SAS near deal to avoid bankruptcy

19 November 2012 Last updated at 08:16 ET

The troubled Scandinavian airline SAS has said it is close to reaching a deal with trade unions needed to avoid bankruptcy, following all-night talks.

Owners and creditors of the airline have a plan to cut costs and jobs, but it needs approval from eight trade unions representing pilots and cabin crew in Sweden, Denmark and Norway.

The airline said on Monday morning it had reached agreement with all but one of the unions.

SAS wants to cut 6,000 jobs.

Talks are still continuing with the Danish cabin crew, according to the news agency Reuters.

Shares in the company jumped by a quarter in early trading on hopes of a turnaround. Even so, they are still down by 98% since their peak in 2007.

Cashflow concerns

“We have successfully negotiated seven of eight collective agreements, which is gratifying,” said chief executive Rickard Gustafson.

“But there remains one union and we must have it on board too. That is a condition for carrying out our plan.”

An agreement with all eight unions is a precondition for SAS to receive a 3.5bn-Swedish crown ($ 518m, £325m) loan from its three government parents and from six banks.

Despite the encouraging turn of events, rating agency Standard & Poor’s said on Monday that it had cut SAS’s credit rating from B- to CCC+, and placed it on review for further downgrade.

S&P attributed its downgrade decision to the company’s weak cashflow position, noting it had debts coming up for repayment over the next 12 months, and risked a loss of confidence by its suppliers.

The rating agency made no reference to the union negotiations, but said it would make a decision about a possible further downgrade in the next three months, once it becomes clear whether SAS’s restructuring plan is successful, including the possible knock-on impact on ticket sales.

SAS has struggled to deal with stiff competition from rival discount airlines, despite several attempts to cut its own costs.

Continue reading the main story

It has been a very gruelling process”

End Quote Espen Pettersen Deputy head of the main Norwegian cabin union

The airline, in which the governments of Sweden, Denmark and Norway control key stakes, had set Sunday as a deadline for an agreement with trade unions on wage cuts, as well as changes to pensions and working hours for staff, but talks were extended into Monday.

‘Not very happy’

In the early hours of Monday, at Copenhagen’s main airport, negotiators were seen entering and leaving the company’s headquarters, taking a break for food and drink.

“It has been a very gruelling process,” said Espen Pettersen, deputy head of the main Norwegian cabin union.

“We have made big concessions in this agreement. We are not very happy, but we felt we had no other choice but to sign to secure the jobs and the company.”

According to Norwegian press, pilots have agreed to a pay cut equivalent to one month’s salary, as well as an 8% increase in their workload.

Fears have been widely expressed in the Scandinavian media that a lack of a deal might prompt the airline to apply for immediate bankruptcy.

SAS has told crews to ensure planes are fully fuelled, so that they are able to return home if necessary.

The carrier has also given cash to staff to ensure they can get access to hotels in the case of a bankruptcy.

SAS has said that it wants to cut staff numbers from 15,000 to 9,000, as well as cut salaries by up to 17%.

BBC News – Business

Read More..

Canada pledges again to balance budget by 2015

OTTAWA/NEW YORK (Reuters) – The Canadian government on Friday reiterated its intention to balance its budget by 2015, three days after projecting there would be deficits until 2016-17.

In separate appearances in Quebec City and New York, Prime Minister Stephen Harper and Finance Minister Jim Flaherty were at pains to say they still intended to end the red ink by 2015.

“It remains the government’s plan, intention, to balance the budget prior to the next federal election. The recent economic and fiscal update by the minister indicates we are actually very close to that objective,” Harper told reporters in Quebec City. The next election is in October 2015.

Flaherty’s fall fiscal update on Tuesday had pushed back the target date for eliminating the deficit by a year, to 2016-17, citing a weak global economy.

But the minister said in a speech in New York that the government was on track to balance the budget in the next two to three years, barring major external events, and he later clarified that he intended a balanced budget by 2015.

“The prime minister’s always correct,” he chuckled.

