The Most Tragikal Hostess Debacle. Act II. Enter: Looters, Zombies, Unions.

20121117-083130.jpgI heard about this when I was running errands yesterday.

It seems that the Hostess – producers of iconic products – has now gone completely bust because, in negotiations with the company the baker’s union demanded too much.

I grew up in a town heavily dominated by unions and saw this happen again and again.  Union bosses make demands that are too high. The company folds or moves.  Thousands lose their jobs.

Mind you, I haven’t eaten anything made by Hostess for many years, but I am now angry that I can’t.  I am also angry that so many have lost their jobs.

18,000 jobs lost.  “Merry Christmas!  Here’s your pink slip.”

But that won’t be all.  All the people who surrounding the company, such as those who supplied the flour, drove the trucks to deliver the flour, etc., will take a hit as well.  These labor disasters have wider consequences.

This doesn’t sound like “creative destruction” to me.

It could be that some other company will buy the brands and produce them, but in the meantime, there is a hole in the shelves being filled with pink-slips.

At the grocery store I saw that the shelves, which I invariably avoid, where the Hostess stuff is usually found, and by me ignored, was entirely cleaned out except for two lone packs of cupcakes (photo above).  It gave me the creeps.

I am searching for some sort of allegorical TEOTWAWKI meaning to all this.  Perhaps you readers can help me.  First, we have iconic products which we take for granted.  The company did not adapt properly to the changing circumstances.  The unions, playing the selfish card, kills the goose, as it were.  The shelves are cleared out.  Somewhere in the back of my mind, there should be zombies involved in this vision.

I wish now that I had Twinkies in my bug-out-bag.  They have a half-life of about 200 years and I could trade them for ammo.

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About Fr. John Zuhlsdorf

Fr. Z is the guy who runs this blog. o{]:¬)
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64 Responses to The Most Tragikal Hostess Debacle. Act II. Enter: Looters, Zombies, Unions.

  1. Southern Baron says:

    Probably the result of sabotage by a certain Debbie, whose “innocent little girl” persona is but a cover for a vicious plot to take over the world.

  2. bookworm says:

    “Somewhere in the back of my mind, there should be zombies involved in this vision.”

    Have you seen the movie “Zombieland”? It’s about four people wandering about the U.S. after a zombie apocalypse. They don’t trust one another at first so they identify themselves by their hometowns rather than by name. Among them is “Tallahassee,” played by Woody Harrelson, who craves Twinkies and at one point, stumbles across an abandoned Hostess truck only to find, to his great disappointment, that it’s full of Snoballs. If you can tolerate some foul language, it’s actually not a bad movie, since it doesn’t take itself too seriously.

  3. Charles E Flynn says:

    From Twinkie Maker Hostess to Close, by Rachel Feintzeig, Mike Spector and Julie Jargon, for the Wall Street Journal:

    The company’s burdensome debt traces back to Hostess’s first trip through bankruptcy in 2004. Missteps by a private-equity firm, hedge funds and managers since burdened the company, despite its more than $2 billion in annual sales.
    “I think there’s blame to go around everywhere,” said Chief Executive Gregory Rayburn, a turnaround expert hired this year.
    Increased costs for ingredients and fuel, a failure to adjust to demands for healthier foods, and the U.S. recession combined to weaken Hostess.

    ******

    Suggested Google search:

    Hostess mismanagement

  4. An American Mother says:

    Of course mismanagement was involved. That’s a given. No company puts itself into the position of being hostage to a union without mismanagement.
    The recession didn’t help, but they were caught overextended when it hit. Sometimes management thinks the good times are going to go on forever and doesn’t plan for the lean years.
    But the Chapter 11 trustee and the court had put together a viable plan, which required a short-term 8% pay cut to the workers in exchange for 25% ownership of the company.
    The union pulled the trigger and killed the reorganization plan.
    Now instead of an 8% pay cut, the employees have a 100% pay cut. And the union bosses, keeping their handsome salaries and benefits, move on to the next victim, leaving the hourly employees holding the pink slips.
    Nice work if you can get it.

  5. Therese says:

    “Now instead of an 8% pay cut, the employees have a 100% pay cut. And the union bosses, keeping their handsome salaries and benefits, move on to the next victim, leaving the hourly employees holding the pink slips.”

    May God bless and preserve everyone now facing this kind of situation in the workplace. What’s happening is simply insane. (And isn’t a particular type of insanity also another name for evil?)

