Saturday, November 17, 2012

Unpacking Fox's lies about Hostess

Billionaire Rupert Murdoch's Fox News predictably came out with a bunch of crap about the tragic Hostess liquidation.

Martha MacCallum, on "Today's Plutocrat Propaganda" "America's Newsroom," said Hostess is "blaming a worker's strike for crippling their ability to make and deliver their products."

Then Bill Hemmer blamed the job losses on "a labor dispute." He suggested the union put "18,000 jobs on the line." MacCallum said the employees were "paying dues to the union and then the union won't make a deal."

Our friends at Media Matters set the record straight. Here are some key points:
  • The problem was debt. Reuters (a real news outlet) reported Hostess' entered "First Bankruptcy With $648.5 Million In Debt, And Came Out With More Than $800 Million." Reuters reported that after Hostess filed for its first bankruptcy in 2004, "it did not deal with its debt"
  • Blame the lawyers, not the unions. Reuters also reported In its first bankruptcy, Hostess spent more than $170 million on professional fees in its first bankruptcy. That's because each time a company goes bankrupt, it must pay for lawyers and advisers not only for itself, but for its major creditors. 
  • Debt was the problem in the second bankruptcy: The New York Times' DealBook reported that Hostess had "more than $850 million of secured debt outstanding" as well as "$180 million in accrued workers compensation liabilities." The Times further reported that "[a]nother $50 million to $60 million is outstanding to trade creditors, plus $36 million in lease obligation" and that the company was "going to lay a $75 million debtor-in-possession loan on top of that." The Times added that "all this from a company with assets of just over $980 million."
  • Unions made concessions while executives looted the company:  Forbes explained that Hostess was able to exit bankruptcy in 2009 for three reasons, including that "substantial concessions" were made "by the two big unions" -- the Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union... and "thousands of union members lost their jobs."
  • The hacks running the company made out like -- well, you know: In April Hostess' creditors noted that Hostess had dramatically increased executive pay, including increasing CEO compensation from $750,000 to $2.25 million.
  • Management couldn't come up with new products: CNBC reported  "The company's sales declined and attempts to roll-out new products more in line with changing consumer tastes flopped."
There's way more. Like, Hostess' biggest (and successful) competitor, Bimbo Bakeries, pays drivers $400-a-week more than Hostess paid its drivers.

Read the whole thing here.