He sought to explain the discrepancy by saying the fiscal update had built in a C$ 3 billion ($ 3 billion) contingency cushion, meaning there was an underlying surplus of C$ 1.2 billion for 2015-16. He said the projection of a C$ 1.8 billion deficit amounted to about half a percent of the C$ 275 billion federal budget.

“There’s lots of water to go under the bridge between now and then,” he said.

The opposition New Democratic Party noted the discrepancy in a release headlined: “Stephen Harper makes stuff up about balancing the budget.”

It pointed out that balancing the budget by the next election was not the same as balancing it by 2016-17.

As it is, even the 2015-16 timetable is a year later than offered in the Conservative campaign for reelection in May 2011. They had promised a balanced budget by 2014-15, followed by major personal income tax relief before the 2015 election.

Flaherty’s timetable drew criticism this week from the Canadian Taxpayers Federation, which said the minister had become expert at kicking the can down the road.

The projections could be thrown out of whack if the United States goes off the fiscal cliff, a set of automatic tax hikes and spending cuts that are to be triggered on January 2 if legislators and the White House cannot agree on a more nuanced budget deal.

Flaherty said U.S. failure to avert the fiscal cliff would cause a significant and immediate decline in Canada’s gross domestic product, and he would counter it.

Referring to a possible economic shock from Europe or the United States, he said: “If that were to happen and if the Canadian economy were to be pushed back into recession with the resulting danger for higher unemployment and the danger always of a prolonged recession, then we would act.”

He added: “We would not stand by and let that happen. The kinds of measure we can take: there are various tax measures we can take, there are measures with respect to stimulus we can take, these are things that we have done before and we can do again.”

On Tuesday, Flaherty spoke of having prepared various contingency plans.

(Additional reporting by Louse Egan; Editing by David Gregorio)

Canada News Headlines – Yahoo! News

Read More..

Wii U Launch Day: Everything You Need to Know

For Nintendo fans, the big day has arrived. Nintendo‘s newest console, the Wii U, began selling at midnight on Sunday morning across the United States.

[More from Mashable: Meet the Super Fan Who Waited in Line for a Month for a Wii U [VIDEO]]

The Wii U boasts high definition graphics and an innovative, new tablet controller called the GamePad. The GamePad can act as a second screen, either mirroring or displaying asynchronous content from the console. The GamePad can also function without the television even turned on.

Nintendo hosted a launch event at its Nintendo World store in Rockefeller Center in New York on Saturday night. Some fans had been lined up for a week or longer to pick up a console, and as the countdown ticked down to midnight, the line wrapped around the building. The event was attended by Nintendo of America President Reggie Fils-Amie, who addressed the crowd, as well as other Nintendo executives.

[More from Mashable: Marijuana Vending Machine Maker’s Stock Skyrockets and Everybody Freaks Out]

But demand for the console may not reach the insatiable levels of the 2006′s Wii launch, which sold out in stores across the country preceding the holidays. At 11:30 a.m., a Nintendo World employee said they still had consoles in stock, though there was a line of 30 people outside. Mashable was able to pick up a Wii U in a Brooklyn Target with no lines at 9:30 a.m.

We collected peoples’ photos and tweets of their experiences waiting in line across the country with Storify.

We want to hear your stories. Are you picking up a Wii U today? Drop a note in the comments or tweet a picture with the hashtag #wiiulines.

Assassin’s Creed III

A version of the latest chapter in the Assassin’s Creed saga, a week after it was released on other console.

Click here to view this gallery.

This story originally published on Mashable here.

Gaming News Headlines – Yahoo! News

Read More..

“Simpsons” actor Hank Azaria sues Craig Bierko over character right

LOS ANGELES (TheWrap.com) – Hank Azaria, who provides the voices for a host of characters on “The Simpsons,” including Moe Szyslak and Chief Wiggum, is suing over the rights to one of his characters.

Azaria and his How to Pictures, Inc. filed suit Wednesday against “Leap Year” actor Craig Bierko in U.S. District Court in Central California on Wednesday, saying that Bierko is jeopardizing a potential movie deal by falsely laying claim to a voice that Azaria claims he created nearly 30 years ago.

