Metro Jacksonville

The closing will put 18,500 out of work, including 200 at the Jacksonville plant.

QuoteRVING, Texas (AP) â€" Hostess, the maker of Twinkies and Wonder Bread, is going out of business, closing plants, laying off its 18,500 workers and putting its brands up for sale.

The Irving, Texas, company said a nationwide worker strike crippled its ability to make and deliver its products. Its brands also include Ding Dongs, Ho Ho’s and Dolly Madison.

Hostess had warned employees that it would file a motion in U.S. Bankruptcy Court to unwind its business and sell assets if plant operations didn’t return to normal levels by Thursday evening. The privately held company filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade.

full article: http://jacksonville.com/entertainment/food-and-dining/2012-11-16/story/goodbye-twinkies-hostess-shutting-down

While Hostess might be shutting down there is a very good likelihood that some other company will purchase the "Twinkie" name and continue to produce them.  Chances are you will still be able to get Twinkies.

Who in the world eats that crap anyway?  No taste but sweet fat.  Good riddance!

Gee thanks, Stephen.  That takes care of me eating any lunch today. (shudder!)

Btw, they produce more than Twinkies. Brands produced by Hostess:

Baker's Inn
Beefsteak
Blue Ribbon
Bread du Jour
Butternut Breads
Colombo
Cotton’s
Di Carlo
Drake's
Dolly Madison
Dutch Hearth
Eddy’s
Good Hearth
Holsom
Home Pride
Hostess
J.J. Nissen
Merita
Millbrook
Mrs. Cubbison’s
Nature's Pride
Parisian
Standish Farms
Sweetheart
Toscana
Wonder Bread

I believe the plant of Busch Drive was constructed to replace the old Merita Bread bakery in the Springfield Warehouse District.

I can remember touring that old Springfield Merita plant as a kid on some sort of school field trip.  The smell was wonderful.

Unions killing more jobs

I think Hostess was in trouble before this. The union says Hostess execs got 200% raises and they were being asked to take pay cuts. Hostess is saying it is all the Unions fault. I beleive there is truth in both. I am sure the executives and board will get some nice money no matter what. The common employee gets squat. Maybe the union could have taken the paycuts and waited to fight their battle when times were better.

Not all of their stuff was bad for you:

Nature's Pride:
http://en.wikipedia.org/wiki/Nature%27s_Pride

Quote
Launched in February 2009, Nature’s Pride bread is the first completely all natural line of bread to be available across the country.[1]

The brand offers a number of bread products including Nature’s Pride hearty wide pan and traditional sandwich bread varieties and Nature’s Pride Premium Harvest buns and rolls.[2]

All Nature’s Pride’s products are baked using 100% natural ingredients and contain no artificial preservatives, colors, flavors, trans fats or high fructose corn syrup.[3]

Although the Springfield plant has been demolished, Hostess still operates the 11th & Market site as a fleet maintenance center.  I guess that's getting shut down too.

Fault was mutual I believe, the executives gave themselves 80% raises last year and the unions wanted more money for their pockets.  In defense of the executives, when the current CEO, Gregory Rayburn (who was really hired 9 days before as the man in charge of restructuring the company only for the then-CEO to walk out the door) came on board he lowered top executives pay to $1 for 2012 fiscal year.  I understand and respect the unions efforts to fight for pension benefits (after all, when you give 20-30 years of your life to a company you really do deserve something back) but now they have no job.

Chances are a white knight will step in and purchase company assets, hopefully along with most of the employees.  I remember back in 2007/2008 there was a Mexican bakery company that fought very hard for Hostess.  I am sure they are crunching numbers today.

Being only 32 myself, very idea of pensions for my generation are unheard of.  Even the idea of unions is becoming antiquated.  I guess Twinkies really do have an expiration date.

What a sad day for 'Merica!

This ordeal is sure to jeopardize the supply of Zingers made by Dolly Madison Bakery.

In all fairness like cline stated, it is all but certain the compandy and/or its brands will just get bought out by a larger rival like Kraft or Nestle, etc. for pennies on the dollar.  Take away any disdain for Twinkies, Zingers, etc.; brands like Merita, Wonderbread, Blue Ribon, and Eddy's are much too valuable to left for dead.

