-Submitted by David Drumm (Nal), Guest Blogger
CEO Gregory Rayburn of Hostess Brands, maker of Twinkies, Ho Ho’s, and Sno Balls, has announced plans to liquidate the 83-year old company. The company is in its second bankruptcy in a decade. Hostess sold about $2.5 billion worth of snack products last year with Twinkies leading the pack. However, the company has nearly $1 billion in debt and has $2 billion in unfunded pension obligations.
About 18,000 jobs are at stake. The unionized employees are represented by the International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM). BCTGM in September rejected a last, best and final offer from Hostess and went out on strike.
While Hostess CEO Gregory Rayburn was planning to ask his employees for wage and benefit concessions, he was awarded a 300 percent raise (from approximately $750,000 to $2,550,000). Nine other top executives of the company received massive pay raises.
Over the eight years since the first bankruptcy, Hostess employees have watched as:
money from previous concessions that was supposed to go towards capital investment, product development, plant improvement and new equipment, was squandered in executive bonuses, payouts to Wall Street investors and payments to high-priced attorneys and consultants.
BCTGM stated that “Our members are on strike because they have had enough.” The union’s members voted 92% to reject the company’s “best and final offer.”
Hostess plans to sell its most popular brands like Twinkies, CupCakes, Ding Dongs, Ho Ho’s, Sno Balls, and Donettes. In the mean time, Hostess products are flying off store shelves.
Competitors like Bimbo Bakeries USA (pronounced “Beembo”), also employing union workers and the largest bakery corporation in the US, may be a likely purchaser of some of the Hostess brands.
H/T: LGM, Think Progress, Policy Mic, Sacremento Bee, WSJ, Courthouse News.
TonyC, What I meant by “telling” was your reply @ 10:59a didn’t respond to my point on small biz. You have now responded and we agree to a certain degree. I could not abide putting a cap on the size of businesses. It’s akin to telling families how many kids they can have. As stated previously, you have a breadth of real world experience. We all respond differently to our work experience, but that’s the beauty of life. I think we can agree we wouldn’t want it any other way. It’s the ones who have done nothing w/ their lives that seem the most angry and negative. That’s the ugliness of life. C’est la vie.
” … certainly as smart or smarter than anyone here.” (Gene)
Harrumph!
Seriously, about two years ago I put into practice a couple of the suggestions Tony made in a post on this blog about business. Those two suggestions made a world of difference … a definite improvement in the overall performance. Recognizing that ego is often involved and willing to poke a little fun at myself, I say … I was smart enough to know to whom I should listen.
“Organization and rules are a necessity; specialists are a necessity, and the interaction of rule enforcement and specialists and the flow of information is called “bureaucracy.””
So spot on it bears repeating.
Why is it that people who don’t know much often think people who know a lot think they know everything?
The Chinese have an interesting and applicable proverb: “A closed mind is like a closed book; just a block of wood.”
Fear of the depth of their own ignorance, perhaps. An unwillingness or inability to learn? Maybe. Over compensation? Possibly. But for certain bluster about the knowledge and experience of others is not the same as knowledge.
“This man, on one hand, believes that he knows something, while not knowing anything. On the other hand, I – equally ignorant – do not believe that I know anything.” – Socrates
And he was the wisest man in Greece according to Phythians, certainly as smart or smarter than anyone here.
@Nick: I agree about small business; if I were King, or a founding father, I would put a limit on the size of all businesses. If they grew larger than that, they would have to split into competing businesses. I have been involved in many micro-businesses (under 25 employees) and I agree, those are more humane than bigger businesses. That is true for psychological reasons, btw; the more layers of abstraction there are between a leader and the effects of their decisions, the more sociopathic (i.e. uncaring, bottom-line oriented regardless of hardships created) the decisions are.
But I am not King, or a founding father, and I fail to see how a discussion of small business informs the argument about bureaucracy. Big business is a fact of life. Our government has to serve and protect 310 million people, big government is a fact of life.
I have started and run both successful and unsuccessful micro businesses, I learned my lessons from the failures and we made a lot of money from the successes. Right now I have one winding down (it made me money but cannot continue), and I have begun meetings for a new product with a college friend that has an idea (we were partners in one failure, followed by two successes, and this would be our fourth venture).
What works in small business will not work in big business. There is a natural limit on how many people can be in our “tribe” before we lose track of who is who and start to coalesce into cliques of “us versus them.” Organization and rules are a necessity; specialists are a necessity, and the interaction of rule enforcement and specialists and the flow of information is called “bureaucracy.”
What do you think is “telling?”
Well said, Tony.
@Idealist: TonyC, why do guys who know a lot, think that they know it all?
I do not think I know it all. I do think I know some things, my work, personal life and academic life experiences proves to me I know some things.
@Idealist: why jump in the gutter and sling ad hominems, like “cowboys who shoot from the hip”
Yeah, I suppose that is a bit snarky and over-generalized. But here is what I was thinking of:
In my experience with hundreds (literally) of workers in dozens of companies, those that complain about bureaucracy are complaining that it is standing in the way of their efficiency. Sometimes they are right, often they are wrong and it is a self-centered, unrealistic attitude that their job should be easy and the company should trust them. They fail to realize how that change of focus would transform the rest of the company, or allow people in their position to commit fraud, waste money, make catastrophic mistakes or just create an unreasonable work load on others in the company that have to more work so they can do less work.