Don’t worry, though; Springfield’s favorite curmudgeonly bartender and inept police chief won’t be affected.

According to the suit, Azaria created a voice for a “a colorful baseball announcer who speaks with peculiar speech inflections” in 1983 or beforehand, and introduced the voice to Bierko after meeting him in 1990.

In 2010, Azaria used the voice in a Funny or Die skit in which he played a sportscaster named Jim Brockmire, which employed the voice in question. (The suit also notes that the Brockmire character employed other attributes, such as a plaid jacket and a back story about his wife abandoning him.)

The video became a hit, the lawsuit says – so much so that Azaria was able “to entertain discussions to develop a feature-length motion picture based upon the Jim Brockmire Character who uses the Azaria Voice.”

It also drew the attention of Bierko, who subsequently contacted Azaria and claimed to have created the voice either independently or in collaboration with Azaria, the suit says. (The complaint says that Bierko never made clear which it was, and that Azaria denies the claim in either case.)

The suit claims that Bierko’s claim to ownership on the voice “has created a cloud over the rightful ownership of the Azaria Voice (which is an integral part of the Jim Brockmire Character) such that Plaintiffs’ ability to develop a feature length motion picture based upon the Jim Brockmire Character is being significantly impeded.”

A representative for Bierko has not yet responded to TheWrap’s request for comment.

Azaria is seeking a declaration that the sportscaster voice alone isn’t copyrightable, but that the Brockmire character is, plus a declaration that Bierko as no claim to the voice. (He also wants Bierko blocked from laying claim to the voice.)

The suit also asks for attorney’s fees and court costs.

(Pamela Chelin contributed to this report)

TV News Headlines – Yahoo! News

Read More..

Monti repeats Italy does not need euro zone aid

MILAN (Reuters) – Prime Minister Mario Monti rejected suggestions on Saturday that Italy should seek aid from its euro zone partners to bind a new government to strict reform conditions after elections likely to be held in March.

Monti’s comments, in a panel discussion at Milan’s Bocconi University, follow growing speculation that he might try to use an aid program to guarantee that his broad economic agenda is continued once his term in office ends.

He said he had nothing against mechanisms including the special euro zone bailout fund and the European Central Bank’s bond-buying program to help governments that have undertaken budget and economic reforms but he said he would like to see other countries resort to such assistance.

“I don’t think Italy needs it, nor will need it,” he said in answer to a question during the discussion.

Italy’s borrowing costs have come down sharply since the ECB announced its so-called “Outright Monetary Transactions” plan in September. The yield on its 10-year BTPs is now just under 5 percent, well below a high of over 7 percent when Monti came to office during the height of the financial crisis a year ago.

Monti also defended his government’s decision to stick to the goal of a balanced budget, in structural or growth-adjusted terms, by 2013, despite the strain the objective imposes on Italy’s recession-hit economy.

He said the government had considered asking for more time to meet the objective but had decided not to.

“I have not regretted not asking for it,” he said, noting that a number of other euro zone countries had delayed budget deficit reduction targets and that Italy would not have seen its own interest rates fall if it had done the same.

The discussion came on the same day the government issued a 17-page account of its year in office which emphasized the international credibility Italy gained after Monti took over from the scandal-plagued Silvio Berlusconi.

CREDIBILITY

With the countdown to elections now on following President Giorgio Napolitano’s indication on Friday of a possible date of March 10, attention has focused on what will come after.

Opinion polls suggest that a center-left government of some form is the most likely outcome, but the political parties have yet to choose their main candidates or even decide under what voting system the ballot will be held.

Much attention has been focused on the possibility that Monti himself may return at the head of a broad-based reform coalition if the election fails to produce a clear winner.

His government has been widely praised abroad and the former European commissioner has strong support among business leaders, but the painful tax hikes and spending cuts imposed by his government have also sparked anger among ordinary Italians.

On Saturday, students protested outside the university buildings where Monti was speaking and two policemen were injured by firecrackers.

