Monday, May 25, 2015

Hostess's Revival: What Can Happen When You're Allowed to Start Fresh

Given how much wailing and gnashing of teeth there was in the press when the old Hostess liquidated in 2012, a mid-April story at Forbes has gotten surprising little attention. Well, maybe it's not that much of a surprise, for reasons which will be indentified here. 

Readers may recall that the final straw in that drama occurred late that year when the the AFL-CIO-affiliated Bakery, Confectionery, Tobacco Workers union called a strike after rejecting management clearly communicated final offer. The company, already in bankruptcy, was through negotiating, and chose to liquidate. The press moaned about how all of this meant the end of an era. Steven Bertoni's Forbes writeup shows how wrong they were, and what a business can accomplish when it's not saddled with legacy costs and constraints. 

Because it received no national press coverage despite affecting workers in 48 states, very few people know that the Department of Labor decided after Hostess's implosion that the company's 18,000 affected workers would be eligible for Trade Adjustment Assistance. 

That's supposed to happen when workers lose their jobs because of imports, not because they walked away from their jobs and took their employer down with them. At the time, I estimated the taxpayer costs involved at about $800 million. A February 2012 Investor's Business Daily editorial accurately described the government's decision as "a reward for those who refuse to negotiate, and a sop to the manipulative unions that are most adept at gaming the system. ... It's corruption." - 

Bertoni's Forbes article describes the "Twinkies Miracle Comeback." Readers here really need to, well, digest the whole thing, but here are several key paragraphs (bolds are mine):
Twinkie's Miracle Comeback: The Untold, Inside Story of a $2 Billion Feast
... The new factory (in Lenexa, Kansas) is bright and clean. Tight rows of Twinkies march along the $20 million Auto Bake system with the precision of Soviet soldiers in a May Day parade. Yellow robotic arms, which look like they should be welding Teslas rather than boxing Twinkies, stack snacks with hypnotic rhythm. This 500-person plant produces more than 1 million Twinkies a day, 400 million a year. That’s 80% of Hostess’ total output–output that under the old regime required 14 plants and 9,000 employees. And it’s about to get more efficient: Metropoulos and Jhawar just installed a second Auto–Bake system, this one for Cup Cakes ...
In truth, it’s more a resurrection of an American icon ... Hostess’ closing was a cultural moment across the U.S., offering proof of the dire state of American manufacturing. After over a decade of failing health that saw two bankruptcies and five different CEOs, Hostess finally died on Nov. 16, 2012 after the baker’s union pulled the plug with an ill-conceived nationwide strike. Hostess’ roots went back more than 150 years. It left behind 36 factories, 5,600 delivery routes and 19,000 jobs, creating something of a national mourning, not just for the brands but also for what the demise seemed to say about the country itself.
... How they’d do it? Cherry–picking top assets, modernizing manufacturing and distribution, doubling the shelf life of products and capitalizing on the rare place in pop culture Hostess products still held. “People walk up and thank me for bringing back Twinkies,” says ("Junk Food Billionaire" Dean) Metropoulos, who has previously rebuilt brands like Bumble Bee Tuna, Chef Boyardee and Pabst Blue Ribbon. “No one ever thanked me for saving Vlasic pickles.”
... (In 2012) With the unions myopically unwilling to make concessions necessary to make Hostess viable, the debt–holders shuttered it, engendering those “end of an era” editorials nationwide.
... the liquidation had washed away everything. Yes, the company was gone, but so were the pension costs, the union contracts and the debt. It also unbundled the brands, allowing investors to carve out the best businesses. “
We didn’t have to take on the factories or the routes,” says Metropoulos. “We didn’t have to take all the historical drags on the company.”
Metropoulos and Jhawar targeted the cake business: It had the best recognized brands (Ding Dongs, Ho-Hos and Zingers, in addition to Twinkies and CupCakes) and the longest shelf life.
... Metropoulos spent millions on R&D, working with food lab Corbion to tweak the formula of starches, oils and gums in Twinkies, finally arriving at an acidity level that would prevent staleness and discoloration. The singular goal: Make the Twinkie warehouse-friendly. And while none of this will make Alice Waters’ heart flutter, the team succeeded in making the indestructible snack even more so–it’s (sic) shelf life was more than doubled, to 65 days. Hostess switched to a warehouse system. Delivery costs dropped to 16% from 36% of revenue, and Hostess’ retail reach expanded greatly.
... In July of 2013–less than four months after Metropoulos and Apollo took over operations–the Twinkie was back.
... Fans flocked to stores. Demand was so high that large retailers waived the slotting fees they usually charge brands for shelf space. The Metropoulos and Apollo business plan had predicted $100 million worth of Ebitda (Earnings Before Interest, Taxes, Depreciation and Amortization — Ed.) for 2014–instead they hit $178 million. Those numbers make Hostess’ $410 million price tag look dirt cheap ... “What they’ve done at Hostess should be a Harvard Business School case study on how to turn around a business,” says (Joseph) Gatto, the Perella (Weinberg) banker.
It also should be a far more visible story in the nation's press. But it isn't. Why is that?
Perhaps because the new Hostess's runaway success demonstrates what could have been accomplished if two other companies in a heavily unionized industry had been allowed to go through legitimate bankruptcies in 2009.
Instead, General Motors and Chrysler went through sham "bankruptcies" where the government deliberately picked winners and screwed the losers, blatantly violating centuries of common law and contract law in the process. It was then when columnist Michael Barone coined the simultaneously appropriate and prescient term "Gangster Government."
How much more efficient, productive, and value-adding could the entire auto industry be right now if managers as smart in their line of work as Dean Metropoulos is in his had been allowed to pick up the pieces of GM and Chrysler and assemble new car business dynamos like the new Hostess, and if other competitors had then been forced to adapt to the new reality?
Sadly, we'll never know — and all except those who were favored are poorer for it.
Via: Newsbusters
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Chris Matthews Defending Hillary: FDR Was 'Secretive' and Turned Out Best President of 20th Century

