Archive for the ‘Bankruptcy’ Category

Detroit: From Motown to Notown …

July 22, 2013

The city of Detroit has lost more than half of its population over the last 60 years.

In 1950, the city was the fifth-largest city in the country with a population of around 1.8 million.

Today its population is estimated at just under 700,000.

Translation: a tax base that’s asymptotically approaching zero.

Last week, the inevitable happened: the city of Detroit filed for bankruptcy.

The bankruptcy petition seeks protection from creditors and unions who stake claim to $18.5 billion in debt and other liabilities – mostly bloated union pensions.

Here’s a short video that puts the Detroit situation in perspective.

 

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Consider the following regarding the city of Detroit …

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Twinkies are dead … long live Twinkies.

November 16, 2012

Hot off the WSJ wires …

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Hostess Brands, the maker of iconic treats such as Twinkies and traditional pantry staple Wonder Bread, is shuttering its plants and liquidating its 82-year-old business.

A victim of changing consumer tastes, high commodity costs and, most importantly, strained labor relations, Hostess ultimately was brought to its knees by a national strike orchestrated by its second-largest union …  the Bakery, Confectionery, Tobacco Workers and Grain Millers Union.

The company will “promptly” lay off most of its 18,500 employees and focus on “selling its assets to the highest bidders.”

Hostess’s remaining inventory — loaves of bread and plastic packages of cream-filled desserts — probably will be sold in bulk to a discounter or big-box store.

The company will attempt to sell its plants and its brands – think Twinkies, Ding-Dongs.

The names have decades of “deliciously retro” brand equity, and there is “pretty significant demand” for the products.

A fresh owner of the intellectual property, which includes everything from names to recipes to graphics, could revitalize the Hostess brands  with new flavors, limited-edition Twinkies, co-branded products, and  international reach.

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