Monti, who said his record in office was neither as good as his many international admirers believed nor as bad as the critics among his fellow economists claimed, has said repeatedly that he would be available to serve if needed.

But he repeated that he had no plans to run in the election himself. “Noone has asked me for a commitment and I’m not committing myself today,” he said.

At a separate event in Rome, Luca Cordero di Montezemolo, the chairman of sportscar maker Ferrari, who leads a civil movement aimed at promoting reform, praised Monti but said that he did not expect him to take a political lead.

“We are not asking the premier today to assume the leadership of this political movement because it would prejudice his work,” he said.

(Writing By James Mackenzie; editing by Jason Webb)

Economy News Headlines – Yahoo! News

Read More..

Israel, Gaza fighting rages on as Egypt seeks truce

GAZA/JERUSALEM (Reuters) – Israel bombed Palestinian militant targets in the Gaza Strip from air and sea for a fifth straight day on Sunday, preparing for a possible ground invasion though Egypt saw “some indications” of a truce ahead.

Militant rocket fire into Israel subsided during the night but resumed in the morning with three rockets fired at the nearby coastal city of Ashkelon, the Israeli army said.

“As of now we have struck more than 1,000 targets, so Hamas should do the math over whether it is or isn’t worth it to cease fire,” Israeli Vice Prime Minister Moshe Yaalon, over Twitter.

“If there is quiet in the South and no rockets and missiles are fired at Israel’s citizens nor terrorist attacks engineered from the Gaza Strip, we will not attack.”

Forty-eight Palestinians, about half of them civilians, including 13 children, have been killed in Israel’s raids, Palestinian officials said. More than 500 rockets fired from Gaza have hit Israel, killing three people and injuring dozens.

Israel unleashed intensive air strikes on Wednesday, killing the commander of the Hamas Islamist group that governs Gaza and spurns peace with the Jewish state. Israel’s declared goal is to deplete Gaza arsenals and press Hamas into stopping cross-border rocket fire that has plagued Israeli border towns for years.

Air raids continued past midnight into Sunday, with warships shelling from the sea. A Gaza City media building was hit, witnesses said, wounding 6 journalists and damaging facilities belonging to Hamas’s Al-Aqsa TV as well as Britain’s Sky News.

An Israeli military spokeswoman said the strike had targeted a rooftop “transmission antenna used by Hamas to carry out terror activity”.

Two other predawn attacks on houses in the Jabalya refugee camp killed two children and wounded 13 other people, medical officials said.

These attacks followed a defiant statement by Hamas military spokesman Abu Ubaida, who told a news conference: “This round of confrontation will not be the last against the Zionist enemy and it is only the beginning.”

The masked gunman dressed in military fatigues insisted that despite Israel’s blows Hamas “is still strong enough to destroy the enemy”.

An Israeli attack on Saturday destroyed the house of a Hamas commander near the Egyptian border.

Casualties there were averted however, because Israel had fired non-exploding missiles at the building beforehand from a drone, which the militant’s family understood as a warning to flee, and thus their lives were spared, witnesses said.

Israeli aircraft also bombed Hamas government buildings in Gaza on Saturday, including the offices of Prime Minister Ismail Haniyeh and a police headquarters.

Among those killed in air strikes on Gaza on Saturday were at least four suspected militants riding motorcycles, and several civilians including a 30-year-old woman.

ISRAELI SCHOOLS SHUT

Israel said it would keep schools in its south shut on Sunday as a precaution to avoid casualties from rocket strikes reaching as far as Tel Aviv and Jerusalem in the past few days.

Israel’s “Iron Dome” missile interceptor system destroyed in mid-air a rocket fired by Gaza militants at Tel Aviv on Saturday, where volleyball games on the beach front came to an abrupt halt as air-raid sirens sounded.

Hamas claimed responsibility for the attack on Tel Aviv, the third against the city since Wednesday. It said it had fired an Iranian-designed Fajr-5 at the coastal metropolis, some 70 km (43 miles) north of Gaza.

In the Israeli Mediterranean port of Ashdod, a rocket ripped into several balconies. Police said five people were hurt.

