if you ran hostess what would you do?

[rdking647]

your losing 2m a week.
how do you keep the company in business?

[Tommy_Carcetti]

1. Negotiate with your workers so you can get back to business.

Pretty easy, don't you think?

[dmallind]

9. OK. You're now losing 2MM plus whatever extra labor costs you incur per week. What next?

Cut executive pay? How much does that give you back? What next?

[Skidmore]

48. They reached this point for other reasons too.

People not buy as much of the product maybe? Other management choices? How flexible have they been in their business to problems? What was their relationship with their creditors? Some businesses just keep on doing the same old thing regardless and hope regression to the mean will save them.

[PoliticAverse]

2. First get rid of the management that got into this situation ? n/t

[rdking647]

5. doesnt change things you still need 2m week.

changing management takes time. which you dont have.
if you dont come up an extra 2m a week quickly you go out of business.

[cthulu2016]

42. Why do we assume zero access to credit?

[FrodosPet]

49. Because the greedy lenders want to be repaid?

Nationalize Hostess, and cover any shortfall of revenue over expenses with grants from the general fund. Tell their existing creditors to jump on a stick and bounce like a bunny. Order the schools to include Wonder Bread and a Twinkie as part of the essential daily requirements. An extra $100,000,000 a year is a small price to pay to help keep America obese and diabetic.

After all, it is only 33 cents per person to make sure we have a stock of long shelf life sweet treats for the zombie apocalypse.

(I know I should be including the sarcasm thingie. Maybe next time)

[Sekhmets Daughter]

55. The company is already in debt to the tune of $700mmillion....to private equity firms...

Sound familiar?

[Ikonoklast]

3. What would YOU do?

We already know that you blame Labor.

What are YOUR solutions?

[rdking647]

13. my solution

cut salarys and pentions. all salarys and all pensions. id replace a pension plan with a 401k type of plan
the execs get $1 a year plus a bonus. the bonus would be based on the company returning to profitability and the cuts being restored. if teh company cant become profitable then the execs get zero

[Ikonoklast]

20. Bust the union, in other words. Thought so.

Like management will restore the 'cuts' as soon as profitablitiy returns.

You make me laugh.

Same shit I heard from 'management consultants' that promised the same thing, all the while the company I worked for was trying to dress up its bottom line as it was being sold.

[calico1]

59. +1

[SubgeniusHasSlack]

24. The company was bought by a vulture capital firm whose only plan was to bankrupt and dismantle the

company.

Your anti-collective bargaining meme is false.

[JI7]

75. that's what Romney did with all the businesses he "created" isn't it ?

[Robb]

26. Everyone's salaries have already been cut.

The executives were overpaid for years, have been on the "oh we'll only take $1 a year" plan since April.

The executives don't care; the company's bankruptcy will not wipe out their generous severance packages, which will be paid first -- debts are paid from largest to smallest.

There hasn't been a chance of this company surviving for some time now; the only details worth considering were how the company's officers could best line their pockets before leaving. And they've done a fine job at it.

[Sekhmets Daughter]

52. That was after being caught

giving themselves 80% raises the previous year.

[nadinbrzezinski]

27. Like this has worked every other time

It's been done...okay.

[FightForMichigan]

4. Maybe not give myself a $1.5 million pay raise

Or best of all, keep up with customer demands and retailing trends, evolve a product line that matches people's increased desire for healthier snacks, get rid of or downplay products that have become a joke or metaphor for everything wrong with American's dietary habits.

They teach these things at biz school still, right?

Oh, wait, you said, "If you ran Hostess." I forgot.

If I ran Hostess, I'd be a vulture capitalist buttnugget who gave myself an overly generous salary while crashing the company into the ground and blamed everything on people just doing their best to scrape by.

[rdking647]

6. so in other words you have nothing

right now. we are where we are. what do you do to save the company

[FightForMichigan]

10. If I repost my answer, would you read it this time?

[MineralMan]

15. Not what they've been doing, certainly.

What I would probably do is trim down the company, from the top down. I'd eliminate product lines that are unprofitable, and introduce some new products that were healthful for people. I'd negotiate with my employees to achieve the maximum productivity while maintaining decent wages and benefits. Since I'd probably be shutting down some parts of the business, I'd try to shift displaced employees within the company.

There are no simple answers.

[joeglow3]

28. Hostess is just the name

They make a LOT more than just hostess snacks (much of what fits into what you would do).

[Kolesar]

31. You're answer made me LOL

Maybe it's the sugar high I'm on [font size = 4]![/font]

[Sekhmets Daughter]

56. The executives gave themselves

80% raises the year before filing for chapter 11....