I doubt they will use any of the old workers though. They will move all processing to existing plants and use current workers.

Quote from: stephendare on November 16, 2012, 11:48:46 AM

its made with bleached, sugared suet as the creme filling.  Ever heard of suet?  Wonder why they don't spell it 'cream'?

http://en.wikipedia.org/wiki/Suet

Really fun, if horrifying book, if anyone is interested in learning more:

QuoteTwinkie, Deconstructed: My Journey to Discover How the Ingredients Found in Processed Foods Are Grown, Mined (Yes, Mined), and Manipulated Into What America Eats

Like most Americans, Steve Ettlinger eats processed foods. And, like most consumers, he often reads the ingredients labelâ€"without a clue as to what most of it means. So, when his young daughter asked, “Daddy, what’s polysorbate 60?” while eating ice cream bars at the beach on a hot summer day, he was at a lossâ€"and determined to find out.

In this fascinating exploration into the curious world of packaged foods, Twinkie, Deconstructed takes us from phosphate mines in Idaho to corn fields in Iowa, from gypsum mines in Oklahoma to oil fields in China, to demystify some of America’s most common processed food ingredientsâ€"where they come from, how they are made, how they are usedâ€"and why. Beginning at the source (hint: they’re often more closely linked to rocks and petroleum than any of the four food groups), Ettlinger reveals how each Twinkie ingredient goes through the process of being crushed, baked, fermented, refined, and/or reacted into a totally unrecognizable goo or powder with a strange nameâ€"all for the sake of creating a simple snack cake.

An insightful, entertaining exploration of modern food industry, if you’ve ever wondered what you’re eating when you consume foods containing mono and diglycerides or calcium sulfate (the latter, a food-grade equivalent of plaster of Paris), this book is for you.

Purchase: http://www.amazon.com/exec/obidos/ASIN/1594630186/interactiveda872-20

A blurb from one of the reviews:

Quote
Five ingredients come from rocks.

This got my attention. However, it only got worse when I discovered that the ingredients come from phosphate mines in Idaho, gypsum mines in Oklahoma, and oil fields in China.

The Twinkie, which was created during the Depression, contains thirty-nine ingredients. One of those ingredients is a preservative, sorbic acid. Sorbic acid is an ingredient I see on many packages, and I have never thought twice about it. But author Steve Ettlinger did. He found that sorbic acid is actually derived from natural gas.

If that isn’t shocking enough, he goes on to talk about other ingredients like cellulose gum, Polysorbate 60, and calcium sulfate. Apparently, these ingredients are also used in sheet rock, shampoo, and rocket fuel. No wonder Twinkies make kids run around like crazy and have even been used as a defense for murder!

Mr Ettlinger also found that the vitamins, artificial colors, and flavorings in Twinkies come from petroleum.

I started to wonder how this tasty treat made from gas and rocks can be so light and airy. In comes Mr. Ettlinger again. Apparently, it’s limestone that makes Twinkies light.

But the Twinkies already made will last for eons, so if the White Knight comes along fairly soon there should be no disruption in supply.

Quote from: stephendare on November 16, 2012, 11:48:46 AM

Quote from: Dog Walker on November 16, 2012, 11:43:10 AM
Who in the world eats that crap anyway?  No taste but sweet fat.  Good riddance!

its made with bleached, sugared suet as the creme filling.  Ever heard of suet?  Wonder why they don't spell it 'cream'?

http://en.wikipedia.org/wiki/Suet

(http://upload.wikimedia.org/wikipedia/commons/c/c6/Beef_suet-01.jpg)

Good God, man. What IS that???  :o

Quote from: stephendare on November 16, 2012, 11:53:10 AM
(http://unrealnature.files.wordpress.com/2009/11/twinkie01.jpg)

That is hilarious.

Fine art.

still loling

A buyer for Hostess?  Perhaps.

http://www.bloomberg.com/news/2012-11-16/pabst-owner-metropoulos-is-considering-bid-for-hostess-brands.html



Diane M.

I'd say a buyer is a foregone conclusion. There is value in the brand if not in the company. The only issue is price.