Israel’s operation has drawn Western support for what U.S. and European leaders have called Israel’s right to self-defense, but there was also a growing number of calls from world leaders to seek an end to the violence.

British Prime Minister David Cameron “expressed concern over the risk of the conflict escalating further and the danger of further civilian casualties on both sides,” in a conversation with Israeli Prime Minister Benjamin Netanyahu, a spokesperson for Cameron said.

London was “putting pressure on both sides to de-escalate,” the spokesman said, adding that Cameron had urged Netanyahu “to do everything possible to bring the conflict to an end.”

Ben Rhodes, a deputy national security adviser to President Barack Obama, said the United States would like to see the conflict resolved through “de-escalation” and diplomacy, but also believes Israel has a right to self-defense.

Egyptian President Mohamed Mursi said in Cairo as his security deputies sought to broker a truce with Hamas leaders, that “there are some indications that there is a possibility of a ceasefire soon, but we do not yet have firm guarantees.”

Egypt has mediated previous ceasefire deals between Israel and Hamas, the latest of which unraveled with recent violence.

A Palestinian official told Reuters the truce discussions would continue in Cairo on Sunday, saying “there is hope,” but it was too early to say whether the efforts would succeed.

In Jerusalem, an Israeli official declined to comment on the negotiations. Military commanders said Israel was prepared to fight on to achieve a goal of halting rocket fire from Gaza, which has plagued Israeli towns since late 2000, when failed peace talks led to the outbreak of a Palestinian uprising.

Diplomats at the United Nations said Secretary-General Ban Ki-moon is expected to visit Israel and Egypt in the coming week to push for an end to the fighting.

POSSIBLE GROUND OFFENSIVE

Israel, with tanks and artillery positioned along the frontier, said it was still weighing a ground offensive.

Israeli cabinet ministers decided on Friday to more than double the current reserve troop quota set for the Gaza offensive to 75,000 and around 16,000 reservists have already been called up.

Asked by reporters whether a ground operation was possible, Major-General Tal Russo, commander of the Israeli forces on the Gaza frontier, said: “Definitely.”

“We have a plan. … It will take time. We need to have patience. It won’t be a day or two,” he added.

A possible move into the densely populated Gaza Strip and the risk of major casualties it brings would be a significant gamble for Netanyahu, favored to win a January election.

The last Gaza war, a three-week Israeli blitz and invasion over the New Year of 2008-09, killed 1,400 Palestinians, mostly civilians. Thirteen Israelis died in the conflict.

But the Gaza conflagration has stirred the pot of a Middle East already boiling from two years of Arab revolution and a civil war in Syria that threatens to spread beyond its borders.

One major change has been the election of an Islamist government in Cairo that is allied with Hamas, potentially narrowing Israel’s maneuvering room in confronting the Palestinian group. Israel and Egypt made peace in 1979.

(Writing by Allyn Fisher-Ilan; Editing by Douglas Hamilton)

World News Headlines – Yahoo! News

Read More..

So, Here’s That ‘Big Bang Theory’ Flashmob You Wanted

We realize there’s only so much time one can spend in a day watching new trailers, viral video clips, and shaky cell phone footage of people arguing on live television. This is why every day The Atlantic Wire highlights the videos that truly earn your five minutes (or less) of attention. Today:

RELATED: Beating Novak Djokovic: Never Forget Three-Fingered Steve

Psychologist Richard Wiseman has an interactive game for you to let you know you’re just predictable. To be fair, a couple of us tried it out and were not as predictable as Wiseman thought we were going to be. But without further ado, here it is (have some screen cleaner ready):

RELATED: A ‘Mad Men’ Rickroll and the Man That Destroys Carnival Games

RELATED: It’s Sort of Fun Watching Pippa Middleton Squirm

We too are very excited for the Disney installments of Star Wars. New movies, Ewoks, whatever count us in. We’re just not this excited: 

RELATED: A Video to Restore Our Faith in Humanity and a Glacier Tsunami

RELATED: Myspace Hopes Its Sexy New Video will Bring You Back

If you don’t know, The Big Bang Theory is basically a show about a bunch of really smart, really nerdy dorks. Now when it comes to the actual cast of The Big Bang Theory, we’re only pretty sure (and happy to be proven wrong) only one of those things apply:

And finally, do you have $ 37? If so, would you mind donating it to The Atlantic Wire robot fish aquarium fund? We promise, it’s totally a great cause. Thanks in advance!