[The Straight Story]

7. Start an online request for a bailout from pot smokers (nt)

[Robb]

8. I would be certain my executives were taken care of.

I'd increase their salaries 80% in advance of a bankruptcy filing -- so I could show the piss-poor financial situation to the bankruptcy judge and beg him to allow me to walk away from all my union contract responsibilities.

Then when he said "no" I'd threaten to shut down the company -- I mean, I wouldn't care, I've already bled it dry -- unless the workers agreed to take up the slack.

Then when the unions stood firm, fuck 'em, I'd shut the shit down and go live on my island.


















Oh, wait. That's what they actually did.

[LiberalEsto]

11. Organic Twinkies!

Whole-grain, saturated fat-free Twinkies

[AlexSatan]

19. You can go ahead and eat the box the Twinkies come in

Can I have the Twinkies that were inside?

[slackmaster]

12. I'd convert it over to making and marketing safe, nutritious snacks

[rdking647]

16. and how will that save 2m a week

[slackmaster]

23. They would probably start losing 3-4 million per week, but I have a plan.

They could make it up in volume.

(I've never taken an Econ or Business Administration class at any level.)

[Angleae]

73. Would that plan involve pot smokers by any chance?

[AlexSatan]

21. You'd lose me as a customer

If I wanted a granola bar, I'd buy a granola bar.

[slackmaster]

25. That's OK, I've never liked you anyway.

[AlexSatan]

60. :P

[Brother Buzz]

14. Shut everything down, license the label to a Mexican bakery company, retire

Simple, no?

[Kablooie]

17. I'd get very fat and die early.

[PufPuf23]

18. I'd have to see the balance sheet and other financial statements.

I doubt labor costs are the basic problem.

I would bet debt and overhead are the problems.

[ffr]

22. Selling a sugary nutritionless product is a dead end

It only sells for so long before people move on or die.

Labor costs and business overhead are a part of any manufacturing model. Marketing and innovation are what grows the company. Seems Hostess is more interested in cashing out than finding healthy food to sell.

[Comrade_McKenzie]

29. Hire rogue intelligence agents to bring down my competitors through several...

"Snakes on a Plane" scenarios.

[MrYikes]

30. I'd let it close,

then I'd wait until next Wednesday when Pepsico and Yum walk in, buy it up and take over. Rehire the workers and be back on the shelves by the weekend.

[Taverner]

32. Redesign, remarket and rebrand

[kelly1mm]

33. Given the financial situation as being reported, I would liquidate the company. Their business

model does not work anymore. Legacy costs do not allow them any other choice. Other food companies have much lower costs due in part to better management and non-union labor.

[limpyhobbler]

34. Sell the equipment to the workers for $1 and let them run it as a non-profit co-operative.

[onenote]

35. Where are they going to get the money to cover costs?

[limpyhobbler]

45. maybe they could get a bailout or something.

[no_hypocrisy]

36. + 1

[kelly1mm]

37. They are currently in Bankruptcy. They cannot sell assets for $1 as creditors have secured

rights to the equipment and all sales need to be approved by the BK Court.

[limpyhobbler]

44. but why is the creditor's right to debt collection more important than the worker's right to a job?

[kelly1mm]

46. Because worker's don't have a right to a job under current BK law. Maybe that needs

to change but I doubt congress will do that.

[limpyhobbler]

47. those laws suck. nt

[kelly1mm]

50. Possibly, but then why would anyone lend a struggling company money? Honestly, would

you lend Hostess money if you could not have that money secured by an asset?

[limpyhobbler]

65. The needs of the community and the bakery workers should be considered during bankruptcy.

When lending money to a company, keep in mind that the people who work there are human beings and not robots. They may try to keep the factory open without management. If it becomes more common it will be considered normal. There are other human values that come into this besides protecting the banks. It may even be that without the need to turn a profit and maintain the expensive management class, the business itself will be able to meet its existing debt payments and keep operating.

[Ikonoklast]

67. Ignoring the fact that this was already done twice, what else you got?

[AlexSatan]

62. Because the creditors have already given

something of value and are just hoping to get some of it back.

The employees have already been reimbursed for the time/labor they have given.

I guess there is nothing stopping those employees from opening their own company--but they will likely need creditors to make it happen.

[Tierra_y_Libertad]

38. Change the name to Bottomless, open bars, and sell beer.

[Savannahmann]

39. Hand the reigns of the company over to a panel made up of the Workers

They're the ones on the line, and they know where waste is. Then I'd stand aside and let someone else do what I'm obviously unable to. But then again, I believe in the power of unions, and support that organization. I'm not a fucking mouthpiece for the Rethugs who blame Unions for being too greedy.

