Another icon is about to get out of the kitchen. At least here in Southern California where a good old peanut butter and jelly sandwich has been replace with spicy tuna, no trans-fat, piece of hand rolled sushi with sodium light soy sauce! Yes folks, its true, Interstate Bakeries Corp., the bankrupt maker of Wonder bread and Hostess Twinkies, said Tuesday it will exit the bread business in Southern California, laying off about 1,300 workers.The Kansas City-based company said it will close four bakeries in Glendale, Pomona, San Diego and Los Angeles, as well as consolidate about 325 distribution routes and close 17 distribution centers and 19 outlet stores. "While IBC has made marked progress in several problem markets over the last six months, bread operations in Southern California continue to be unprofitable," Craig Jung, the company's chief executive, said in a news release. We'll get to Mr. Jung later.
Now here's where the real bullshit come in. In a zinger of a statement, Jung said the company has struggled in the region with low-cost competitors, changing consumer demand and labor problems. "We must stop reinforcing failure and press harder where there is success," he said. Interstate Bakeries has run into an impasse as it seeks concessions from unions that represent 82 percent of its 25,000 employees. The cuts come as Interstate Bakeries continues trying to streamline costs as it seeks a path out of almost three years of bankruptcy. In that time, the company has slashed its work force by 22 percent and shut down 10 bakeries. The $10.00 per hour worker is to blame, not the greed of the corporate executives. No way. Blame labor. Blame the worker. Blame the unions. Hell, blame everybody else that you've been unable to get your crap together for three years.
Let's look at these executives as opposed to the worker bees, shall we? Mr. Jung’s employment commenced on February 16, 2007 with a base salary of $900,000. He also received a signing bonus (in the bread business?) of $1,200,000. In addition, Mr. Jung is entitled to receive special cash awardsnot to exceed $3,000,000; and will be granted an equity interest in the Company equal to 2% of the number of shares of capital stock issued. Mr. Jung will be also be reimbursed for all relocation costs (including brokerage commission on the sale of his home, temporary living expenses, airfare, moving expenses, storage costs, legal and closing costs on the purchase of a new home, and gross up of these amounts) and expenses (including the legal fees incurred in connection with the preparation and negotiation of the employment agreement). Ahh, executive life. What fun!
Enough of Mr. Jung. He's got the cake with the frosting now. The other top Devil Dogs at IBC make some nice coin too! One of their execs, Ron Hutchison had his salary was increased from $350,000 to $375,000 in June 2007. He resigned from the Company on July 31, 2007! He'll make a total of $521,811 this year. Antonio Alvarez, the former CEO, makes $1,275,000, Michael Kafoure, the President and COO makes $757,822, Richard Seban, the current EVP and CMO makes $553,505 while the retired (yes, retired) EVP and CMO John Suckow makes 1,303,275. That's over 6 million bucks to the top 6 dudes! That's alot of bread. (Pun intended)
According to Sandi Sternberg, an Interstate Bakeries spokeswoman, said that "IBC's distribution system has not fundamentally changed in 75 years and has failed to account for both advances in technology and changes in grocery store and consumer preferences." The union has suggested a number of ways to cut other operations, which it said would save the company $295 million over five years. But Jung on Tuesday warned that the company is running out of time. It has until Oct. 5 to propose a reorganization plan or anyone else can make a proposal, including selling the company."We have weeks, not months or years, to act," Jung said.So you see? Another big company with management problems blames the labor force. They would never put the blame on themselves now would they? Would they take a pay cut like the Delta employees did to save their company? Hell no! But there is a bright spot in this for all of us Southern Californians who like high amount of fat and sugar in our diets...
The company said it will continue selling Hostess Twinkies, Dolly Madison cakes and doughnuts in the area. That's nice. I wonder if the 1300 unemployed will ever be able to eat a Twinkie again. Damn you IBC, damn you!