As just one example, an engineer that worked for me, twenty years ago, thought it was ridiculous he had to clear parts with purchasing before he could use them in a design. He didn’t have to do that in the company he came from, and that was proof to him it was an unnecessary step.
But that is not a ridiculous check at all; building a machine with a part that is too expensive, or not available in quantity, or going to be discontinued in a year, or is single-sourced and / or made by a financially unstable supplier is a recipe for corporate disaster.
That is what the purchasing “bureau” in a company does, we didn’t invent that rule just to delay projects. The purchasers are not our adversaries, they are our scouts and helpers and doing part of our job. (Part of the “parts” part!)
They are experts at developing that kind of “meta information” to help us steer our way to a stable design that won’t require a redesign every six months because some actuator was discontinued and nothing else is available that fits in its envelope.
So sure, many bureaucratic requirements are nonsense, but (like laws) many exist because somebody was trying to correct a painful failure in a complex system. Perhaps they over-corrected, and now you have to sign for a box of pencils because some uncaught thief was stealing toner from a previously open supply cabinet.
But that is not a reason to use “bureaucracy” as a pejorative term. Those that disdain all bureaucracy are, I presume, ignorant of its necessity or function within an organization.
TonyC, I appreciate your intellect and passion. As I said, I worked for the govt.[total of 6 years]. The work was important, law enforcement as is your niece. I applaud her work. My wife worked for the Federal Bureau of Prisons and Federal Probation for 26 years, retiring in 2006. We both have the same attitude toward govt. bureaucracy and the same hard work ethic. She stayed and worked her ass off while many of her colleagues drank coffee and talked ssports and politcs. I had to get the f@ck out. She volunteered to do presentence investigations for her office. It was a win/win. She got to work on the truly interesting part of that job, investigating the offense before the court, the defendants background, and they apply that investigation to an incredibly complicated Federal Sentencing Guidelines. And, her lazy colleagues didn’t have to do them. She worked @ home on virtually every weekend. As you might imagine, we had many converstions about the horrible work ethic of too many Federal employees. We also knew other hard working law enforcement people[FBI, DEA, US Attorneys and AUSA’s, etc.] When we socialized we would usually laugh @ the slackers, but not always. TonyC, I understand the public and private sectors better than most because of my aforementioned varied experiences.
The most responsive, efficient, CARING, institutions are small businesses in this country. My immigrant grandfather started a small biz and w/ my uncle and dad’s help, built it into a restaurant and catering business. Small businesses care about their customers/clients and their employees. If they don’t, they don’t survive. I have taught my children, when you hear a politician talking about their caring for small biz, they’re lying. It doesn’t matter if there is a D or R after their name. Your neglecting to address small business, the backbone of this country, is telling.
TonyC,
Exactly the reasons that Karl XI started his in 1600.
He needed a system to stop the corruption and apply justice evenly without rakeoff. But oversight with teeth are needed in government bureaucracy.
@Nick: I don’t want a corporate country
Neither do I.
@Nick: Are you naive enough to think that the Dems or Repubs will control the corporate and govt bureaucracies? That will never happen.
Are you naive, Nick? What do you think can happen? Seriously, what is your alternative?
Bureaucracies exist on a spectrum for large work organizations; whether they are companies, government, charities, or universities. No control is chaos, too much control is stifling. But “bureaucracy” per se is not evil, it is a tool for controlling the flow of information from the bottom up (the organization becoming informed of reality), or from the top down (the body becoming informed of plans to be implemented and work to be done.)
Whether specialized sub-units are called “bureaus” or not, this is how we have to organize things. Bureaucracy is the nervous system of the large organization, in our government it is responsible for service to 310 million people. Calling for an end to that is calling for chaos.
@Nick: so the public and private sector leeches can sit around scratching their nuts and twazzies all day getting a nice salary and pension.
Why not join them? If you are jealous of their salary and pension, if you think it is a wonderland of fun and an easy life, put in an application! Put your belief to the test, Nick.
Bureaucracy is a necessity. There is no plausible way (meaning one that works with people as they really are) of accomplishing what the citizenry, through their Congress, has decided we should accomplish.
Bureaucracy is not just the nervous system of a large organization, it is also the immune system. Some small minority of people will say and do anything for personal gain; and the way to thwart most of them is with bureaucracy; by investigating people before rewarding benefits, by filling out forms, having independent checks to catch forging or skimming or internal fraud or waste or abuse. That is how we do it. It isn’t a perfect filter, but it helps. Just like the police cannot stop all crime, but most of us still believe crime would be much worse with no police at all. Just like your immune system does not stop all illness, but you can’t live long without it.
What defines the ideal size of a bureaucracy is much more an art than a science, because it depends on fairly unquantifiable externalities. Such as the size and number of threats the “immune system” component must face; and the necessary rates of information flow within the “nervous system” component, and the “sensory” effort it takes to acquire or develop that information.
