How cool to be part of a managment team that drives a company into bankruptcy! You get to participate in a $1.8 million bonus package while the workers who had previously given up wages and pension benefits go home with zip.
This is the face of vulture capitalism in the US…. buy a company, load it up with debt, force the workers to accept lower wages, loot the pension plan, try to force the workers to accept even LOWER wages & benefits, declare bankruptcy, pocket the profits, and… well… moon the poor workers and the communities dependent on the company.
Last week, as part of a plan to liquidate the company and lay off 18,000 workers, a federal judge in White Plains, N.Y., approved paying 19 Hostess executives bonuses totaling $1.8 million. Hostess has said it has interest from at least 110 firms who want to buy pieces of the operation.
As we reported about the Hostess liquidation previously, it appears that the fix was in. The private equity fund that bought the brand and demanded concessions in exchange for increase investment in factories reneged on its end of the deal. The workers gave up a lot. The new owners pocketed the profits, secure in the knowledge that multiple new owners waited in the wings.
After shedding pesky employees and walking away from almost a billion dollars in pension obligations, Hostess' owners plan to sell the brands off, cake by cake, to other vulture capitalists:
Pabst Brewing Co. owner C. Dean Metropoulos & Co. is considering an offer to buy Hostess Brands Inc., which said today it plans to liquidate its business.
“Our family would love to purchase these iconic brands,” Daren Metropoulos, a principal at the private-equity firm, said today in an e-mail. “We have analyzed this opportunity very carefully for a few years now. Shedding the complications of the unions and old plants makes it even more attractive.”
Yep… analyzed the “opportunity” for “a few years.” The fix was in and now all that remains are worker pink slips and owner profits.
The private equity firm's making big bucks. The management that drove the company into bankruptcy is getting bonuses. Companies hoping to pick the bones clean and pick up product lines on the cheap are waiting in the wings – like vultures hovering hopefully over a battlefield.
But the workers? They gave up wages, their pension fund money was spent (and not by them), and now they're out of a job.
Just wait for the right wing to play the scary music and blame the unions. When in truth, this was just the outcome the owners hoped for.