Hostess will live on in some form or fashion.  Its a matter of time.    This is very sad news for many whose livelihood depended on the company.    Probably one of many yet to fall.

www.theonion.com/articles/laidoff-hostess-employee-forced-to-look-for-cremei,30425/

(http://sphotos-a.xx.fbcdn.net/hphotos-ash4/402394_391482537600650_658950094_n.jpg)

What a touching picture... God I'm going to miss them.   :-\

I know that alot of the reason for Hostess demise was union related, but IMO Hostess was very complacent in this dog eat dog world. Lets face it, when it comes to snack cakes, Lil' Debbie and Tastykake kick the crap outta Hostess. Hell, even generic brands like Wal Mart's Great Value is more creative. Hostess seemed satisfied with it's baby boomer era nostalgic foods, while other bakeries were constantly being unique adding new tasty treats, and blowing them outta the water.

Nearly all of the Hostess snacks are already replaced by other companies' similar snacks.

Twinkie = Lil Debbie Cloud Cake
Ho Ho= Lil Debbie Swiss Roll
Zinger= Tastykake Krimpets
Wonder Bread, and Mini donuts are basically commonplace with nothing making them taste 'unique'.

IMO the relatively new Lil Debbie's Cherry Cordials, Cinnamon Rolls with icing, and Tastykake's Smores Bars are very good; I'll put those up to anything that Hostess has. That being said, a few days ago, I got a couple boxes of Twinkies, and a box of cupcakes for old time sake. 

I generally agree with you on this I-10 East, though losing Hostess is a crime, losing Little Debbie would be a national catastrophe.

I've never had a twinkie in my life.  Even as a kid, they never looked appealing to me. I'm more interested in the future of Hostess' Jacksonville bakery, which has been in continuous operation for nearly a century.  I'm hoping that whoever purchases the company's assets will decide to keep it running.

Per the Chicago Tribune:

The last shipment of Hostess products from a Georgia bakery were shipped to Chicago based Jewel stores to meet overwhelming demand. Demand so great, the store chain even posted the list of stores that would get them on their Facebook page.

http://www.chicagotribune.com/business/breaking/chi-jewel-says-it-has-last-shipment-of-twinkies-20121211,0,2047216.story (http://www.chicagotribune.com/business/breaking/chi-jewel-says-it-has-last-shipment-of-twinkies-20121211,0,2047216.story)

(http://www.trbimg.com/img-50c729fc/turbine/chi-jewel-says-it-has-last-shipment-of-twinkie-001/187/16x9)

Jewel-Osco said it is getting what it believes is the final shipment of Twinkies in the country, with more than 25,000 boxes of Hostess products available Tuesday morning in stores.

The company says its shipment includes 20,000 boxes of Twinkies and 5,000 boxes of Ding Dongs, Zingers and Orange Cupcakes.

"We received a call from our Hostess rep saying that one of the plants in Georgia had some left and would we want any," said Mike Siemenas, a spokesman for Jewel parent Supervalu. "We said we'd take the entire shipment."

Jewel is selling the Hostess products will be sold at regular price, with no limits, while supplies last. And that may not be long, based activity early Tuesday.

At the Jewel store at 4660 W. Irving Park, at least 10 customers waiting to snag some at just after 7 a.m. It was out of Twinkies shortly after.

Siemenas said the chain has been selling out of Twinkies within an hour of opening. Stores have been flagging calls from customers seeking more information since Jewel posted news of the shipment on its Facebook page.

Typical post Regan capitalism 2005 execs misreported earnings sold their stock for a bundle. Weeks later they said it was an accounting error and asked the workers to take a pay cut and the workers did.  More years more pay cuts and the executives get more bonuses and even use the workers pensions to pay themselves. When the some of the workers  only one of the smaller unions involved finally give a little push back they immediately declare bankruptcy and give the executives one more bonus on the way out.  This is the Bain model load the company with debt to pay the execs file bankruptcy and use the money you made to do it again to another company.

Apollo Cashes In After Ripping Off Workers

Apollo Global Management LLC (APO), the buyout fund led by billionaire Leon Black, is planning to take a dividend from Hostess Brands Inc. after buying the maker of Coffee Cakes and Twinkies out of bankruptcy 14 months ago.

Apollo and co-owner C. Dean Metropoulos & Co. are seeking $175 million from Hostess, according to a statement from Standard & Poor's. The payout won't affect the company's rating of B- and will leave it with $40 million in cash and $60 million in available credit.

