UPDATED YET AGAIN 11/16/12 4:30 PM: I last updated this article after a sleepless night, and I was a bit, well, cranky. If the Update has a nasty tone, and that last line certainly does ("So next time..." and so on), I apologize.
UPDATE 11/16/12 9:17 AM: When I wrote this article, there was still hope that the company could be saved. No such luck; this morning it appears to be all over. Management is saying that they're going to cut and run, selling off Hostess' assets. Which means that Twinkie the Kid may ride again, since Twinkies and their name/logo are one of the company's most valuable assets. So next time you bite into a Twinkie made by Sara Lee or Little Debbie or whoever, spare a thought for the unemployed whose young you're eating. Isn't that a pleasant thought to start the day?
A report on the closing: "Hostess Brands Says It Will Liquidate" (Dealb%k)
Hostess' press release: "Hostess Brands to Wind Down Company..." PR Newswire, United Business Media)
In case you haven't heard, a bitter struggle between labor and management may result in the death of Hostess, makers of Twinkies, Dong Dongs and Wonder Bread. While I don't much care for the confections (I can't really eat most of them) I do care about the labor, about the potential job loss, about the loss of income for thousands of Hostess workers across the country.
A friend of mine posted this to Facebook:
"I have never been a fan of unions. I grew up in a union house and saw how my father's union nearly cost him his life. Now, it seems that union overreaching may kill Twinkies and Wonder Bread. Where are the howls and screams about the taking down of America by unions?"
He also posted a link to this article on MSN: "Hostess may close down for good if workers do not return by Thursday"
What then followed was a bit of a discussion between us regarding these issues. My final point was this:
"I think the company and the union are being a bit bone-headed...but I am not going to morn the loss of Twinkies or Dong Dongs. I can't eat 'em, anyway."
I've done a bit of research since then. I've read a lot about this on-line and made notes on half a dozen articles, including several "sources" that I would never use or quote, both right and left. And I've changed my position.
If the company fails, it'll be nearly all management's fault.
Hostess is already in bankruptcy, and is now controlled by Wall Street interests that seem to be intent on wringing every last cent from this company before tossing it away. If I thought that any of these Wall Street companies had the slightest interest in truly saving Hostess, I might say (as I previously said) that Hostess and its labor force should work together more closely to find a way to keep Twinkie the Kid in the saddle. But it doesn't appear that management has any real interest in saving the company; rather, I think they'd rather run it into the ground, take a short-term profit and exit stage right.
Recently, the company's workers have rejected the company's "last, best and final" contract offer...with a 92% vote. That's important, so I'm going to say it again: 92% of Hostess workers voted to reject the company's "last, best and final" offer.
You can't blame this level of worker dissatisfaction on the union; just the same, I'm going to quote the Union president (Frank Miller of the Bakery, Confectionary, Tobacco Workers and Grain Millers):
"Our members have seen this company squander more than $50 million that it was contracturally obligated to put towards our members' pension...have seen this company attempt to give millions of dollars in unseemly and unjustified bonuses to mamagers and supervisors in the midst of this bankruptcy...(have) reviewed the analysis of this company's busness plan provided by a highly-respected financial anylist which showed that the plan has little or no chance of succeeding in saving the business but would provide investors with a windfall..."
His statement concluded:
"Our members know that this is a company controlled by Wall Street private equity and hedge fund firms, whose sole objective is to maximize their own returns, not rebuild the company for the long haul."
The company has already been through bankruptcy. During that round of reorganization, the company was surrendered to Wall Street, which has acted to squeeze a return on their investment without providing for the future of the company. Or the workers. The workers have looked at the company's actions, at it's offer, at it's attitude and resoundingly rejected them all. It would be silly to assert that they don't know what's at stake. I'm sure they know exactly what's at stake, what they're risking, and I'm sure they're very aware that the loss of they're jobs is not only possible but likely. And they still rejected the company's offer.
I don't see that you can blame the union for labor dissatisfaction at Hostess, and I don't see that you can use this as an example of how organized labor is dragging America down.
I hope that management threats against union jobs turn out to be just so much posturing, but right now things don't look good. I hope that management and labor will work together to keep Hostess Twinkies and Ding Dongs and Ho-Hos on store shelves.
But I still can't eat 'em.
The Blues Viking
The opinions here expressed are mine and if you don’t like them you can get your own damn blog.
18,000 Hostess workers facing termination (KSDK.com, St. Louis)
Hostess workers in St. Louis laid off after supporting nation-wide strikes (KMOV.com, St. Louis)
Hostess Workers Continue Strike Despite Threats of Closure (NewsOn6.com, Oklahoma)
Hostess workers will lose, any way you slice it (Portland Press Herald, Portland Maine)
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