Read more at NewsBusters | Wrapping up a segment dealing with fresh revelations from newly-released Hillary Clinton emails pertaining to  Benghazi, MSNBC Hardball host Chris Matthews on Thursday night dutifully spun that Hillary's "secretive" nature was not a drawback but may in fact be a net positive, comparing her to  "secretive" and "manipulative" FDR, who, in Matthews's estimation, was America's best president of the 20th century, if not the entire history of the Republic.

Via: CNS News
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Robert De Niro to NYU Grads: ‘You’re F*cked’

Robert De Niro opened his commencement speech to the graduates of New York University’s Tisch School of the Arts with a simple message: “Tisch graduates, you made it… and you’re fucked.”
In a brutally honest address, De Niro proceeded to tell the prospective artists and actors that unlike the graduates of the business or nursing schools, they face an uphill battle and almost certain unemployment.
“A new door is opening for you, a door to a lifetime of rejection. It’s inevitable,” the Oscar-winning actor said. “How do you cope with it? I hear that Valium and Vicodin work.”
The New York Daily News tracked down a handful of students who seemed to appreciate De Niro’s blunt talk, but also found one parent who said, “You don’t really want to use the f-bomb in front of thousands of people. That’s just my take.”


Gov. Jerry Brown is calling for an amnesty program for poor California residents who cannot afford to pay debts accrued through traffic violations after a blistering report from a nonprofit law firm concluded that the state is profiting off of minorities and low-income residents.

According to the Associated Press, Brown’s plan would see fines issued for minor traffic violations cut in half, while the administrative fees associated with the fines would be dropped from $300 to $50. California has reportedly suspended roughly 4.8 million driver’s licenses since 2006 over failure to pay fines associated with traffic violations.
In an April report titled, “Not Just a Ferguson Problem: How Traffic Courts Drive Inequality in California,” the Western Center on Law and Poverty outlined the ways in which it claims the state’s traffic court system disproportionately affects low-income residents.
“Due to increased fines and fees and reduced access to courts, more than four million Californians have suspended driver’s licenses,” the report states. “These suspensions make it harder for people to get and keep jobs, harm credit ratings and raise public safety concerns. Ultimately they keep people in long cycles of poverty that are difficult if not impossible for many to overcome.”
“California has sadly become a pay-t0-play court system,” WCLP legislative advocate Michael Herald, who helped author the report, told the Associated Press.
According to the AP, the fine for a red-light violation is now a staggering $490, up from $103 twenty years ago. The added fees go toward supporting social services like court construction and medical services. And the hefty fines grow even larger when those ticketed fail to pay.
“The fines and assessments being collected by the courts have increasingly been used not as a penalty for the violation, but as a source of revenue to fund government operations, including the courts,” the WCLP report found.
“How do you expect to pay something when you have no job, and you can’t get a job without your license?” 31-year-old Oakland resident Michael Armas told the AP. Armas said that as a result of failing to pay for minor traffic violations like using a cellphone while driving and failing to properly display his license plate, his fines have reached a total of $4,500.
In a statement, Brown called the traffic court system a “hellhole of desperation” for California’s poor.
“It’s a hellhole of desperation and I think this amnesty can be a very good thing to both bring in money, to give people a chance to kind of pay at a discount,” Brown said.
In February, Sen. Bob Hertzberg (D-Van Nuys) introduced Senate Bill 405, which would allow those with suspended licenses to keep their driving privileges if they agreed to pay reduced fines determined on a sliding scale.
“The whole fee system is out of whack, and for poor people, you make a choice between feeding your family or paying your rent or paying for a $63 parking ticket that turns out to be $300 in 60 days,” Hertzberg told CBS Los Angeles’ KNX 1070 radio station last month.
Brown spokesman Evan Westrup told the AP that the governor’s administration and the Justice Department have held discussions about overhauling California’s traffic court system. It was not immediately clear whether the Justice Department had launched an official investigation into the courts.

