Hostess is going out of business, but Twinkies will live forever
Let’s be clear up front: For better or worse, Twinkies aren’t going anywhere. (You may make your own jokes about their longevity at this point.)
Hostess Brands — the company that makes Twinkies and Ho-Hos and Drake’s and Wonder Bread and all of the other archetypical Americana that we love to hate and love to eat — is going out of business and selling off its assets. All of the brands I just listed will exist again, and soon, but under different management — and apparently with an entirely different workforce.
Earlier this year, the company announced that it was filing for bankruptcy. As Business Insider noted at the time, much of the debt the company held was owed to the unions that represent the company’s workers in the form of outstanding healthcare and pension obligations. When Hostess moved to enact wage and benefit cuts among its workforce, the workers struck.
Hostess said a national strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union that began last week had crippled its ability to produce and deliver products at several facilities.
The liquidation of the company will mean that most of its 18,500 employees will lose their jobs, Hostess said on Friday.
The 82-year-old company said it took the decision to shut down after determining that not enough employees had returned to work by a deadline on Thursday.
The company, which filed for bankruptcy in January for the second time since 2004, said it had filed a motion with U.S. Bankruptcy Judge Robert Drain in White Plains, New York, for permission to shut down and sell assets.
The company settled disputes with its other main union, the Teamsters. The Bakers (as the BCTGM is also known) suggest that the problem wasn’t the workforce, it was the management. Union President Frank Hurt:
The crisis facing Hostess Brands is the result of nearly a decade of financial and operational mismanagement that resulted in two bankruptcies, mountains of debt, declining sales and lost market share. The Wall Street investors who took over the company after the last bankruptcy attempted to resolve the mess by attacking the company’s most valuable asset — its workers.
They sought to force the workers, who had already taken significant wage and benefit cuts, to absorb even greater cuts including the loss of their pension contributions. I have said consistently throughout this process that the BCTGM is a highly democratic organization and that our Hostess members themselves would determine their future. By an overwhelming majority, 92 percent, these workers rejected the company’s outrageous proposal, fully aware of the potential consequences.
For the workers, those potential consequences are dire. As noted above, over 18,000 people are expected to lose their jobs as a result of Hostess shutting its doors. Once the brands and assets are sold, some other manufacturer will start cranking out “Twinkies” (rest assured, physicists) and “Wonder Bread.” The only thing that will have changed is that the people making them will be making less money and undoubtedly have worse benefits. For all of the concern over Hostess’ products, it wasn’t the sugary starches that couldn’t compete in the marketplace, it was the traditional employer-labor relationship that didn’t fit with the year 2012. Food quality won’t get better, but job quality will get worse.
We therefore humbly suggest that if in the future you pine for Wonder Bread, get out the breadmaker. And if you want a Twinkie, here’s a DIY recipe.