CEO's and board members should not vote themselves a raise when the company is in bankruptcy and the union should have worked out a concession package where say they take a pay cut,but if the company turns healthy and claws itself out,they get some of the concessions back.
You know what puzzles me about the CEO. He said on tv and the papers that the union was not the cause of the company demise. It was management decisions prior to him taking over the company. But he said the bottom line is that the union has to make the sacrifices in order for the company to survive. Why is it that these people who in many cases are making millions along with stock options galore can run these companies into the ground but it is the 9-5 worker that have to bail them out with nothing in return.
That is the same way our Government works. Congress makes all the mistakes and the Taxpayers pay
The Domino Effect, per the 50's.
Do the Unions not separate the middle class providing them a higher wage and benefits than those doing the same job?
Should have let the auto industry in Detroit fail -- Toyota, BMW, Honda, Kia, etc... are not having a problem making a profit building here and they also use more made in the USA componets in the construction of their car than Detroit. Maybe that is why they last longer with less problems and why I now drive a Toyota.
Kill the UAW and maybe I will think about it again
yes, I'm starting to see the dynamics now of how the U.S. is hemorrhaging jobs overseas.
What exactly is wrong with unions and why is it all of you anti union folks are so resentful of your fellowman who like you seeks to improve his lot in life.
In addition if $45k is too much (ha!) what is your estimation is fair?
Several states legalize pot & the unions want to make a tombstone outta 'da TWINKIE? Junk food is at a premium!! The only good thing about that is the twinkie won't DECAY!
Between Obama and/or the unions, I do not know which is worse for the future of my grandchildren. I have worked hard all of my life and never asked for something other than in prayers to God to help me. I am a self made man, and I did it without any help from Obama.
At one time in this country, our labor force needed the aid of unions, but that time has long passed. Teachers, fire fighters, police, postal carriers, etc. should be working for the resipients of their skills and to better themselves, not for unions.
God save this country.
Everybody wants to blame the unions. Yes, I agree there some problems with them. But I would like to know how much the CEO and other top dogs agreed to concede to set an example for the employees that they're all in this together and together they will find a solution. Little to no in formation is available on that topic. Why is it that when workers want a decent wage and benefits then they are now the bad guy? I work as a temp for a large manufacturer of heavy equipment that makes billions and yes there is a union but that company treats their employees like dirt. The always have labor issues. But the fat cat CEO makes millions. But the workers are just to shut up and put up. This country is going backwards for sure. Some people won't be happy until we go back to the days of the sweatshops with no rights at all.
A bad company deserves a union; a good company does not need one. All I know is that the combination of federal unions and General Officers that don't give a damn about the American taxpayer have ruined federal service. 80% of federal employees do not care about the American taxpayer; this number is 100% for federal contractors. We need to reduce federal employment by 80% and eliminate all federal contractors. Unions in the federal sector are a huge mistake.
I have worked as a Mill right in Union and non Union shops,your post Ann is one of the better ones I have read on here. Face it most of these people have never worked in an industrial type environment,the are basing their posts on misconceptions or political affiliations. Back when I worked in a union shop I was elected to the negotiating committee,I remember our facility along made a $150 million dollar profit and they wanted to gut our health care,they did take our double time on Sunday's away,along with several other concessions. We were not prepared to strike so we took what we could get. But I was also not impressed with the international union ( the Steelworkers) they seemed more concerned with keeping the due's money flowing. It just goes to show you that working people are caught between a rock and a hard place.
Damit Lammy Thanks for the most accurate comment on the board. The steelworkers union that i am with wants one thing. To run the union like a corporation and keep the dues flowing. We have an umbrella deal now. That keeps all 10 factories under one contract to ensure all dues are paid for another 4 years
Pretty much,we nailed their rep trying to do some side baring with the company without the consent of the Elected committee,we told the SOB if we caught him doing that again we would contact the NLRB. I don't hate unions,they have a purpose in providing a counterbalance to business however I have little use for the Steelworkers or that windbag Leo Gerard.
I think a lot of these posters do not understand that when you get hired into a certain place that is union you must join. Once under an umbrella deal if it is negotiated among all factories one cannot opt out. I am not going to cut off my nose to spite my face but these people must realize that there are a lot of concessions taking place that they are unaware of. I don't think many of the true haters have ever been in a union and the true lovers have an open mind. I for one am not a true lover but it has raised my family decently. The defined benefit package is now gone and we now have raises in our medical and dental benefits. So for the haters I have a very clean work record a sore back and shoulders from pipefitting up in the racks but oh well i chose it. Beats the hell outta generation welfare and that is what the people should be bitching about not a person that works union or non
Amen brother Amen.
It seems funny to me that the unions are being blamed for the down fall of everything. After all the union people in America make less than 10% of the workforce. Take away the public sector jobs and the rate goes to about 6%. What are you really afraid of, paying workers what they are worth, giving them health care, giving them time off at the holidays, giving them vacations,....oh that's right we are a leader in the world economy and we should funnel down to the rest of the world instead of leading . Come people wake the F up and think a little and find out what is really going on before you blame the unions.