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November 16, 2012 2:53 PM The Demise of the Twinkie-Makers

By Ed Kilgore

So by now most of you have probably heard about Hostess Brands announcing it would begin to shut down its operations, blaming its demise on labor costs and a just-initiated strike by the Bakery, Confectionery, Tobacco Workers and Grain Millers Union (the Teamsters recently made pay concessions for its Hostess Brands workers).

Since this is being broadly interpreted as another example of greedy unions making life impossible for poor, struggling job-creators, let’s give a little equal time to a statement by AFL-CIO president Rich Trumka:

What’s happening with Hostess Brands is a microcosm of what’s wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor. Crony capitalism and consistently poor management drove Hostess into the ground, but its workers are paying the price. These workers, who consistently make great products Americans love and have offered multiple concessions, want their company to succeed. They have bravely taken a stand against the corporate race-to-the-bottom. And now they and their communities are suffering the tragedy of a needless layoff. This is wrong. It has to stop. It’s wrecking America.

For those addicted to Hostess’ sugary products, it should be noted the company will sell off its most successful brands, so someone will probably still be selling Twinkies—just not Twinkies produced by the workers who have been making them up until now.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

Comments

  • Michael Robinson on November 16, 2012 3:16 PM:

  • Virgil Bierschwale on November 16, 2012 3:16 PM:

    If I wasn't so poor from having no work, I would bet a bottle of turkey 101 that the following happens

    The players in this article (ripplewood, bain capital, etc.)

    http://keepamericaatwork.com/?p=208473

    get approval for bankruptcy.
    Fire all employees..
    Bimbo Bakeries buys all equipment, etc..
    Hires existing management
    Offers former employees a take it or leave it job offer

    and to top it off, ripplewood has a major financial stake in the new company.

    same company, same equipment, same everything.

    but employees lose all except for a new minimum wage job.

  • beejeez on November 16, 2012 3:32 PM:

    In other words:

    Our spread sheets tell us that as of now the owners of Hostess will make more from taking their profits, siphoning off what's legally allowable from your pension outlays, and then selling the company to a bigger food-processing corporation.

    So, union's fault? For their members, I think the jury is out. Who knows what the new owners are going to pay their workers and whether they'll hire the proles now toiling for Hostess? One thing for sure: I'm not crying for the owners of Hostess, who'll probably be well paid to oversee MegaFoodCorp's new snack-cake division or retire to St. Barts. The mystery to me is why they don't just charge customers another few percent for their products to cover labor costs. People are always going to buy Ding-Dongs, Ho-Hos and Twinkies.

  • TCinLA on November 16, 2012 3:39 PM:

    Yeah, it's the horrible terrible godawful unions that loaded Hostess up with a billion dollars in debt and now won't allow the wonderful people in management to solve that horrible terrible problem those thugs created.

    Yeah, right....

    Try this for an accurate presentation of what happened:

    http://management.fortune.cnn.com/2012/07/26/hostess-twinkies-bankrupt/

    Here are the names of the criminals who are taking the company into bankruptcy to get their stolen millions:

    Two large hedge funds, Silver Point Capital and Monarch Alternative Capital; and the private-equity firm Ripplewood Holdings.

    What's happened is that Hostess has been "Bained."

    What we need to do is declare hedge funds and private equity firms illegal, then take the pinstriped pimps and pirates who run them out front of their company and leave them twisting in the wind as they dangle from lamp posts.

  • Leopold von Ranke on November 16, 2012 4:09 PM:

    Never having tried pot myself, I have long struggled to understand why anyone would buy, let alone ingest a "Twinkie." Aside from the jobs that will be lost, good riddance.

  • The New York Crank on November 16, 2012 4:14 PM:

    Formula for making millions

    •Buy a struggling bakery company with increasingly irrelevant and unpopular processed breads an sugary snack cakes as its lead products

    •Demand and get concessions from labor unions. Insert savings resulting therefrom in your own pocket

    • Don't innovate new products

    • Don't do any significant or innovative marketing of old products

    • Don't even tell familiar lies, like "Wonderbread builds strong bodies 12 ways"

    • Bankrupt the company

    • Sell of the pieces at a profit

    • When called a raider, a pirate, a thief, a crook, or a rapacious psychopath, simply point a finger and ssay, "The unions did it."

    This gives a whole new meaning to the phrase, "Twinkie defense."

    Very crankily yours,
    The New York Crnak

  • Gandalf on November 16, 2012 4:16 PM:

    TC after reading that article you sited it seems to me that it's hard to assign blame to just the hedge and private equity outfits. There's a whole lot of shenanigans by all sides involved.

  • Ted Lehmann on November 16, 2012 5:12 PM:

    I'm with the workers at Hostess, but for crying out loud, it would be nice if Trumpka actually said something about the situation instead of merely mouthing union platitudes. From what I've gathered today, I haven't gathered any solid information.

  • john sherman on November 16, 2012 6:11 PM:


    Experiments show that Twinkies will outlast cockroaches, so the smart business type would buy up all possible Twinkies, stuff them in a warehouse and sell them off over the next few decades.

  • Randy on November 17, 2012 12:48 AM:

    How ironic that Hostess goes belly up just as pot is becoming legal.

  • ComradeAnon on November 17, 2012 1:26 PM:

    Randy-on Etsy of course.