  6. Fr AJ says:

    I heard a clip on the radio yesterday of Mrs. Obama at some point in the past discussing putting warning labels on Hostess products concerning calorie and sugar contents so I doubt the gov’t will bail them out like GM.

  7. majuscule says:

    I had no idea what TEOTWAWKI referred to. Certainly not a Native American on the way to sainthood–I knew that much. In my attempt to educate myself I found this.

    http://survivalcache.com/murphys-laws-of-teotwawki/

    Reading this blog always leads to SO much more!

  8. LisaP. says:

    Maybe it’s time people started organizing unions to protect them from the unions.

    For what it’s worth, “When the zombies come” is well used shorthand in my family. My kids don’t even blink at the reference,

  9. Supertradmum says:

    This horror of both mismanagement and greed effects my hometown area. The need for unions is long gone. Americans are acting like the Greeks in neverland, wanting without thinking of the.common good..a lost philosophy.

    [It’s nice to see you posting again.]

  10. Supertradmum says:

    Ps can twinkies be used as ammo?

  11. Kathleen10 says:

    Supertradmum, that was my suggestion too. Leave cupcakes out on your counter for two weeks. Great bunker busters.

    I cannot imagine life without availability of Twinkies, cupcakes, Snowballs, and Wonder Bread. I feel as if American life has become a version of Chinese Water Torture, all the things you love distorted or destroyed by socialism, evil, greed, avarice, lust, indifference, ignorance, apathy, and other related sins.
    I’ve become a cultural downer. I don’t post much anymore.

  12. Stvsmith2009 says:

    I really don’t know why people are surprised by this. We have seen the same thing occur in the recent presidential election. People want what they believe they are entitled to, and they don’t care what it costs or who it affects. They want “theirs” and they want it now. Yes, the union big wigs get the blame and rightly so. But, consider that the blame also lies with the rank and file, the ordinary workers who were the ones that would not agree to the pay cuts, etc., and then decided to strike. Common sense goes out the window when greed, especially greed for self takes over.

  13. TomG says:

    Apparently the Teamsters, the largest union presence in Hostess, agreed to the deal proposed by the company and were critical of the Bakers’ union for rejecting it.

  14. Dr. Eric says:

    The problem couldn’t be that dietary habits have switched and people, such as Fr. Z, haven’t eaten a Twinkie in years. Lack of demand equals lack of production equals snack cake factories going out of business.

    You can blame unions, management and Mrs. Obama, but the fact is that people don’t eat snack cakes like they used to.

  15. Peggy R says:

    Others have covered this well. Here we have a company in bad financial shape, trying to improve, in an economy that is in a general downturn, while its products are part of a class of food demonized by the First Lady of the US, and while the President’s massive burdens and costs are due to hit employers everywhere. Sure. Good luck and all that.

    And the union thought it was smart to strike and demand more. I read that the Teamsters members at Hostess saw the writing on the wall and refused to strike. Their fellow laborers of the AFL-CIO Bakers’ etc Union blew it for all of them.

    These poor folks are going to have a hard time finding work in this economy. This is only the beginning of the slaughter of the employed to come.

  16. New Sister says:

    Michelle Obama must be giddy about it.

  17. jilly4ski says:

    So twinkies which are supposed to survives a nuclear holocaust die one month before the word is supposed to end. Well played Mayans, well played. =D

    That’s ok,I prefer Little Debbies anyways.

  18. 1173justin says:

    I’ve heard it stated that at TEOTWAWKI there will only be giant cockroaches armed with Glocks eating Twinkies. I suppose they’ll all starve to death now. The Glocks will still be ok though. [Glocks eat Twinkies? Who knew.]

  19. Charles E Flynn says:

    @Dr. Eric,

    The turnaround plan:

    Twinkie II: a whole wheat, high-fiber twinkie with Greek yoghurt filling and flax seeds on top. Requires refrigeration.

  20. Laura98 says:

    I joked with a friend about this being a sure sign of the coming Apocalypse … the 5th seal or something like that. Didn’t think Fr. Z would be making any sort of similar reference! LOL On a serious note, this bums me out. First for all those people losing their jobs, and also because every once in a while I would enjoy a fattening-sugary treat with way-too-many-calories. Now my choices are more limited… *sigh*

  21. majuscule says:

    So Hostess Twinkies ® and CupCakes™ have been demonized by society. (Maybe demonized is not quite the word to use–have to be careful of the context around here LOL!)

