Monday, December 10, 2012

Hostess Pensions

Some choice quotes from a Yahoo! News article on the Hostess pension plan hijinks (called by one person in the article a "Betrayal without remedy):

Mr. Rayburn became chief executive in March and learned about the issue shortly before the company shut down, he said. "Whatever the circumstances were, whatever those decisions were, I wasn't there," he said.


It might have been "impossible" to undo the agreements that called for Hostess to make pension contributions using employee money, Mr. Rayburn added. One reason: Hostess could have been too short of cash to make up the difference, though he said he isn't sure.
Now it is true Mr. Rayburn was a last minute CEO and may well have ended up leading a company that was in worse shape than expected.  But how he could not know basic details like whether the company had enough cash to meet obligations or not suggests a lot of disarray.  I understand that precise numbers in a large business are illusory, but he should have a decent idea given that it was a major sticking point of union negotiations.

Similarly, claiming that he can't take responsibility for previous bad decisions makes sense at some level.  But at another level it makes me wonder how anybody can negotiate with an entity that can change management and request a clean slate on past misdeeds since the current teram was not there.

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