Wednesday, May 1, 2013

Twinkie is Reborn. America Celebrates. The Truth?




The nation is celebrating the rebirth of Twinkie.  The defunct and bankrupt company has been resurrected from the deathbed of bankruptcy.  United Liberty, a free market website, is ecstatic.

Twinkie is Making a Comeback Without Big Labor
It seemed like the Twinkie was done for at the end of the last year. Due to high-labor costs and a union unwilling to make concessions to end a strike, Hostess was forced to liquidate its assets, including the spongy, creme-filled snack. But the Wall Street Journal notes that the Twinkie and other sweet snacks will be make a comeback July — and labor unions won’t have any influence:
The company that bought the Twinkie, HoHo and Ding Dong brands out of bankruptcy is gearing up to reopen plants and hire workers, but it won’t be using union labor.
Those evil labor unions are gone.  Labor unions must be evil because Hush Bimbo himself talked about those greedy labor unions.

Ding Dong! 18,500 Hostess Jobs Dead The Rush Limbaugh Show
RUSH: Look, here I'm already being asked, "Are you gonna talk about Hostess?" Yeah, I'm gonna talk about Hostess. You know what, 18,500 people gone, Hostess Twinkies, Ding Dongs, shut down. Some people might think it's a buy opportunity if you want to get in the Ding Dong business. But folks, if you need an indication that the Democrats will never compromise on anything, look at this. Hostess is going out of business because of unions. Now, that's 18,500 jobs. You would think in this economy that somebody might want to show the ability to compromise if only to fool people. They won't even compromise on this.
I think it's good to talk about those evil and greedy labor unions, especially since Rush Limbaugh is worth $350 million and earns $40 million a year according to a website named Celebrity Networth, here.

How greedy were those evil Hostess labor unions?  According to Philly.com, senior longtime employees earned $18 an hour (40 hours a week X 52 weeks equals $37,440 a year) but that the newer workers earned about $10 a hour or $20,800 a year, here. Moreover, those greedy labor unions were forced to take an 8% pay cut which was very painful.  If Hush Bimbo took an 8% pay cut, he'd still be earning $36.8 million a year.

OMG, those greedy labor unions are trying to keep their $10-$18 an hour jobs.  Who in their right mind could possibly imagine such gargantuan greed?

Of course, this isn't the end (Twinkie's bankruptcy) or the beginning of Twinkie's rebirth without labor unions.  There's a whole lot more to the story than labor hating pundits gleefully ignore.  I even blogged about it.

A Twinkie Autopsy


Twinkie-gate is getting a ton of media and blogger attention because of its bankruptcy and the loss of over 18,000 jobs. However, there is a whole lot more to the story besides the emotional aspect, and like everything else it's a whole lot more complicated than soundbites and rants from the left and right.

The right wing Twinkie meme: A fine capitalist company like Hostess was forced out of business by the evil labor unions.

The left wing Twinkie meme: The evil and greedy capitalists treat their labor like expendable garbage and only care about profits.

The Libertarian free market meme: Let the markets sort it out....

Jonathan Turley's liberal leaning website reported on the Hostess bankruptcy, here:

"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.. 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."

Is the Hostess bankruptcy an engineered bankruptcy, a chapter straight out of the famous Wall Street movie staring Michael Douglas, a legal maneuver to avoid pension liability, a scheme to wiggle out of paying its debts, a strategy to kill the unions or is it something even more sinister?

Synergy is defined as the belief that the whole is greater than the individual parts. In Wall Street speak, the individual parts are worth vastly more than the whole. All those Hostess Registered Trademarks have value, probably considerable value, and there is no doubt that they will be sold for the highest possible price.

Creatures like Hostess, who are wallowing in mountains of debt, are all products of the leveraged buyout (LBO) fever that was born in the 1980's after the dollar was de-tethered from gold and easy fiat money became as prevalent as grains of sand in the Sahara Desert.

Understanding the LBO game requires understanding the concept of leverage. Simply put, leverage is very little equity (no skin in the game) and a big pile of debt to play the takeover game and frequently the hostile takeover game. The LBO players are typically Wall Streeters, Hedge fund operators, private equity firms and just about any financial high roller seeking to make a big play with borrowed money. Many of these takeovers absolutely included plans to bust up companies and sell them off piece by piece.
The Twinkie autopsy isn't about labor union greed but it's definitely a well documented story about bankster greed, CEO greed, LBO high roller greed, Wall Street greed, executive greed and a ton of other non labor union greed.

The Twinkie story is so nasty that AFL-CIO President Rich Trumka said: What’s happening with Hostess Brands is a microcosm of what’s wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor. Crony capitalism and consistently poor management drove Hostess into the ground, but its workers are paying the price. These workers, who consistently make great products Americans love and have offered multiple concessions, want their company to succeed. They have bravely taken a stand against the corporate race-to-the-bottom. And now they and their communities are suffering the tragedy of a needless layoff. This is wrong. It has to stop. It’s wrecking America.

Imagine that!  The president of the AFL-CIO is invoking crony capitalism as the reason for the Twinkie disaster.  Mr. Trumka is right.  Crony capitalism is definitely the root of the problem as the gurus of high finance rape and plunder America and the American workers.

Here's the truth about all those new Twinkie jobs that will be created because this scenario is playing out all across America every damn day - they will be minimum wage jobs and the workers will be so poor that they will be eligible for entitlements including taxpayer funded food stamps and government healthcare.  Then Hush Bimbo and ilk will be bitching and moaning that those poor bastard worker slobs are on welfare because, well, workers who don't earn enough to eat deserve to die of starvation.

At the end of the day, low paying minimum wage jobs that result in entitlement dependency are nothing more than corporate welfare where the social costs of employees are transferred to the taxpayers and all for the benefit of bankster/corporate profits.

Rush Limbaugh celebrates, as are all the banksters, lawyers, financiers, CEO's, executives etc. who engineered the demise of Twinkie from LBO thru bankruptcy, union busting and its rebirth as a non-union operation.

Those poor bastard workers don't deserve $10-$18 buck an hour according to many, including an arrogant and haughty radio talk show dude who probably thinks he's vastly underpaid at $40 million a year.

There is a lot that is wrong with America but any economic system that makes the rich richer and the poor poorer is morally repugnant.  America has morphed into a nation of oligarchs of the rich, by the rich and for the rich.  

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