Hillary’s Potential Running Mate Calls Email Inquiry A ‘Witch Hunt’ [VIDEO]

Julian Castro, the secretary of the Department of Housing and Urban Development whose name has been floated as a potential Hillary Clinton running mate, is calling the investigation into Clinton’s Benghazi-related emails a “witch hunt” and a “sideshow.”
“This thing has been studied to death by Republicans and Democrats,” Castro said of Benghazi during an interview Sunday on CNN’s “State of the Union.”
“Several committees including in Congress that have all said, ‘Yes, of course what happened was tragic, but Secretary Clinton was not in any way at fault,’ and what you have here with these emails is basically a witch hunt,” he added.
The State Department Friday released 296 emails Clinton turned over in December related to Libya and the Sept. 11, 2012, attack on the U.S. consulate in Benghazi. Clinton sent and received the emails on her personal account, which was maintained on a private server. The email set-up has raised questions over whether Clinton had tried to keep emails she sent as secretary of state secret.
Because of his age — 40 — and his Hispanic heritage, Castro, the former mayor of San Antonio, is considered to be an appealing vice presidential candidate on Clinton’s 2016 ticket. Though he denied Sunday that Clinton is considering him for the ticket, earlier this week, former HUD Sec. Henry Cisneros said that Castro was an early favorite.
In his interview, Castro defended Clinton further saying she has “already explained” her email set-up. He also said American voters don’t care “whether somebody had emails or didn’t have them.”
Castro also offered pointed remarks for Trey Gowdy, the South Carolina Republican leading the House Select Committee on Benghazi.
Gowdy “is very intentionally trying to manipulate this witch hunt to play politics,” Castro said.
Asked by CNN’s Jim Acosta whether he sends his government business-related emails on an official account, Castro said “that’s right.”

After Posts About Ice Cream, Barbecuing And Sales, Dems Finally Recognize Memorial Day…With Pic Of Barack Obama…

The Democrats have outdone themselves this time!!!

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Finally, today they got around to recognizing Memorial Day…with a pic of Barack Obama:
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Like The Night Follows The Day: Al Sharpton Going To Cleveland To Race Bait….

AL SHARPTON PRESS CONFERENCECLEVELAND -- Civil rights activist Rev. Al Sharpton is expected to appear at a local church in Cleveland next week.
According to Reverend Jawanza Colvin, he is scheduled to speak at Olivet Institutional Baptist Church.
Later this week, members of local churches plan to march to the Justice Center to call for comprehensive reform of the justice system. The march is scheduled to take place Tuesday at 11:30 a.m.
Leading up to the verdict in trial of Michael Brelo, Cleveland's faith based community called for peaceful demonstrations. One hour following the verdict in the Brelo trial, churches throughout the city opened their doors for prayer and conversation.

More than 20 members of the long running group "United Pastors in Mission" have signed on to provide safe zones across Northeast Ohio.

RELATED: Local pastors call for calm demonstrations to Brelo verdict
Majority of protests remained peaceful during the day, but in the evening, officials made arrests after protesters became violent towards citizens, Cleveland Police Chief Williams said in the news conference Sunday morning.