Wireless News Headlines – Yahoo! News

Read More..

Lindsay Lohan pushed for Elizabeth Taylor TV role

LOS ANGELES (Reuters) – Lindsay Lohan so wanted to play Elizabeth Taylor in the upcoming film “Liz & Dick” that she cut out the middle man and went straight to the producer herself, the tabloid-favorite star said in an interview on Friday.

Lohan, 26, plays Taylor in an upcoming television movie that dramatizes the long love affair between the late Hollywood legend and actor Richard Burton.

“It’s a funny story, actually. I had seen that they were going to be making the movie and I got the producers’ numbers and started harassing (producer) Larry Thompson,” Lohan said on ABC’s “Good Morning America.”

“I didn’t even care if my agents were going to do it or not, I just did it myself, too,” the “Mean Girls” actress said. “Because I was like, ‘No one else is going to play this role, I have to do this.’”

Early reviews of “Liz & Dick,” which premieres on U.S. cable channel Lifetime on November 25, have ranged from middling to poor. But TV critics noted the similarities between Lohan and Taylor, both often-troubled actresses who started life as child stars.

“‘Liz & Dick’ truly drags,” said the Hollywood Reporter. “Luckily, you can’t take your eyes off of Lohan playing Taylor, which the producers clearly thought would work because they share similar back stories.”

Lohan’s acting alongside New Zealand’s Grant Bowler as Burton was described by Variety on Friday as “adequate, barring a few awkward moments, thanks largely to the fabulous frocks and makeup … she gets to model.”

Lohan’s reputation, much like Taylor’s, has been built from her tabloid persona more than on-screen performance.

In and out of legal trouble, jail and rehab since 2007, Lohan faced media blow-back this week after canceling an in-depth interview with ABC’s Barbara Walters, who said she suspected the actress’ publicity team pulled the plug knowing Walters would ask tough questions.

(Reporting by Eric Kelsey; editing by Jill Serjeant and Matthew Lewis)

Celebrity News Headlines – Yahoo! News

Read More..

Twinkies maker Hostess plans to go out of business

(Reuters) – Hostess Brands Inc, the bankrupt maker of Twinkies snack cakes and Wonder Bread, is seeking a U.S. court’s permission to go out of business after failing to get wage and benefit cuts from thousands of its striking bakery workers.

The 82-year-old Hostess, which has about $ 2.5 billion in sales and is one of the largest wholesale bakers and distributors of breads and snack cakes in the United States, filed the request with the U.S. Bankruptcy Court in New York early Friday morning. A hearing on the matter is set for Monday.

The Irving, Texas-based company said the liquidation would mean that most of its 18,500 employees would lose their jobs. Hostess immediately suspended operations at all of its 33 plants across the United States as it moves to start selling assets.

“We’ll be selling the brands and as much of the infrastructure as we can,” said company spokesman Lance Ignon. “There is value in the brands. But some bakeries will never open again as bakeries.”

Ignon said the company made final deliveries on Friday of products made on Thursday night. Hostess’s top-selling products are its chocolate cupcakes, Twinkies cakes and its powdered sugar and frosted “Donettes.”

Hostess products, particularly the golden, cream-filled Twinkies cakes, are deeply ingrained in American pop culture and have long been packed in school children’s lunch boxes. Entrepreneurs on auction site eBay Inc were asking as much as $ 100 for a box of 10 Twinkies on Friday morning.

Raj Patel, owner of Sarah’s Market in Cambridge, Massachusetts, said he was sorry to see the company go out of business.

“It’s been around for ages,” said Patel, 40. “A lot of people are familiar with the brand and it’s going to be tough for some people to do without.”