The buyout funds bought the Kansas City, Missouri-based baker in March 2013 for $410 million. C. Dean Metropoulos leads the bakery after turning around struggling brands such as Chef Boyardee and Bumble Bee Tuna.

Charles Zehren, an Apollo spokesman at Rubenstein Associates, declined to comment on the deal. Hannah Arnold, a spokeswoman for Hostess at LAK Public Relations Inc., didn't immediately respond to requests seeking comment on the proposed dividend.

Since relaunching, Hostess has used less cash than S&P originally forecast and earnings before interest, depreciation and amortization have exceeded previous estimates, the credit rater said. S&P is maintaining its "highly leveraged" financial risk profile on Hostess because of its ownership by the private equity sponsors.

The company's brands include Ding Dongs, Suzy Q's and Sno Balls. It advertised its return to the market as "The Sweetest Comeback in the History of Ever."

A predecessor filed for bankruptcy in January 2012, less than three years after emerging from a previous period of court protection. The latest bankruptcy, which included other divisions in addition to the Hostess baked goods unit, came after a strike by bakers and left asset buyers free of union contracts and $1.3 billion in debt.

http://www.bloomberg.com/news/2014-05-15/apollo-taking-hostess-dividend-after-bankruptcy-exit.html

Boo hoo.  This was a leveraged (I think...Apollo is a large PE firm with debt) buyout by a private equity firm.  This is a surprise, how?  If Hostess workers are unionized, they had all of this knowledge up front and labor deals were struck before the deal was consummated.  Nobody is getting ripped off.  A PE firm has investors, usually PENSION FUNDS and even funds tied to UNIONS that may include Hostess employees in their membership.  Their cost of capital is not low because it's not debt/line of credit.  The investors must get paid, so why would low-wage, low-skilled employees of Hostess who sit in a factory and press buttons so machines can make fake cakes deserve all of the income?  Apollo's investors technically include union workers and teachers and blue collar workers who all have pensions.  Perhaps the Hostess workers, too.  Who knows?  Why are we sad?

This says it all:

QuoteThe payout won't affect the company's rating of B- and will leave it with $40 million in cash and $60 million in available credit.

Which means the ratings agency used (either Fitch or S&P in this case) expected this.  B- is not investment grade.  There is certainly a level of risk associated with this company and a reason why it's owned by a PE firm and not by shareholders with traditional debt any longer.

#F*****gcommieswhocan'tunderstandsimplefinance/capitalism

Quote from: simms3 on May 16, 2014, 05:27:08 PM
Why are we sad?

The better question is why are the private equity partners who are raking in hundreds of millions a year only taxed at 15 percent -- less than the tax rate paid by middle-class Americans?



#F*****dimbulbswhocan'tunderstandsimpletaxfairness/cronycapitalism

If you want to get into it, that's a vast oversimplification of the tax rate incurred by a private corporation.  A PE firm has capital gains, but also has operating income taxed at the corporate rate.  Two different tax rates.  Also, the money may have been invested as a fund of fund, in which case there is a middleman like a placement firm or advisor.  So PE firm pays advisor which pays out its pension fund investors.

Then it pays out its investors, which could include direct investors or advisors/placement agencies (Townsend being the largest pension fund advisor in the US).  These agencies serve as middlemen and are there to safeguard the investment needs of various pension funds for teachers, firefighters, transit workers, policemen, service employees, construction workers, etc all of which are unionized like I'm assuming the Hostess workers are.  These middlemen pay taxes, mostly cap gains on payouts unless it's structured as operating, though I'm admittedly not the most familiar with their tax structures.

Then those middlemen, the advisors, pay out their investors, the pension funds for teachers and policemen and firefighters.  Those pension funds then pay taxes, and you can do your own research on the rates, typically cap gains.

Then it (the PE firm) pays its employees.  Some of the employees at the top know how to plan out their taxes better than the average American, and so while they make a lot more than most of their employees (obviously) and most Americans (obviously), they pay lower taxes, and so why am I going to get my panties in a wad over their personal business?

Then those investors, the pension funds, pay out pensions to former employees/teachers/etc.  Those middle class Americans then pay taxes on what they receive as pension income.  You can research or possibly speak from experience on what rate you pay there.

