You are viewing the NationofChange archives. For the latest news and actions, visit the new www.NationofChange.org.
Saturday, December 20, 2014 / PROGRESSIVE JOURNALISM FOR POSITIVE ACTION
Get Email Updates | Log In | Register

Article image
Jim Hightower
NationofChange / Op-Ed
Published: Wednesday 28 November 2012
“Having long enjoyed the sweet life, the end was a bit bitter, for the dearly departed’s estate had been mercilessly plundered in recent years by unscrupulous money managers.”

A Death in the Family -- and the Question is: Whodunit?

Article image

Born in 1930 in Schiller Park, Ill., the deceased was 82 years old at the time of passing, which ironically was the day before Thanksgiving.

Having long enjoyed the sweet life, the end was a bit bitter, for the dearly departed's estate had been mercilessly plundered in recent years by unscrupulous money managers. This left 18,500 surviving family members in dire straits. Indeed, the family contends that the octogenarian's death was not due to natural causes, but to foul play — a case of corporate murder.

This is the drama behind the sudden death of Twinkies. Fondly remembered as "the cream puff of the proletariat" (and less fondly as a sugar-and-fat bomb that delivered a toothache in one bite and a heart attack in the next), this industrial concoction of 37 ingredients became, for better or worse, an icon of American food processing.

The father of the Twinkie was James Dewar, a baker at the old Continental Baking Co. who saw the goo-filled tube cake as a way to keep the factory's confection machinery busy after strawberry shortcake season ended. Yes, the Twinkie was actually conceived as "food" for idle machines. How fitting is that?

But us humans happily swallowed this extruded marvel of comestible engineering. As a teenager, I probably downed my weight in Twinkies each year — and my long years on this Earth might well be due to the heavy dose of preservatives, artificial flavors and other chemicals baked into every one of those cellophane-wrapped two-packs that I consumed.

The Twinkie was the best-seller of Hostess Brands, a conglomerate purveyor of some 30 nutritionally challenged (but moneymaking) brand-name food products, ranging from Wonder Bread to Ho Hos. In the past year, Hostess racked up $2.5 billion in sales — yet it suffered a staggering $1.1 billion in losses. Thus, on Nov. 21, Ripplewood Holdings, the private equity outfit that had taken over the conglomerate in 2009, pulled the plug, solemnly announcing that Hostess simply couldn't survive.

Why? Because it was burdened with overly generous labor contracts, the firm's executives declared, adding that greedy union officials refused to save the company by taking cuts.

Wait a minute. They claim that the bereaved loved ones of the Hostess family killed the Twinkie? Holy Agatha Christie, that can't be right.

Remember the horrible murders in 1978 of San Francisco Mayor George Moscone and Supervisor Harvey Milk? At the killer's trial, his lawyer argued for leniency on the grounds that his client subsisted on a steady diet of junk food, which had addled his brain. This claim entered the annals of American jurisprudence as the "Twinkie Defense."

Even less defensible is the campaign by Ripplewood financial manipulators to lay the death of Hostess at the feet of loyal, longtime employees who, after all, need the jobs. In fact, far from greedy, Hostess workers and their unions have been both modest and faithful. Their wages are decent but not at all excessive — only middle class. And the charge that unions would not make sacrifices to help the company is a flat-out lie, for they had previously given back $100 million in annual wages and benefits to help it survive.

The true perfidy in this drama is not in the union, but inside Ripplewood's towering castle of high finance in New York City. After buying Hostess in a bankruptcy sale, these equity hucksters proceeded to feather their own nests, rather than modernize Hostess's equipment and upgrade its products, as the unions had urged. For starters, these profiteers piled an unbearable debt load of $860 million on Hostess, thus diverting its revenues into nonproductive interest payments made to rich, absentee speculators. Also, they siphoned millions of dollars out of Hostess directly into their corporate pockets by charging "consulting and management fees" that did nothing to improve the snack-makers financial health.

But it was not until this year that their rank managerial incompetence and raw ethical depravity fully surfaced. While the Ripplewood honchos in charge of Hostess were demanding a new round of deep cuts in worker's pay, health care, and pensions, they quietly jacked up their own pay. By a lot! The CEO's paycheck, for example, rocketed from $750,000 a year to $2.5 million.

Like a character in a bad Agatha Christie whodunit, Ripplewood — the one so insistently pointing the finger of blame at others — turns out to be the one who killed the Twinkie. Along with the livelihoods of 18,500 workers.

Copyright Creators.com


Author pic
ABOUT Jim Hightower
National radio commentator, writer, public speaker, and author of the book, Swim Against The Current: Even A Dead Fish Can Go With The Flow, Jim Hightower has spent three decades battling the Powers That Be on behalf of the Powers That Ought To Be - consumers, working families, environmentalists, small businesses, and just-plain-folks.

It is the age-old corporate

It is the age-old corporate "golden rule!" Those with "the gold," rule!! If a company has some "gold" in its coffers, the vultures...er vulture capitalists, can smell it like dead carrion,a 1000 miles away!

And the cretins who drove

And the cretins who drove Twinkie, Suzy Q, and Sno-Ball to a premature death will no doubt be going "Ho-Ho" this holiday season with their looted cream filling.
Then they will be hired to run another company into the ground because we only hire the "best and brightest." It's a "Wonder" the bread these dudes make. On a side note: they may starve down South without the "deep-fried Twinkie." Or worse: they might live longer.