NOT INTERESTED IN BREAD

Hostess blamed heavy debt and burdensome wage and pension obligations for its financial woes. It said a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), which began November 9, was part of a long series of battles between labor and management that contributed to the company’s inability to restructure its finances and produce and deliver products at several facilities.

But union officials and line workers said union workers had already agreed to a series of concessions over the years and the company had failed to invest in brand marketing and modernization of plants and trucks and had focused instead on enriching owners such as private equity firm Ripplewood Holdings and hedge funds Silver Point Capital and Monarch Alternative Capital.

Officials at the three firms declined to comment.

“Our members decided… they were not going to agree to another round of outrageous wage and benefit cuts and give up their pension only to see yet another management team fail and Wall Street vulture capitalists and ‘restructuring specialists’ walk away with untold millions of dollars,” said BCTGM International Union President Frank Hurt.

Picketing workers echoed the sentiment.

“The people who are running this company are not interested in making bread,” said Roger Harrison, 56, who bags buns at the Hostess plant in Lenexa, Kansas, and has been with the company for 35 years.

“They are not in the baking industry; they are just interested in the money,” Harrison said.

The company had started implementing an 8 percent pay cut, a 20 percent increase in healthcare costs, and changes to pension and workday provisions when workers went on strike on November 9. Hostess had given employees a deadline to return to work on Thursday, but the union held firm, saying it had already given far more in concessions than workers could bear and that it would not bend further.

“The union has been the death of this company,” said a human resources manager who recently left Hostess.

LONG LABOR BATTLES

Hostess’s battle with its workforce has brewed for years. Formerly known as Interstate Bakeries Corp (IBC), the company for decades was based in Kansas City, Missouri. It filed for bankruptcy in September 2004 and emerged in 2009 with a host of employee concessions from various unions.

A source with knowledge of the situation who spoke on condition of anonymity said the company was well positioned when it emerged from bankruptcy in 2009, but the recession, a spike in commodity prices and consolidation of major competitors reshaped the landscape and forced more restructuring.

“We tried to get the senior creditors and the unions together and it dragged on and on and on and the company got weak,” said the source. “I’m still praying, literally, that something is worked out and they don’t liquidate the business.”

When Hostess filed for bankruptcy protection in January of this year the company said it must withdraw from multi-employer pension plans, address legacy health and welfare costs and secure new capital to modernize its operations.

The company has spent the last several months battling for wage cuts and other concessions from 12 unions representing Hostess workers. At one point earlier this year, Hostess had a potential outside equity investor lined up, but failure to gain pension relief from the International Brotherhood of Teamsters union killed that option, the company said in its court filing on Friday.

The company submitted offers to both the Teamsters and the bakery union in August, in what the company said was a final effort to save the company. The Teamsters accepted the proposal but the bakery union balked.

With court approval, Hostess implemented the contract changes in October. The bakery workers then launched strikes that disrupted operations at 24 bakeries. Hostess said the strikes were the final blow to the already “daunting obstacles” to reorganization.

The company’s court filing said that it hopes it can arrange the sale of groups of assets to be operated as going concerns.

WIND-DOWN PLAN

Hostess has 565 distribution centers and 570 bakery outlet stores, as well as the 33 bakeries. Besides Twinkies and Wonder Bread, its brands include Nature’s Pride, Dolly Madison, Drake’s, Butternut, Home Pride and Merita.

The company said in Friday’s court filing that it would probably take about a year to wind down. It will need about 3,200 employees to start that process, but only about 200 after the first few months.

Hostess had been gauging acquisition interest for certain brands for months and in late September received “a number of potentially viable proposals” to purchase certain assets.

Pabst Brewing Co owner, C. Dean Metropoulos & Co, is considering making an offer to buy Hostess Brands Inc, Daren Metropoulos, a principal at the private-equity firm, told Bloomberg News. Metropoulos did not return a request for comment.

SunTrust Robinson Humphrey analyst William Chappell Jr. said Flowers Foods Inc could be among the potential buyers for some Hostess assets. And he said the company’s liquidation was a “positive step” for the sector because it will reduce the number of major vendors.

