This guy is a 14 year employee of a Hostess bakery.
So, … a perspective you haven’t heard much. A worker on the inside watching it happen.
The business practices of these hedge funds in this Hostess deal over the years would get a pat on the back, with a “job well done”, from our old friend Mitt Romney. ( Mitt has to be heartbroken. He thought he was going to get the chance to try to do this type of thing with a whole country. A whole economy to manipulate for profit)
I’d recommend going to read the whole thing, but here’s a few paragraphs to give an idea.
Hostess in a legal sense is a piece of paper. A privately held piece of paper. Passed from owner to owner for the purpose of profit. The current owners are hedge funds Monarch and Silverpoint, with the later addition of Ripplewood. They are the board of directors. You may have heard that there have been 6 CEOs since 2002. There has only been one ownership group that whole time, the hedge funds. It is their business plan that those CEOs executed. Well.
The goal always was to maximize profits. Baking just wasn’t a part of that picture. Monarch and Silverpoint funded the bringing together of Hostess/Wonder and Butternut/Dolly Madison in 1999. Both baking companies were profitable and had great infrastructures. Neither company was failing.
When these hedge funds figured out that they had to actually reinvest in their facilities and delivery equipment over the years, they simply didn’t. Instead they turned their profit focus to brand valuation and pension theft. The goal was to lower Union costs then sell the brands and bakeries. They were able to strip 1/3 of our yearly income in the first bankruptcy and the management was paid millions while the company lost 100’s of millions. They failed to break the Union so they held onto their investment while forcing the company to suffer for a few more years.
The company intentionally loaded itself with debt it knew it would never have to repay, $341 million in the year leading to the second bankruptcy, up from $136million the year before. That overbloated, intentional debt is now used by the company to blame the Unions for costing too much. The pension total that they stole from the bakers was only $50million of the $341million loss. Again, most of those debts are gone, like the $4.25 an hour they stole from our checks for over a year.
This company sold $2.5Billion last year. They have sold $68million worth of Twinkies this year so far. If these hedge funds and their toy CEO create brand and bakery packages and sell them off, they will be profitable. Even after years of losses. Profitable enough to even pay their pension debts. But they won’t, because the judge has already waived those debts. And they will do it at the loss of thousands of jobs and pensions.