(11-17-2012, 02:35 AM)FireIceTalon Wrote: The CEO of Hostess makes 2.2 million a year (it was only 750,000 but he recently got a 300% pay increase, go figure), average Hostess worker makes 43,000 a year and wants to cut their salaries further but will be damned if he takes a cut himself.
Rats fleeting a sinking ship.
There was no chance to save the company. But apparently enough time to loot it before it went under the waves. Fair point that it's the executive, and not the workers, who get to do the looting. But it's not the difference between saving the company and not.
Quote:It is more profitable apparently for Hostess to close up shop then meet the workers demands, and many Wall Street hedge funders that have equity in Hostess have made millions in recent years through cutting workers pensions and salaires - this is fact.
Is it? How much would you have made holding Hostess stock through this whole process? I would have assumed you'd be wiped out. (And what would a hedge fund be doing buying Hostess?) Ripplewood stepped in and tried to pick it up at a bargain. They've gotten burned on this kind of thing before (Reader's Digest) and they got burned again. I have no sympathy for them, nor would I be looking for any. They're a risk business, and sometimes risks go bad. But if they hadn't stepped to buy before, those workers would have been laid off even earlier. You need both capital and labour to play the game of capitalism, and unless the workers were willing to risk *all* of their pension funds and just become the owners themselves, they're out of options. They can't coerce a capitalist to keep investing.
Quote:I wonder how much dough Hostess and their Wall Street shareholder goons are going to make giving 18k+ workers the hatchet then liquidating the companies assets. Should be some hefty little checks for the parasite class.
In liquidating a bakery company with nearly a billion in debt? This isn't Gordon Gekko, this isn't corporate raiding. They went bust. The only question remaining is who, among their creditors, loses the least. That's the story above about executive salaries - compensating themselves, because you can't legally claw back salaries, even once the place goes bankrupt. I'd like to see the pensions honoured, but I suspect there isn't even enough money to do that.
To be clear, I don't think the union is to blame here. I think any deal they might have agreed to would have been unacceptably bad. Sometimes, companies are just dead in the water. Bad decisions combined with declining demand and rising debt = going out of business.
-Jester