Frontier Airline's New Mascot

Frontier Airlines used to be a big name in Milwaukee, but have cut hundreds of jobs as Scott Walker's and Chris Abele's austerity agenda has continued to ruin our state and regional economies.

Now Frontier is doing their own part to ruin the economy:

Denver-based Frontier Airlines on Friday said it will lay off 140 Milwaukee reservation employees as part of its plan to transition management of its reservation department to a business partner, Nashville-based Sitel.

Frontier also will lay off 1,160 airport employees in Denver as part of the outsourcing efforts.

Many of the employees laid off in both locations will be rehired by the business partners, a Frontier spokesperson said. In addition, the airline is offering “significant” severance that employees will receive even if they are rehired.

“Today’s announcement is by no means a reflection of the service or level of work provided by our team members,” Frontier said in a statement. “The business partners we have selected are high-quality organizations and employees will be given priority in interviewing.

“These changes continue to be part of a comprehensive companywide strategy that is crucial for Frontier to successfully compete in the marketplace as an ultra-low cost carrier, allowing it to offer customers much needed relief from high airfares nationwide. Low fares are only achieved through low costs.”

We have seen this type of vulture capitalism too many times.

The workers that are lucky enough to get jobs with the new company will surely see a big cut in pay and benefits. Meanwhile, consumers won't see any significant savings - and maybe no savings at all. However, it's also safe to say that the CEO and board of directors will see huge bonuses and pay raises.

One of Frontier Airlines' gimmicks is to have pictures of animals on the tails of their planes. They should switch those pictures of vultures to honor the vulture capitalism they continue to practice.

Vulture Capitalism Versus The Transit Rider

Last month, an Ohio-based company called Developers Diversified Realty told the Milwaukee Transit County System that they had to move three bus stops which were located in the parking lots of property they own.  The reason for this sudden demand was made obvious in the reporting of the news (emphasis mine):

Milwaukee County last month reluctantly removed bus stops from three large area shopping centers at the request of the property manager.

That manager, Ohio-based Developers Diversified Realty, asked that the bus stops be removed and argued buses damage roadways and interfere with the commercial development of the areas, according to a report to the Milwaukee County Board. The request pertained to the Shoppers World of Brookfield on West Capitol Drive, West Allis Center on Highway 100 and Marketplace of Brown Deer on North Green Bay Road.*

Milwaukee County Transit System officials responded to questions about the routes with a printed statement.

“We are disappointed that we had to re-route buses at these locations, causing inconvenience to our customers, especially those with limited mobility,” the statement said. “Over the years, as shopping centers renovate, we have worked diligently to maintain public transit access. Being asked to totally vacate a property is rare, especially at locations where there are hundreds of riders per day benefiting from the service.”

The article goes on to say that MCTS has found a solution at one site due to the cooperation of a Pick'N'Save store allowing the buses to park along the side of their building. They've moved the other two sites to temporary sites while they try to find something more workable.

I am familiar with the West Allis Center.  It is a large strip mall that holds a Dollar Store, Marshall's, Pick'N'Save, Kohl's and a Menard's store.  Along the sidewalk is a BMO Harris Bank; a UW Credit Union which they had just built on the spot where a Blockbusters store stood; a Walgreens pharmacy; and a Panda Express, which had also been built in the last year or two.  They often have a Christmas tree stand there during the holidays as well.

It's fairly obvious that the realtors are looking to maximize their income and profits by kissing the public good good-bye and developing the remaining open spots, including where the buses would lay over.

The problem lies that by moving these bus stops, it's preventing people that are dependent on mass transit from having easy access to the stores in the area.  This not only hurts the people that use the buses, but the businesses that these people would patronize.  And if business drops off, that means even more people will have to take pay cuts and/or lose their jobs.

At least one Milwaukee County elected official, Supervisor Michael Mayo, isn't sitting around.  He issued a press release on Wednesday, condemning these moves:

“Re-routing those buses away from these commercial strips is not only a big inconvenience for all riders, it represents a severe disadvantage for elderly and disabled riders,” Mayo said. “Those with limited mobility will now be forced to travel further to get to their destinations.

“Moving bus routes by even two-tenths of a mile may not seem like much to an able-bodied person, but to a disabled or elderly person it represents a significant handicap.”

Mayo questioned why the manager of the shopping centers, Developers Diversified Realty, removed the stops, saying that it appeared to be a maneuver to keep some people away.