Of the $175MM payout to Apollo and a partner, a very very small portion will go to the managing principals.  A similar amount will go to the large amount of employees at these firms that are managing the asset and ensuring the success of the investment for the firm's investors, these pension funds.

Then the vast bulk will go to investors, who also as I pointed out pay taxes before after several steps it gets into the hands of the actual individual middle class people.  Not nearly as efficient as stock investment, but this is how pension funds work.  Some of the investors are also high net worth individuals, and before they receive their pay out, their money has been taxed countless times, as well.

So if you are a middle class American OR an HNW investor in a PE firm, you've been taxed A LOT more than 15% by the time the money gets to you.  I don't presume to judge what's fair or not, but this is the reality of the system and of taxes.

If you want a more efficient (less tax overall though more at the personal level, and fewer fees), but MUCH higher risk, then you'll do your own investing.  You won't rely on a union or pension fund, and quite frankly you won't max out your 401K limit, but rather do your own placement carefully treading water to avoid trading fees.  If you have the time and risk aversion to sweat that out, then you can avoid all of this.  But if you're like millions of Americans and would rather not worry as much about personal finances and put it in someone else's hands to manage, then don't blame the PE firms' individual principals for YOUR higher tax rate.  WTF

Finehoe, in the article you use as basis where does it say anything about employee treatment? All this is Apollo being rewarded for good stewardship. They used less cash and had better EBITDA than S&P anticipated. This is normal business, nothing out of the ordinary. And in reality, every business that buys another does this just at different scales.

Quote from: JayBird on May 16, 2014, 10:33:11 PM
Finehoe, in the article you use as basis where does it say anything about employee treatment? All this is Apollo being rewarded for good stewardship. They used less cash and had better EBITDA than S&P anticipated. This is normal business, nothing out of the ordinary. And in reality, every business that buys another does this just at different scales.

That tends to happen when you cut pretty much every employee's salary at once, not exactly a stroke of financial genius. Where does everyone think these folks wind up, other than as the same "net takers" on social security, medicaid, etc., that the republicans constantly bitch about? And nobody sees cause and effect?

Quote from: ChriswUfGator on May 17, 2014, 01:56:29 PM

Quote from: JayBird on May 16, 2014, 10:33:11 PM
Finehoe, in the article you use as basis where does it say anything about employee treatment? All this is Apollo being rewarded for good stewardship. They used less cash and had better EBITDA than S&P anticipated. This is normal business, nothing out of the ordinary. And in reality, every business that buys another does this just at different scales.

That tends to happen when you cut pretty much every employee's salary at once, not exactly a stroke of financial genius. Where does everyone think these folks wind up, other than as the same "net takers" on social security, medicaid, etc., that the republicans constantly bitch about? And nobody sees cause and effect?

Isn't Apollo the company that bought Hostess after the original owner declared bankruptcy and shut the company down?

Quote from: Apache on May 17, 2014, 03:39:49 PM

Quote from: ChriswUfGator on May 17, 2014, 01:56:29 PM

Quote from: JayBird on May 16, 2014, 10:33:11 PM
Finehoe, in the article you use as basis where does it say anything about employee treatment? All this is Apollo being rewarded for good stewardship. They used less cash and had better EBITDA than S&P anticipated. This is normal business, nothing out of the ordinary. And in reality, every business that buys another does this just at different scales.

That tends to happen when you cut pretty much every employee's salary at once, not exactly a stroke of financial genius. Where does everyone think these folks wind up, other than as the same "net takers" on social security, medicaid, etc., that the republicans constantly bitch about? And nobody sees cause and effect?

Catch 22 no? If you buy a business out of bankruptcy then obviously you have to do what the previous owners couldn't or wouldn't, cuts costs and/or increase sales or what is the point. You either have a bankrupt company with ALL their former employees out of a job or a combination of some employees out of a job and some with lower wages.

Would those employees say they are at least happy to have a paying job? Who knows.

Salaries cut??? The ones whom were re-hired got raises (though only 3-5%), as a thank you for returning and rebuilding. Granted not all were re-hired, but like Apache said the previous owners went bankrupt! I understand that most on here are anti-corporate America, but I just don't understand how they're the bad guys. This is actually what all buyout companies should be doing.