“Passion and prejudice govern the world; only under the name of reason” --John Wesley
Sunday, November 25, 2012
How to spot a blame the union meme
The company had known for a decade or more that its market was changing, but had done nothing to modernize its product line or distribution system. Its trucks were breaking down. It was keeping unprofitable stores open and having trouble figuring out how to move inventory to customers and when. It had cut back advertising and marketing to the point where it was barely communicating with customers. It had gotten hundreds of millions of dollars in concessions from its unions, and spent none of it on these essential improvements.
The true recent history of Hostess can be excavated from piles of public filings from its two bankruptcy cases. To start with, the company has had six CEOs in the last 10 years, which is not exactly a precondition for consistent and effective corporate strategizing.
The most recent and presumably final incumbent, Gregory Rayburn, had been with the company all of nine days before taking over in March when Driscoll, who earlier had been described in court papers as "key to … the future well-being" of the company, departed suddenly and without explanation.
Hostess first entered bankruptcy in 2004, when it was known as Interstate Bakeries. During its five years in Chapter 11, the firm obtained concessions from its unions worth $110 million a year. The unions accepted layoffs that brought the workforce down to about 19,000 from more than 30,000. There were cuts in wages, pension and health benefits. The Teamsters committed to negotiations over changes in antiquated work rules. The givebacks helped reduce Hostess' labor costs to the point where they were roughly equal to or even lower than some of its major competitors'.
But the firm emerged from bankruptcy with more debt than when it went in — in with $575 million, out with $774 million, all secured by company assets. That's pretty much the opposite of what's supposed to happen in bankruptcy. By the end, there was barely a spare distributor cap in the motor pool that wasn't mortgaged to the private equity firms and hedge funds holding the notes (and also appointing management).
As management experts such as Peter Drucker have observed, the goal of a successful business must be to find and serve customers. Do that, and the numbers take care of themselves. The Hostess approach was entirely backward — meeting the numbers became Job One, and figuring out how to grow the business became Job None.
The post-bankruptcy leadership never executed a growth strategy. It failed to introduce a significant new product or acquire a single new brand. It lagged on bakery automation and product R&D, while rivals such as Bimbo Bakeries USA built research facilities and hired food scientists to keep their product lines fresh. At the time of the 2004 bankruptcy, Hostess was three times the size of Bimbo. Today it's less than half Bimbo's size. (Bimbo, which has been acquiring bakeries such as Sara Lee and Entenmann's right and left, might well end up with Hostess' brands.)
Saturday, November 24, 2012
What Occupy Wall Street did in real time @ForRespect is going to do for real lives.
Wednesday, November 7, 2012
Georgia Senate District 17 Candidate "Party-Switcher" for more bigoted climates...
Dr. Nelva Lee Switches Party
First, let me say a hearty thanks to all of my supporters. Those who prayed for me, volunteered, and donated to my campaign, thank you!
While this was my first campaign for elected office, I have been a political junky all of my life and have known that I would run for office someday as I believe that political service is my life’s purpose. I ran as a conservative democrat because that is what I have always considered myself. I was disappointed when conservative democrats became a dying breed in Washington and even in Georgia. However, since the primaries, the Democratic platform has become even more liberal, embracing views that are different than my conservative values of pro-Life and anti-gay marriage. So it is with a heavy heart that I leave the Democratic Party for the Republican effective today.
I want to also take the time to congratulate my opponent Rick Jeffares on his win, and to inform him that he will most likely see me again as his challenger in the 2014 Primaries. I am encouraged in this endeavor by many republicans who wished to see me run as a Republican in this past race and who pledged their support if I chose to run again on the Republican ticket.
Georgia Senate District 17 Candidate "Party-Switcher" for more bigoted climates...
Dr. Nelva Lee Switches Party
First, let me say a hearty thanks to all of my supporters. Those who prayed for me, volunteered, and donated to my campaign, thank you!
While this was my first campaign for elected office, I have been a political junky all of my life and have known that I would run for office someday as I believe that political service is my life’s purpose. I ran as a conservative democrat because that is what I have always considered myself. I was disappointed when conservative democrats became a dying breed in Washington and even in Georgia. However, since the primaries, the Democratic platform has become even more liberal, embracing views that are different than my conservative values of pro-Life and anti-gay marriage. So it is with a heavy heart that I leave the Democratic Party for the Republican effective today.
I want to also take the time to congratulate my opponent Rick Jeffares on his win, and to inform him that he will most likely see me again as his challenger in the 2014 Primaries. I am encouraged in this endeavor by many republicans who wished to see me run as a Republican in this past race and who pledged their support if I chose to run again on the Republican ticket.
Sunday, November 4, 2012
The radical Left-wing rag The Financial Times-- endorses Obama
As in his response to Hurricane Sandy, Mr Obama has shown that purposeful government can be part of the solution rather than the problem. Four years on from the financial crisis, with extreme inequality an affront to the American dream, there remains a need for intelligent, reformist governance. Mr Obama, his presidency defined by the economic crisis, looks the better choice.