“Those routes carry hundreds of people every day,” Mayo said. “Why would they want to remove those stops when people use them to shop at their stores?”

Mayo praised commercial property owners who work with MTS to make their stores readily accessible to all members of the public.

“Most commercial property owners realize that having a bus route leading to their establishment is a significant advantage for their business,” he said. “I applaud them for knowing that transit is key to our economy, and all customers should have access to their establishments.”

It should be noted that Milwaukee County Emperor had nothing to say about this. Then again, it shouldn't be surprising. He's already shown he doesn't really give a darn about the transit system or who might be harmed if the system isn't being operated correctly.

*It should be noted that I have heard reports that the owner of Southridge Mall is also forcing the bus stops off their property.

Zombie Twinkies

Last November, the vulture capitalists that ran Hostess had decided that they had sucked all the cream filling out of those sponge cakes and went about to liquidize the company.  Of course, the corporate sock puppets blamed the unions, even though the facts had shown otherwise.

As the vulture capitalists fed on the remains of Hostess, court proceedings confirmed that the unions had nothing to do with the companies closure since the executives had the execution planned for more than a year before this.

After a few months, new vulture capitalists took over the corpse of the company and brought it back to life.

On Monday, Twinkies came back and hit the shelves.  But their return left a lot to be desired

Twinkies are back, but they may be a bit smaller than you remember.

The new boxes hitting shelves this week list the spongy yellow cakes as having 270 calories and a weight of 77 grams for two cakes, or 135 calories and 38.5 grams for one cake.

Right before it went out of business, the predecessor company had told The Associated Press that Twinkies were 150 calories per cake. Photos of past boxes online also indicate the weight to have been 42.5 grams per cake.

[...]

Hostess has said that Twinkies will remain the same price, at $3.99 for a box of 10. Retailers may charge different prices, however.

[...]

The new owners, which are known for fixing up struggling brands, are not using unionized workers. That means their labor costs are lower than they were for the previous owners.

The bakers union has encouraged the new owners to change their approach and work with its members. It notes that the experience of its members offers "the best chance for long-term success in consistently putting out a quality product."

So let's run this down.

The vulture capitalists and their sockpuppets said that it was the greedy union members that sunk Hostess. Now that the Twinkies are coming back - without those "expensive" union workers - the Twinkies should cost less. I mean, the workers are now not making anywhere near what they were before they killed Hostess.

But the prices didn't change.  However, the Twinkies did.  They shrunk.  This means the customer is paying the same amount of money for less product.  In other words, even though labor costs dropped, the cost of the Twinkies rose.

What this means is that with this new group of vulture capitalists, not only the workers are getting screwed, so are the customers.

As far as I'm concerned, they can take their creme filling and shove it where the Twinkies don't shine.  I am not going to buy any of their products until they treat their customers and their workers with respect and dignity.

Killing The Golden Calf

Lisa Mux, the Waukesha Wonk, called it days ago, when Golden Guernsey up and closed up shop without any advanced warning or attempts to work with the state to help out the well more than 100 workers they just laid off.

Mux had written right after the news at broken:

In fact, the real trouble seemed to start when an investment company in California, Open Gate Capital, bought out the plant after the lawsuit. According to some workers, Open Gate did not have any experience in dairy, and may not have been a reliable company. From Fox 6 Now:

It is a lawsuit workers believe let an unreliable company purchase the plant and shut it down.

Open Gate finally issued a press release and - wouldn't you know it?- blamed the unions:

OpenGate Capital said that when it acquired Golden Guernsey, the acquisition terms included an exclusive and fixed-price milk supply agreement, and the assumption of a legacy union contract. As Golden Guernsey was under pressure to meet demands for lower cost products, it was unable to successfully reduce its expenses in a way to achieve a state of financial viability given some of its legacy relationships, according to OpenGate Capital.

Since being acquired by OpenGate Capital, Golden Guernsey made efforts to reduce its expenses through discussions with its various suppliers, vendors and the labor union.

“The prospect of closing the plant and the potential for bankruptcy was raised on several occasions with these groups, all of which were provided with a clear picture of Golden Guernsey's fragile financial condition. Despite this, Golden Guernsey's efforts were rejected, leading to the closure of the business,” OpenGate stated in a press release.

Yup, sounds just like what the vulture capitalists at Hostess said when they killed off that business, grabbed the money and ran like the thieves that they are.

