“…Hostess Brands, Inc. has been forced by a Bakers Union strike to shut down all operations and sell all company assets.”-Gregory F. Rayburn, CEO Hostess
18 November 2012, the iconic maker of U.S. snack foods, Hostess, is no more! It’s being shut down and sold off by the corporate executives who ran it into the ground!
No more Wonder Bread, Twinkies or Ding Dongs for Pocatello, Idaho!
Oh, but many anti-labor commentators are blaming the unionized employees. Bull shit, Hostess can’t survive a strike?
No more Eddy's Bakery in Chubbuck, Idaho!
A Forbes article points out that it’s the corporate management that ran Hostess into the ground, not the unionized employees. This happened because the corporate leaders tried to make up for dropping profit margins by running the company on debt financing.
Also, after the 2004 Interstate Bakeries bankruptcy (which the company emerged from in 2009, renamed officially as Hostess) the highly educated company leaders made no attempts to change how Hostess did business: “The obvious problem is leadership kept trying to sell the same products, using roughly the same business model, long, long, long after the products had become irrelevant.”-Adam Hartung, Forbes
Sales were constant, but only because Hostess execs kept prices artificially low, which lead to loss of profits. This was because U.S. consumers are not willing to pay more for junk food.
By 2011 the bad economy finally affected Hostess sales; according to Mintel in the past year Twinkie sales dipped 0.8%, Ding Dongs fell 8.7%, Ho Ho’s down 6.3%.
Back during the first bankruptcy the unions made $110 million USD worth of concessions. In May and October 2012, a bankruptcy judge gave Hostess the authority to impose more concessions by cutting pay and benefits, that’s what lead to the worker strikes. Hostess was enacting more concessions without input from employees!
The Teamsters Union blamed the need for concessions on incompetent corporate officials: “Unfortunately, the company’s operating and financial problems were so severe that it required steep concessions from a variety of stakeholders but not all stakeholders were willing to be constructive.”-Ken Hall, Teamsters General-Secretary
According to a CNN report, the average Hostess worker made $20 per hour (and many Hostess factories are located in areas where $20 per hour is barely a living wage). This is starting to look like just another step in unAmerican Corporate America’s plans to drastically reduce the cost of labor across the country, as part of the long term plan to return the United States to top export status. The problem is that the cost of living is still too high, even for many making $20 per hour. The elitists will make huge profits off their export sales, while the domestic economy will continue to fall (more Sears & Kmart closings to say the least) because more and more workers in the U.S. can’t make enough money even for basic necessities.
Don’t worry, your favorite Hostess junk food might survive, as the rights to those brands are being sold off. But will you be able to afford them?
The most recent Christian Science Monitor report says that Mexican snack food giant (and world’s largest bread maker), Bimbo, is considering buying the rights to most of the Hostess brands. Bimbo took over Sara Lee, Entenmann’s and Thomas English Muffins in 2010 (did you hear about that one? Start calling them Mexican Muffins). They also tried to take over Hostess a few years ago. If Bimbo does buy the Hostess brands analysts say most of the jobs will be in Mexico.