Too funny and very witty!!

Too funny and very witty!!

From anither story ....the

From anither story ....the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.

This is what the froth

This is what the froth mouthed union haters don't see. Before 2009, Hostess was doing fine. Investment bankers take over, and 3 years later, it's bankrupt?

Thanks for the outlining of what really happened.

. . . . HOSTESS . . . . as

. . . . HOSTESS . . . .
as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.
.. Thet succeded in putting the company out of business.... management got raises that lasted ??? how long???
What surprises me is that the courts allowed it...even required mitigation (playing their part in the sham)
The UNION lost ?? a $25,000.00 year job is far easier to replace than the $2,500.000.00 a year job.....economic suicide...and it I do not see whom is benefited by it... the workers lost - - management lost and the government lost tax revenues...all losers
AND THE REPUBLICANS ARE THE BIG LOSERS.........excluded...from the "we are all in this together" political gain ?? not likely - - - leaving a bad taste in everyones mouth....Christmas is coming - a present of unemployment -

The top managers didn't lose

The top managers didn't lose if they took home enough money in raises to walk away and not look back. Their silence was purchased handsomely.

. . . . . . . . . . .

. . . . . . . . . . .

OK,,OK.....I,M SORRY BUT I

OK,,OK.....I,M SORRY BUT I DON'T SEE ANY DIFFERENCE BETWEEN HOSTESS AN THE U.S. OF A. IN REGARDS TO THE CROOKS STEALING THE WORKERS BLIND....

Thanks, Jim. Great

Thanks, Jim. Great article!

The election this year was excruciating, saved only by the outcome. As much as I want to forget the lies and spin and spew, I have to look back and say a big "THANK YOU!" to Mitt Romney. A story like yours reminds me how Willard inadvertently provided the education I needed to understand just how Private Equity REALLY works, to pad the offshore accounts of a few greedy and destructive SOB's.

Now if we could just figure out how to get Congress to clean this up (while also cleaning up their own act)...

"For starters, these

"For starters, these profiteers piled an unbearable debt load of $860 million on Hostess, thus diverting its revenues into nonproductive interest payments made to rich, absentee speculators."

Not only "starters" but the "ender" too. There's a reason Usury used to entitle one to an excruciating death by fire tied to a stake...

Now greed and usury are the "economy"...especially in capitalist friendly USAmerica...

I had an interesting

I had an interesting conversation at work, (just before I got laid off for the holiday season), about this very issue and my co-workers regurgitated the company (that would be Ripplewood) line about stupid greedy unions and their equally stupid rank and file that drove Hostess into dissolution. Killed the golden goose with their indefensible stupidity and greed. I guess we know who has clout with the media and it's not the unions. I think they need to make more of an effort toward completing the narrative of situations like Hostess. It is too reminiscent of John Kerry trying to ignore the swifties to death. When mooks like Ripplewood go to the press, unions need to respond with a vigorous defense.

But Jim, this is what Mitty

But Jim, this is what Mitty said made him extra-qualified to be President, so it's got to be good, right?

Thank you for reporting on

Thank you for reporting on this behind the scenes story, one that doesn't ever make into the so-called 'liberal' press.

The vulture capitalists are

The vulture capitalists are "Takers", NOT Makers.

This has been the MO for

This has been the MO for quite some time for looting corporations by criminal finance. Should be called the Romney Rambler

Hey, this is the Romney Model

Hey, this is the Romney Model takeover, right? And it worked. Destroyed the Union, made the managers rich, made the Top managers and the venture capitalists really really rich, and dumped the losses on the tax payer. Huh? How did the taxpayer get hammered in this little kabuki dance? Well, there is the matter of the pension plan that was negotiated by the company and unions. Guess who picks up the tab for that? You got it. We the dumb fool taxpayers.
The Romney Business Model is a simple two step process;
Step 1. Privatize the profits
Step 2. Socialize the losses.
Mission accomplished again.

This has been the vulture

This has been the vulture capitalist's M.O. for years now, and as simple and transparent as it is, they still get away with it. It wouldn't take a Philadelphia lawyer to figure out how to make this type of transaction illegal; start with the effect on the Pension Guarantee Trust; but it may take an act of God to get it through Congress.

Comment with your Facebook account



Comment with your Disqus account

Top Stories

comments powered by Disqus

NationofChange works to educate, inform, and fight power with people, corruption with community.

If you would like to stay up to date with the best in independent, filter-free journalism, updates on upcoming events to attend, and more, enter your email below:

7 Compelling Reasons Why You Should Support NationofChange

Our readers often tell us why they’ve decided to step up and become supporters. Here are some of the top reasons people are giving.

1. You’re keeping independent journalism alive
The corporate owned media has proven that it can’t be trusted. In a media landscape wrought with spin and corruption, NationofChange stands in very scarce company.

2. You’re sticking it to the rich, powerful, and corrupt
When you have money in this country you can get away with damn near anything, and they do. NationofChange isn’t afraid to expose these criminals no matter how powerful they are.

3. Your donation is 100% tax-deductible
NationofChange is a 501(c)3 charity. People tend to assume that many other organizations are (most nonprofits are NOT) but it’s that 501(c)3 status is a bit more rare than you think.

Read the rest...