A total of 71 people were arrested, about 39 men, 16 women and some juveniles during demonstrations on Saturday. Williams said police recorded videos while making arrests and they will also review any video posted online to determine if those in custody face charges -- which range from felonious assault, aggravated rioting, and failure to disperse. Misdemeanors require charges filed within 24 hours, while felonies need a 36-hour deadline.

Cuyahoga County Commons Please Court Judge John O'Donnell found Brelo not guilty on the two counts of voluntary manslaughter in the deaths of Malissa Williams and Timothy Russell. In addition, he also found Brelo not guilty on both lesser counts of felonious assault, something he could also rule upon.

State Dept. Makes Curious Redaction in Hillary Email

Among the emails released by the State Department today was one sent by Hillary Clinton to Jake Sullivan on April 8, 2011. Clinton was forwarding a private intelligence report that Sidney Blumenthal had sent her with the subject line: "UK game playing; new rebel strategists; Egypt moves in."
Secretary Clinton 8x10 2400 1
In the State Department release today, Clinton responds with "FYI" and a sentence that is redacted. 
But the New York Times posted its versions of the emails earlier this week and the sentence is not redacted. In theTimes's version the redacted sentence reads: "FYI. The idea of using private security experts to arm the opposition should be considered." 
The redaction in the State Department version is labeled a "B5" Freedom of Information Act exception, which provides for a "deliberative privilege" in keeping the information from the public.
The obvious question: Why did the State Department redact that sentence?


Jake Tapper is one of the few national anchors that seems to play things close to the middle, and he’s also very respectful of the military. He’s spending this weekend tweeting tributes to individual military members who died in service to the country, but he interrupted that to criticize the Democrats’ official account:
I don’t think Jake Tapper understand that to Democrats, Obama having to eat ice cream in front of cameras is just as grave a sacrifice as any military member losing their lives. Poor guy.

Sunday, May 24, 2015

CHICAGO: THE WATCHDOGS: City Hall's $62 million blunder

Ending a costly court fight that City Hall blundered into, Mayor Rahm Emanuel’s administration has paid more than $62 million to settle a dispute with the private operators of four city-owned parking garages downtown, records show.
The payment last month ended City Hall’s long and unsuccessful legal fight against claims from investors in the four privately operated garages under Millennium Park and Grant Park.
The dispute dates back six years. That’s when aides to former Mayor Richard M. Daley mistakenly approved a parking garage in the new Aqua building at 225 N. Columbus Dr.
Under the 2006 privatization deal, the Daley administration received $563 million to lease the parking garages for 99 years. As part of the deal, the city wasn’t supposed to allow any new competitors in a vast area surrounding the garages.
But less than three years after the Chicago City Council approved the deal, the Daley administration allowed the Aqua garage to open to the public just a block from the nearest of the privatized lots.
Arguing that that violated their deal, the operators of the garages filed a claim against the city, asking for at least $200 million.
The case went to an independent arbitrator, who ruled in 2013 that the city had breached the contract and should pay $57.8 million in compensation to the parking garage investors.

The Rise of House Clinton

EDITOR’S NOTE: The following is Jonah Goldberg’s weekly “news”letter, the G-File. Subscribe here to get the G-File delivered to your inbox on Fridays. Dear Reader (including Josh Duggar who foolishly got a job at the Family Research Council rather than as a party planner on Jeffrey Epstein’s plane), Bill Clinton is the greatest gaslighter in modern American politics. 

This is from the Wikipedia entry on “Gaslighting”: Sociopaths frequently use gaslighting tactics. Sociopaths consistently transgress social mores, break laws, and exploit others, but typically, are also charming and convincing liars who consistently deny wrongdoing. Thus, some who have been victimized by sociopaths may doubt their perceptions. Some physically abusive spouses may gaslight their partners by flatly denying that they have been violent. Gaslighting describes a dynamic observed in some cases of marital infidelity: “Therapists may contribute to the victim’s distress through mislabeling the woman’s reactions. . . . 

The gaslighting behaviors of the husband provide a recipe for the so-called ’nervous breakdown’ for some women [and] suicide in some of the worst situations.” A truly sociopathic liar (though his sociopathologies hardly end there), Clinton has a gift for making other people feel like there is something wrong with them for objecting to his deceptions. At the outset of the 1990s, liberals had worked themselves into a moral panic about sexual harassment. If anything, it was a bigger obsession than the campus-rape panic we’ve been witnessing over the last few years (no doubt in part because there was more factual basis to the problem). Male politicians — Bob Packwood, John Tower, et al. 

