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Hostess Brands CEO Gregory Rayburn on the company’s efforts to cut costs to exit bankruptcy.
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Take care of Wonder Bread and Ding Dong is getting -- by -- union costs and a host of other things hostesses -- to say it.
A lot of red -- negotiating new labor contracts that would save the company hundreds of millions of dollars.
Analysis CEO Gregory -- is here to update us on know whether that doesn't triples company into bankruptcy what do you think right.
I think you're well I mean I think that we've made substantial progress in the past week.
As.
Last week we had an agreement with the Teamsters.
That that they would put it up for vote and let their members vote on a package of concessions.
We.
On Tuesday reach an agreement with the bakers union for those are two largest by far.
And they will put up for vote let the employees those are really rests in the employees' hands.
The concessions are.
-- their tough.
So why do you say as you know that you're putting it all on them and it it was bad management bad decisions bad timing bad execution.
The did it and health conscious society that sealed.
The okay all of all I can Parse that if you want you know the last four are really don't buy write him in the health conscious stuff I mean it would we wouldn't have chocolate companies if if you know who would sell make chocolate if that was an issue right and -- -- I don't think that's been a huge issue for for hostess we sell.
Millions of twinkies Ding Dong -- every day.
Your biggest seller among that group gosh.
You know -- you almost have to look at geography right so we have -- cakes in the northeast and Dolly Madison other places so you know I think GAAP.
I think try to doing guns are -- staple twinkies could be yet what scares and -- twinkies benefits you.
How long has it been around -- when I open a pack of twinkies I suspect it's passable.
We've been around decades.
Not that particular one -- -- ha ha but.
But I have a long stuff they do they do but not as you know not as -- -- people think actually so that's that's one reason that we have a good thrift store business.
But I ask your question about cost you know -- -- blame.
I think in this case and I've done this -- point nine years tried to return reward for companies everybody shares in the blame in this deal that there's no one person can point and another person say this was view this as you.
So you -- -- but let you know a series of of events.
And over -- company.
Company you know anytime a company doesn't invest in itself.
And doesn't get into a structure where they can do that they're gonna have a problem.
And you know so but we -- It -- -- get these concessions are you workers and obviously you -- the signal we to do this Oregon right so obviously they don't wanna be done.
So they make the concessions.
Normal what I see -- don't lot of companies when this happens and they date they need an agreement and move on is they're -- happy moving C don't have a great.
Jazz workforce and what do you do I think it's I think that's a real.
That's a real issue here in particular because hostess was bankrupt before.
-- so so if you look at this.
You what you're asking these employees to -- you're going to people who already gave at the office for years ago.
There were concessions right and other back in the soup and and I you know.
I it's like the airline guys -- the pilots and then in the baggage handlers and -- flight since it.
Been there done that you want more blood from that I not right not fair diet and I'm not.
And it's an issue so the way we chose to deal with it and then what I thought -- -- -- We try to make sure that that there is shared sacrifice across the board so for example wage concessions in our case our our total company concessions management and -- They're not unions are not targeted gentlemen so we'll cut wages as part of this proposal -- percent in the first year.
That's not insignificant things pick up every one profits.
Right so -- -- stated that.
There I think that they'll work for them because they're gonna get 25% of the equity of the company as part of this deal.
They're gonna get a hundred million dollars of -- -- debt so that'll be ahead of the equity.
So they're getting things that they didn't get the last time around as offsets for these concessions but the concessions are being shared by the that the entire company and not just one specific group but the.
Thank you -- as sort of a macro disadvantage in an age -- we haven't been I don't wanna put politics here but in an age where unions.
Are.
Heavily supported.
And and very popular.
With the president like to present its returns it is in back to them.
That.
Philosophies like yours getting tough onions or getting tough on costs.
In this environment at least -- this administration.
You're you're up against it.
-- well.
I think that there may be you know there there are certainly politics -- tried any time you're dealing with with you don't say anything unions feel a fellow union being sure.
But beyond -- date they respond but he sure but I give them I give that that the parties credit here so we we I came into the situation sort of -- -- the last guy in.
And you know when we had some very a very wide.
Gap between the parties involved in terms of finding a solution to go forward.
So I give the leadership credit because you know they they.
They made the moves they needed to make our our lenders made the news they need to make it's a true compromise because no one likes where they are.
So that's the nature of the true copper but I just can't see the maker Hartford twenty sending its -- -- -- Staples.
Dueling candidates I just can't figure out what -- -- I don't think it will mean I'm very hopeful that that this will go through -- and the company has I think great prospects because.
Our revenues have felt so if you look at what's going on with the company for the past year.
Bankruptcy bad press.
I -- -- some -- the stuff strike talk you know every other week.
You know trial 1113 trial -- you know you go through we've had corn prices that are dust bowl levels this summer yet forget that that impacts us so we've had everything to locusts.
But I think -- and the revenues are holding sailor and will watch it cause it has I think a lot of people were really.
Union about it a lot of people retreat as and I -- You -- -- an -- our our customers have been very supportive and our our employees have been greater vendors have been supporting either single handedly kept in business I'm not.
Ever do -- -- a thank you and we have isolated by -- 70% to testing I think might as well.
Thank you very Greg Rayburn -- the -- over hostess brands trying to turn.