    If that’s the case I wonder why so many people are fondly posting and sharing pictures of these things on their Facebook pages?

    Here’s a list of these and other products that may be off the shelves forever:

    http://blogs.wsj.com/corporate-intelligence/2012/11/16/its-not-just-twinkies-all-the-products-made-by-hostess/

  22. catholicmidwest says:

    Supertradmom,
    Yes, but only if you have a Twinkie cannon.

  23. majuscule says:

    The turnaround plan:

    Twinkie II: a whole wheat, high-fiber twinkie with Greek yoghurt filling and flax seeds on top. Requires refrigeration.

    St. Peter, St. Elizabeth of Hungary and St. Nicholas of Myra pray for us.

  24. acardnal says:

    not sure how that happened . . . was just posting a url link to the video. sorry.

  25. LisaP. says:

    “Well played, Mayans. . . ”

    That was priceless.

  26. LisaP. says:

    Kathleen10,
    Is there some problem with being a cultural downer? Shoot, I think that’s my vocation!

  27. wmeyer says:

    Not shocking, and I expect we will see more of this.

    The general population, being largely ignorant of economics and of the operation of companies, sees the owners of a company like Hostess as “the rich” people the MSM keeps blathering about. However, in general, corporations operate on roughly 7-8% profit, when well run. And for most, labor costs are the largest single item in overhead. If the trustee and the court found an 8% cut necessary, and the teamsters ratified it, believe me, there was little room to maneuver. And unlike the general population, union leaders, I am confident, know a good deal about this sort of situation, as they have so often been involved in Chapter 11 cases.

    It’s unfortunate for the workers that that this comes so close to Christmas, but there is never a good time to lose your job. I pray for the workers, and I pray also that the union management may learn something from this, and be more merciful–and realistic–in the next similar case.

  28. mamajen says:

    I think the unions have really stepped in it this time. In some ways Twinkies are rather trivial things, but they’re something that everyone can relate to. And suddenly they’re gone. I’m sad for all the jobs lost, but hopeful that a lot of people finally get the picture as a result.

  29. Charivari Rob says:

    “I wish now that I had Twinkies in my bug-out-bag. They have a half-life of about 200 years and I could trade them for ammo.

    Wasn’t that you in that truck commercial during the last SuperBowl?

  30. NBW says:

    Just a crazy thought…
    what age group would be the majority eating Hostess products?… Children.
    What are we lacking here in the U.S.?… Children. Perhaps the unions would like to take a crack at Planned Parenthood and we can watch them go bankrupt in a few years or less. I send my prayers to all those poor people who have lost their jobs because of union greed.

  31. Jerry says:

    I’m sad to see Drake’s coffee cakes and several brands of bread I like, including Beefsteak, on the list of affected products.

    Now that Tastykakes are being distributed outside the mid-Atlantic area (we can even get them in OK now!), Hostess’ loss could be Tasty Baking’s gain. I like Tastykake pies much better because they don’t have the sugar coating and the filling is less sweet. They do contain HFCS and sugar, but they are well down on the list of ingredients.

  32. benedetta says:

    I really feel sad for that huge number who are now adding the already high number out of jobs. As to Twinkies, if I want a “cream filled snack cake” I will make it myself…like just about all else in the Catholic ghetto these days it seems….DIY.

  33. PostCatholic says:

    Plenty of blame to go around on this one. Your statement that you avoid the Hostess display and haven’t eaten their products in years is most of what is to blame with the shuttering of the company. Neither have I. I don’t want partially hydrogenated, insulin shock inducing, highly bromated, FD&C Yellow Number 934 colored carcinogens coursing my veins and neither does my doctor.

    It’s up to workers to make products, but it’s up to management to create products customers want to buy. Hostess clearly hadn’t kept up with consumer demand. The vulture capitalists didn’t help. It will be interesting to see if they walk away with a profit or whether they miscalculated. A cynical part of me thinks they wanted to clear away the worker issues so that they could sell off intellectual property, equipment and real estate unencumbered; another part of me wonders if that’s enough to erase their debts and return the shareholders anything at all.

    I expect that the products and brands are worth a pile to Hostess’ competitors, so I am not worried that the Twinkie will pass to oblivion. It is horrible that so many families are paying such a steep price for mismanagement, though. Winter, and the holidays, and no jobs, is indeed tragic. Or “most tragikal” if you prefer.