— had their careers summarily ended because of their “womanizing” — a term popularized by Tower’s predations. (Ironically, the original meaning of the word was to “make effeminate,” i.e., to turn into a woman. Given the mainstreaming of sex-change surgery, maybe it’s time to rehabilitate the older definition?)

Via: NRO

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Obama Weekly Address MAY 23, 2015

  • In this week’s address, the President commemorated Memorial Day by paying tribute to the men and women in uniform who have given their lives in service to our country.
    The President will spend the first Memorial Day since the end of the war in Afghanistan at Arlington Cemetery, remembering the more than 2,200 American patriots who gave their lives in that conflict, as well as all of our fallen soldiers. The President asked that all Americans spend Monday honoring the memory and sacrifice of those heroes, and remain committed to the cause of freedom and the country for which they fought. 

Weekly Republican Address: Rep. Mac Thornberry (R-TX)

Delivering the Weekly Republican Address is Rep. Mac Thornberry (R-TX), Chairman of the House Armed Services Committee. Ahead of Memorial Day, Chairman Thornberry calls on President Obama to honor our troops by backing the National Defense Authorization Act, which the House passed last week. To all who serve or have served, and to their families, Happy Memorial …

Get Excited! Hillary's Announcing Her Candidacy For President.....AGAIN.

 Get Excited! Hillary's Announcing Her Candidacy For President.....AGAIN.
If you thought Hillary Rodham Clinton would accept the public's less than enthusiastic reaction to her presidential candidacy, you’d be wrong. She wants a do-over, and darn it, she’s getting one!
June 13th. It’ll totally be official then.
See, when she announced her candidacy with that YouTube video back in April, she was totally pulling America’s leg. 
Remember this? Just pretend it never happened. That's what the Demcrats are doing.
She didn’t mean it! (And by that I mean, she didn’t actually get the enthusiastic reaction that she was looking for, so she wants– no NEEDS– a fresh new start. She wants to blame the lack of enthusiasm on the fact that her campaign really didn't officially kick off. That Scooby trip? Are you kidding? She just did that out of the kindness of her heart! She's a giver, you guys. 
I don’t get it.
What makes her think that people are going to be excited and energetic the second time around? The excitement (if you can even call it that) when she first “announced” was completely manufactured. (Except for Lena Dunham’s. I’m pretty sure she really did want that Hillary tramp stamp.) Even “A-list” Democrats were all “meh” about her announcement.
But this time? Boy, this time, she’ll make darn sure she has some prescreened excited millennials gathered to support her.
She’s totally serious this time. She’s running for president. Do-over starts June 13th.
Thankfully, I wasn’t the only person confused by this turn of events.

New Orleans Cop Shot Dead in Cruiser

PHOTO: Caution tape marks of the scene after the body of a police officer for New Orleans public housing agency was found Sunday, May 24, 2015, in New Orleans.
A New Orleans police officer was found shot dead in his marked patrol car this morning, city officials said.
The shooting was reported around 7 a.m., the New Orleans Police Department said in a news release. The victim's car rolled forward and struck a curb after the shooting.
The officer's name has not been released, but the New Orleans police identified the victim as a 45-year-old man who worked as a Housing Authority police officer.
A Housing Authority of New Orleans (HANO) police officer "Investigates complaints, maintains order, aids individuals, and identifies criminal offenders," according to a summary of the position on The officers also perform "unplanned physical tasks which include the restraining of violent individuals, running, climbing fences and responding to EMS and rescue emergencies. Officers must handle gun belts," the summary said.
The officer had been a member of the HANO Police Department since 2013, according to the police press release. The police department declined to comment further.
New Orleans Mayor Mitch Landrieu said in a statement: "The death of this HANO police officer is an unspeakable tragedy, and a vile and cowardly act. Tragedies that involve our men and women in uniform affect our entire city and touch every member of our law enforcement community. We are deeply saddened by this loss, and our hearts and prayers are with the officer's friends and family and with the entire HANO family during this very difficult time.
"NOPD and HANO will work very closely to identify and arrest those responsible for this heinous assault. NOPD and HANO are part of the same close-knit law enforcement family that puts their lives on the line to protect and serve the people of New Orleans. Never are we more aware of the risk they face every day than we are on terrible days like this."
The New Orleans Police Department is investigating.

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