[randome]

40. I don't think the unions are at fault, either.

But selling to the workers still leaves the company $2M a week in the red.

I don't think the market for their product is there any longer. Not enough to pay expenses. If they really are losing this much per week, they don't have time to retool and go into some other line of business, IMO.

[AlexSatan]

63. If it is that easy

then the employees should just open up their own company and run it correctly.

[cthulu2016]

41. I would bring back the Chocodile. Duh.

[Deep13]

54. I know, right?

I posted mine before I saw yours.

[randome]

70. I would sacrifice several large Republicans to Cthulu.

And hope for the best.

[backscatter712]

43. The vulture capitalists were planning to close Hostess & chop it up from the beginning.

Liquidate, cash out, sail away on golden parachutes.

Are you actually so naive as to think the strikers instigated this?

[WinkyDink]

51. I'd read up on company history and post a longer, more insightful OP, that's what I'D do.

[Deep13]

53. One word: Chocodiles. nt

[Bad_Ronald]

68. Agreed! Chocodiles were magical. I put one in our swimming pool one day & the waters parted

Actually, everyone in the pool thought it was a floating turd & rushed out so quickly on either side that a whirlpool formed in the center.

Gawd, I loved Chocodiles.

[Cleita]

57. Make a decent product.

Hostess should have been shut down by the feds for producing a toxic product decades ago.

[on point]

58. Fire top mgmt, save the cash leave it to mid tier mgrs to run the show.

[Cleita]

66. Exactly. Most likely they have been running everything all along

anyway while the upper echelon skimmed the cream. Anyway in my working days, I noticed that the middle managers did all the work while the COs took the credit and the money.

[IDoMath]

61. First, I'd find out WHY I'm losing 2m a week

How the hell can I solve your problem without data?

Oh, right. That's how Washington and Wall Street work isn't it?

[Raine1967]

64. They weren't losing anything...

They were giving it to the top:

BCTGM members voted to strike Hostess after the company imposed cuts that included ending payments to the employees’ pension plan while executives awarded themselves massive bonuses. Among the raises was a 300 percent raise (from approximately $750,000 to $2,550,000) for the then-CEO of Hostess. At least nine other top executives of the company also received massive pay raises, including one who received a pay increase from $500,000 to $900,000 and another received one that brought his salary from $375,000 to $656,256.

Vulture Capitalism did this -- They should damn well not be blaming the workers.

Even Hostess at their website said they are protecting their *estate*

The Board of Directors authorized the wind down of Hostess Brands to preserve and maximize the value of the estate

Why did they strike? http://www.hedgeco.net/news/11/2012/hedge-fund-owned-hostess-to-liquidate.html

The nationwide strike began on Nov. 9, when the company cut workers’ wages by 8% and benefits by 27 to 32%.

and this was after they made a concession back in September http://money.cnn.com/2012/11/14/news/companies/hostess-liquidation-thursday/

In September, one of its major unions, the International Brotherhood of Teamsters, voted narrowly to accept a new contract with reduced wages and benefits. The bakers' union rejected the deal, however, prompting Hostess management to secure permission from a bankruptcy court to force the new contract on workers. {snip}

The new contract cuts salaries across the company by 8% in the first year of the five-year agreement. Salaries then bump up 3% in the next three years and 1% in the final year.

(edited to add links)

[PD Turk]

69. At what point in time?

If it were turned over to me at a point before it was stolen blind by crooked management I would have fired all the top mgmt the minute I saw what they were up to.

But it's too late now I'm afraid, if it were handed over to me today? I'd probably call security and have the CEO, COO, CFO and maybe the Sr VPs delivered in handcuffs to the guys on the picket line, along with a guillotine.

[Zorra]

71. Well, given that we have basically zip info about the real inner workings of the conglomerate,

it's impossible to answer that question.

Given that everything was above board, and the business was actually failing, this is what I would do:

First, as a responsible business person, I would scale back my lifestyleand put as little profit from the business in my own pocket as possible.

Then, I'd find a satisfactory compromise with my work staff.

I'd let them know how much I appreciate what they do, and how much I value them, and ask them to work with me to get us all through the crisis.

Then, I would offer ownership shares to all work staff.

Then, I would personally review performance of all upper level administrative/management personnel, unless I had an auditor who I trusted implicitly and could delegate the job to with confidence.

I would pinpoint all the exact causes of profit loss.

Then I'd give pink slips to administrators/managers found responsible for mismanaging my business to the point where it lost money.

Then I would limit executive salaries to $350,000, hiring fresh, hungry talent where necessary.