In addition to Flowers, Bimbo Bakeries USA, a division of Mexico-based Grupo Bimbo, and Pepperidge Farm, a division of Campbell Soup Co, were considered prospective buyers, analysts said.

It is not a given that all of the better-known brands will survive, analysts said. “I’d be surprised if the Twinkies brand isn’t gone for good,” said Timothy Ramey, analyst at D.A. Davidson & Co.

The company has canceled all orders with its suppliers and said any product in transit would be returned to the shipper.

The company’s last operating report, filed with the bankruptcy court in late October, listed a net loss of $ 15.1 million for the four weeks that ended in late September, mostly due to restructuring charges and other expenses.

The case is In re: Hostess Brands Inc, U.S. Bankruptcy Court, Southern District of New York, No. 12-22052.

(Reporting by Carey Gillam in Kansas City and Jonathan Stempel in New York; Additional reporting by Tanya Agrawal in Bangalore, Ben Berkowitz, Nick Zieminski and Phil Wahba in New York; Editing by Lisa Von Ahn, Phil Berlowitz, Andre Grenon, Tim Dobbyn and Carol Bishopric)

Business News Headlines – Yahoo! News

Read More..

Canadian October home sales dip, latest sign of cooling

TORONTO (Reuters) – Sales of existing homes in Canada fell in October from September and year-over-year sales were down as well, the Canadian Real Estate Association said on Thursday in the latest signal that the housing market is slowing.

The industry group for Canadian real estate agents said sales were down 0.1 percent in October from September. Actual sales for October, not seasonally adjusted, were down 0.8 percent from a year earlier.

The housing market, which roared higher in 2011 and the first half of 2012, started to slow after the government tightened rules on mortgage lending in July in a bid to cool the market and prevent home buyers from taking on too much debt.

“Housing market trends in Canada for 2012 can be characterized as before and after regulatory changes,” TD Economics senior economist Sonya Gulati said in a research note.

“In the first half of the year, sales and price gains were modest, but positive. More stringent mortgage rules and tighter mortgage underwriting rules have ‘purposely’ knocked the wind out of the housing market sails,” she said.

The home sales data showed diverging paths in Canadian housing depending on location. In Toronto and Vancouver, where sales and price gains were red hot in 2011 and early in 2012, the market has been cooling. But markets in the resource-rich western provinces of Saskatchewan and Alberta have been gaining strength.

“Opinions differ about how sharply sales have slowed depending on the local housing market,” Gregory Klump, CREA’s chief economist, said in a statement.

Led by Calgary, sales in October were up from a year earlier in almost two-thirds of local markets. Sales remained blow year-earlier levels in Toronto, Vancouver and Montreal, CREA said.

“These results suggest that the Canadian housing market overall has returned to a more sustainable pace,” Klump said.

CREA’s Home Price Index rose 3.6 percent in October from a year earlier, the sixth consecutive month in which gains in prices slowed, and the slowest rate of increase since May 2011.

While tighter mortgage rules have worked to slow the market, TD’s Gulati said the big question is what will happen when that temporary cooling effect wears off in early 2013.

“What happens thereafter is less certain. The low interest rate environment could pull homeowners back onto the market, causing home prices to once again trek upwards. Alternatively, an absence of pent-up demand may leave the market in a bit of a lull until interest rate hikes resume in late 2013,” she wrote.

“Under either scenario, it is safe to say that there is a low probability of out-sized home price gains over the near-term.”

A total of 402,322 homes traded hands via Canadian MLS systems over the first 10 months of 2012, up 0.8 percent from the same period last year and 0.4 percent below the 10-year average for the period, the data showed.

The number of newly listed homes fell 3.8 percent in October following a jump in September. Monthly declines were reported in almost two-thirds of local markets, with Toronto and Vancouver exerting a large influence on the national trend.

Nationally, there were 6.5 months of inventory at the end of October, little changed from the reading of 6.4 months at the end of September.

(Editing by Peter Galloway)

Canada News Headlines – Yahoo! News

Read More..