As soon as the Open Gate vultures realized that they weren't going to get to keep their monopoly and rake in the money hand over fist, they closed shop and ran off with all the loot they can carry.

Fortunately, at least one person knew his rights and has filed a complaint with the state for the company's illegal maneuver. It'll be interesting to see what Scott Walker will have his people do with the complaint. I guess it really comes down to how much money Open Gate donated to Walker's legal defense fund.

But I can't help but appreciate that this is a twist of a classic portrayal of the greedy bastards like those at Open Gate. Only instead of stealing candy from a baby, they taking milk way from little kids.

Hostess Never Planned On Staying In Business

Last month, when Hostess shut down operations, the CEOs and the right wing immediately blamed the striking union workers. I corrected their misperception:

The story of Hostess is nothing but an example of capital vultures pulling a Bain job on the company and its workers, then blaming the unions for their treachery and theft.

This is the kind of life that Mitt Romney and Paul Ryan was promoting and Scott Walker is still pushing. This is their idea of being successful and being business friendly.

Hostess would have shut down whether the unions capitulated or not. In fact, it was only the huge concessions the unions had already made that kept it around as long as this. Without those concessions, the executives would have taken the money and ran years ago.

Now, as the capitalistic vultures are planning on cashing in even more on the company's demise, new reports show that this was indeed planned for all along:

Hostess Brands Inc. began contingency planning for a liquidation more than a year before irate bakers went on strike, court records show.

The bankrupt Irving-based snack maker has consistently said that a strike by the bakers — members of its second-largest union — pushed it into liquidation mode. The bakers have countered that the company’s woes predate the strike.

Clearly, planning for a possible liquidation predates the strike and even predates union votes in the fall on the company’s last best and final offer.

A 32-page document filed last week in Hostess’ bankruptcy case shows that in July or August 2011 the company hired a consultant who estimated that the liquidation value of the company’s assets, on the high end, was about $522 million. The report is dated Aug. 30, 2012, and parts of it have been reported earlier.

A different consultant said in court recently that the company’s assets, including its popular brands such as Twinkies and Wonder Bread, could fetch $1 billion.

Hostess said it expects to file binding “stalking horse” bids for many of its brands in January, followed by a four-week auction process to allow competing bids. Sale closings for many brands could come as soon as mid-March, Hostess has said.

Oh, and it wasn't the union's fault either:

While the dissolution of Hostess may have taken Twinkie lovers by surprise, for some following the case, it had been a strong possibility for months. There were too many issues that even warmer union relations would not have changed.

Hostess was loaded with debt even after its predecessor company emerged from bankruptcy court in 2009. And it faced an even greater debt load when it entered bankruptcy court in January.

Even after the new bankruptcy case was filed, it needed a cash infusion. GE Capital, a key lender, has said repeatedly it wants its money back. No one stepped up to offer the cash needed to help the company emerge from bankruptcy protection or to fund much-needed capital improvements.

Also, consumer tastes have been changing while Hostess’ product lineup has remained largely the same.

“So many things had to break right for Hostess to successfully emerge from bankruptcy, beyond labor negotiations, that Hostess knew it made sense to plan for liquidation,” said Jeffrey Freund, general counsel to the bakers union.

Last year, Hostess selected FTI Consulting to look at potential proceeds and costs of a “forced liquidation” of the company’s assets following a worker strike, according to the court filing.

In November 2011, FTI prepared an analysis that also showed potential proceeds under an “orderly breakup” of the company through the sale of Hostess’ brands and assets as going concerns. Those sales would be followed by a liquidation of all remaining assets.

The “forced liquidation” was estimated to bring in up to $450 million, with $336 million available for distribution to those with claims, once the liquidation costs were subtracted.

An “orderly breakup” was estimated to bring in up to $521.7 million with $410 million available for distribution.

What this is saying in a nutshell is that the vultures figured it was time to finish off the company and take their money and run. So they planned ahead of time to file for bankruptcy and how they would make maximum profit out of the deal. Then they set up the unions by offering a contract that they new the unions couldn't accept and bargained in bad faith to make provoke a strike. They used the strike as an excuse to implement their plan of killing the company and reaping their profits.

These vultures will probably be rewarded with high position jobs in other companies where they will feed like the parasites they are. Meanwhile, 18,000 people have gotten the shaft due to the greed of these few reprobates.