Dow Jones Uncovers Alleged Looting At Hostess Amid Talk Of ‘Shared Sacrifice’ By Execs
http://www.teamster.org/content/dow-jones-uncovers-alleged-looting-hostess-amid-talk-%E2%80%98shared-sacrifice%E2%80%99-execs

Then I'd take steps to remedy all the problems that had been causing profit loss, adapting to each respective situation as necessary to solve the problem.

Then, I would hire fresh, hungry talent to innovatively develop new, healthy, totally natural, very tasty, highly desirable, and very marketable products that I could produce with minimal overhead, that would appeal to the changing modern market. This would increase my revenue.

Then I would start putting some money back in the cookie jar once I'd solved the problem.

[Spike89]

72. Franchise and regionalize

I'd have focused on saving the brand. The corporate structure wasn't really feasible for that product in today's market. What worked for so long--relatively unique baking/packaging techniques and a "first in sector" branding blitz--no longer is enough to overcome the primary weakness of the product (no, not the nutritional "value&quot . The product has astonishingly short shelf life for a National brand--despite folklore, most of the Hostess line has a sell-by date measured in days or at best a couple weeks. Although relatively lightweight, the product is bulky and fragile and doesn't have an especially high value/cu foot. It is a product that inherently has a huge advantage being made locally.

Hostess long ago lost virtually every advantage in technique/packaging. They were extremely innovative in their day, but we're talking cakes and bread. They have a huge number of regional and "sub-brand" competitors each of which can make a creme-filled sponge cake (Twinkie) on automated equipment for near the cost Hostess managed (Hostess did have huge scale advantages, but distribution and advertising costs more than cancel the savings).

The brand value is very high--love them or hate them, the Twinkie (Ho-Ho, Ding Dong, pie, load of Wonder Bread) you buy in Oregon is exactly as good (and "fresh&quot as the one you get in Maine, Florida, Nebraska and it doesn't matter if you buy it in the summer, winter, or spring--it will be exactly as good as the last one you bought.

Because everyone is freaking out (rightly so) about a union business shutting down, I've got to put my 2 cents in. The "sides" in this case are not just the workers or the management. Competitors are a problem. It is very difficult to "buy union" in the grocery store. It isn't easy to tell by any means, groceries are really price sensitive, and there are some very powerful issues to consider (Organic, sustainable, local, healthy, ethical) that can actually be in conflict to the union-is-best ideal. Despite that, we need to do better at promoting unions and especially at getting unions into more and more factories and job segments.

[JI7]

74. set up some small bakeries around the country

people seem more into making stuff themselves these days with all those food shows and free recipes people can get on the internet.

also small bakeries seem to be making a come back because of those shows.

so maybe set up some bakeries around the country. people can buy the packaged crap for cheap but they can also make fried twinkies and other crap they sell at the fairs.

[JoePhilly]

76. Where does your data come from?

Without that, there is nothing to discuss.

What are their expenses ... what are their revenues ... ???

What is their debt structure?

What are their physical assets?

Unless you know the answers to these questions, you don't know $#!* about their business.

[ibegurpard]

77. give up my 120 million in salary and stock options and perks

and live on a living wage until I could make the company profitable again

[aandegoons]

78. Blamed myself for the fuck up I made.

Apologize to my workers, and offer it for sale to the union.

[jmowreader]

79. What I would have done would have started 15 years ago

The first thing I would have done is NOT sell the company to LBO sharks.

Hostess had one massive problem: the product line stayed the same for decades. They fell into the trap of buying innovation - the last expansion of their line came by purchasing Dolly Madison. So new products were key. Maybe a core of six to eight always available SKUs and 100 seasonal products. No one would eat pumpkin snack pies except in November and December, but they'd eat the fuck out of them then. Do something to create excitement.

Next and biggest problem: Hostess Had no unique items. Large percentages of their sales came from white bread. Bigger problem: as a contract baker they made a lot of their competition.(Next question: in areas where most of the bread is either Wonder in a Wonder bag or Wonder in a house label bag, what provisions are being made to tide them over til Grupo Bimbo can buy the local bakery?) House brands sell at lower prices in part because they wholesale cheaper. I actually would have ditched Wonder years ago and created a line of flavorful premium breads to only sell under my own brand. Let supermarkets own the commodity bread space. No one buys Wonder-type breads because they're tasty, but because they hold deviled ham so well.

Next problem is the bakery network. It is aging and needs upgrades - common in post-LBO companies.

So basically, my solutions are:
1. No vulture capitalists
2. New and exciting products
3. Better and more efficient plants
4. Don't compete with my customers

This used to be basic business. Today business sees next quarter as long range planning.

[B Calm]

80. Get rid of upper management, get rid of

the corporate jets, and start treating hourly employees with respect! Allow the employees to buy and run the corporation!