My niece, for example, is involved in law enforcement, in particular she visits women with children on probation or parole for drug offenses to determine if the children are at risk and child services should be called. (Also women with deferred adjudication, sentenced to rehab, etc). She does that because a law requires it be done. But it is a rather slow and expensive chunk of information gathering to fill out a form; she averages three a day. (And such an easy job for a bureaucrat filling out a form, except for the filth, squalor, mice, fleas, lice, cockroaches in the crib and armed gangs on the stoop…)
*******
I am not defending bloat or corruption or laziness within our current bureaucracy; those are a result of a severely flawed political system that allows the people responsible for minimizing those flaws to ignore their oversight responsibilities without consequences. So, people being what they are, they take the route of least resistance and neglect their duty.
However I will defend government bureaucracy in general, it is as much of a necessity as having an army. There is no alternative, laws must be enforced, predators must be stopped, free riders must be thwarted both from within the bureaucracy and from outside of it. Such a system is going to be large, complex and imperfect.
I believe the complexity and imperfections are an inevitable consequence of providing protection to the citizenry; so sure, call me the Bureaucracy cheerleader if derision is a salve for your resentment. I am actually a cheer leader for the perception of reality and working within it.
Bron,
So they went in via the groin/hip artery. Have had that twice before, messy.
With the wrist artery insertion they have a little cuff which insures the exact right amount of pressure is applied to stop bleeding but not the flow of blood to the hand. Pressure is lightened, screwing a little thingy, stepwise over the next 24 hours until it can be taken away. No bleeding problems, no elephants either.
Did you get a rebate for the groin insertion, or was there some special reason? Are you sure that they were doctors and not interns or residents?
David Blauw
1, November 17, 2012 at 11:09 pm
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I used to have a crush on the mailman! He was not typical of todays mailmen, he loved the dog and brought the mail right to the door, he always stopped to chat for awhile….the town was not that big but not so small either…and of course the mail back then wasn’t all just terrorist marketing crap…..
Pete get back quik, and when you do there is just 1 word…. Flax.
and the best Moonpie? no doubt, it’s a S’more…..made w/the best chocolate and a marshmallow toasted on a stick, at an open fire, with the skin light brown and bubbly…..and chased with an Italian Coffee (it’s the strega……. )
😉
pete,
Got mine done two weeks ago, all except the stent, which was not found to be needed. The problem was not constriction of flow as suspected, but the same procedure was done. I once earlier had a stent inserted over 10 years ago.
It is easy as pie nowadays. Expert team, well-drilled, team leader nurse, mil style report before the actual process starts. Tell the doc what’s on your mind.
A slight twinge as they open the artery in the wrist (not groin as before), local anaesthetic for the first
2 feet of the arm artery, insertion of sond, and then you wait, no other sensations after that.
I was out with a general sedative when they put in my stent 10 years ago, so can’t report how that will feel.
I presume you have had an ECG before this procedure, so the decision for a stent is based on that.
You’re in good hands. My first one was on the fly during a heart attack. Be glad that yours is not.
I had two inebriated docs called in from their suppers.
Reason for all the info, is that, for me, I fear the unknown more than the known.
So relax and enjoy the view. Your fingers won’t go cold. Ask the nurse on your right to hold them if needed. She is the chief reassurer.
Very proffs, 27 years since it was chancy. Long time, much progress.
@bettykath: Greed was the lobotomy.
Funny because its true…
“Because fighting for oil profits is more important than stopping e coli and salmonella outbreaks or making sure the new psych meds don’t cause 5% of those treated to have suicidal thoughts or other harmful side effects.”
I approve of the whole, and I know that you don’t give a rat’s a55, but I say it anyway. BUT, any specific solution other than words? None advanced so far.
pete:
I had that procedure but ended up not needing one. It is pretty simple or at least mine was. A friend of mine had one too and he said the same thing.
The worst part is the end where they press on the spot they put the catheter in, feels like an elephant is standing on your hip.
David Blauw,
Think that a mailman could be my favorite writer and observer of life. No others named but several are right behind, but you lead. Have you published yet?
Not said derisively, in all honesty. You should.
Inside each body is a soul. Some souls are emptier than others. But all souls have their stories, of wider or narrower interest.
Lotta,
Re Hostess and press release.
In the twenties or earlier it is said that management feared that workers would literally take over the
business and run it communist style, ie together.
Now if that is true, and if then management believed that running it could be done by workers, why not now.
It is property rights that are the sole hinder protecting owners?
Do not workers have an investment too? I worked for a tech company. Without the employees it would have been worthless.
Have we not seen examples of employees buying out a company to then run it. As a product producer Hostess is not a company I would cry for, but as an example of how to stop WS vultures from draining the blood from a company over 8 years, some solution needs to be tried.
We have FDIC who protects, up to a point, the savings of depositors. Could an oversight agency and/or a compelling law in re CPAs work, force a yearly oversight of drainage activities, such that the companies would be put into protective managememt, or liquidated and/or reconstructed before only the bones are left?