    The national union headquarters for the “Bakery, Confectioners, Tobacco Workers and Grain Millers” is right next door to the supermarket where I shop each. I know this because they have an impossibly long sign in front of the building. I will have to ask around and see if anyone in my social circle works there and can provide the inside perspective on why the union was the last nail in what seems to have been a quite well-constructed coffin for Hostess. The press release there was a bit illuminating: http://bctgm.org/PDFs/HostessLiquidation11_15_12.pdf

  34. Gail F says:

    “But the Chapter 11 trustee and the court had put together a viable plan, which required a short-term 8% pay cut to the workers in exchange for 25% ownership of the company. The union pulled the trigger and killed the reorganization plan. Now instead of an 8% pay cut, the employees have a 100% pay cut.”

    It wasn’t “the” union, it was one of the many unions this company had among its employees. The Teamsters actually came to an agreement; this was the bakers’ union. Around here (Cincinnati) employees have said in interviews that they blame the company, and that “they” shouldn’t have closed right before Christmas. I can’t fathom not being angry with a union that caused the company that employed you to close. Hostess was quite clear that they would close if there was a strike. The company did not close because people don’t buy Hostess products anymore; that’s simply not the case.

  35. Dr. Edward Peters says:

    Another link with my youth is severed. The Hostess shelf at our store was bare today. How sad. The day before, as it happened, we bought two boxes of Twinkies, before thews hit. I’m gonna share them with my kids, and the neighbors’.

  36. torch621 says:

    Company is bankrupt, comes up with a plan to keep it viable, union doesn’t like, drives company out of business and costs 18,000+ jobs.

    And yet, there will be many who reflexively support the union, including many Catholics. It saddens me that so many cannot see the bigger picture.

  37. Edprocoat says:

    A few thoughts, “dietary needs change” for every person that has “matured” past the point of snacks there is a child to eat that twinkie. “I doubt the government will bail them out like GM” There actually is a petition on Obama’s website for suggestions that asks the government to take over Hostess. I just wonder how they will cook them with solar power and what their products will taste like without sugar or fat in them. But at least there will be some spatula ready jobs to fill.

    ed

  38. Gratias says:

    The Unions won. The workers lost. Enjoy the fruits of Labor. Arghhhhh.

  39. James Joseph says:

    In other news:

    Giant grocery is firing every single meat-cutter in the 147 store chain on December 26th, 2012. The retail giant (if you will) is moving it’s meat-cutting operations to a centralised facility alla Walmart. You see apparently $10 to $15/hour is too much money to be paying family men.

    Hoo-ray for industrialised vaccuum packed beef proteins!

    Boooooo…. for the nice artisan butchers and meat-cutters who know their way around all the various muscles and bones.

  40. SKAY says:

    “And the union thought it was smart to strike and demand more. I read that the Teamsters members at Hostess saw the writing on the wall and refused to strike. Their fellow laborers of the AFL-CIO Bakers’ etc Union blew it for all of them.”

    Richard Trumka leads the AFL-CIO. He often brags about his access to THIS White House and Obama. In fact–they just had a big meeting at the White House after the election.
    I’m sure the union members will be taken care of so of course they will not blame the union.

  41. Kerry says:

    Regarding the above comment, perhaps as the TWo (“That ‘Wousy 2nd Termer Obama”) and Trumka already had the votes and money respectively, why not just scuttle the boat? Did Hostess send $$ to the other party?

  42. Kerry says:

    There will be some sweet irony if Hostess were to be rescued by a venture capital company? As it is, they have somehow become a former solar panel company.

  43. annmac says:

    Father..please explain “bug-out-bag”…

    Unions have never done good by me. When I was in my early twenties, I worked in a factory that went on a bogus strike; we ended up settling for less than what was originally offered. In recent years, I belonged to CSEA..who did nothing to protect my job. My take on unions and their leaders is this: everyone is out for themselves…and if dragging you along furthers their cause..then great, if not then you are just collateral damage. I am tired of being collateral damage. JMO

  44. Kerry says:

    Here is a long, illuminating article on Hostess, money, deals and the Dem. dealers. Cameo appearance by Dick Gephardt. http://www.zerohedge.com/news/2012-11-16/hostess-liquidation-curious-cast-characters-twinkie-tumbles

  45. majuscule says:

    anmac–

    I believe a “bug out bag” contains the essential items you will need for TEOTWAWKI. If you live in an area where you may need to flee (bug out), you grab this easy to carry (backpack maybe?) bag and “get out of Dodge”. It’s understood that you have carefully chosen items that will help you survive. Multi use items are an excellent choice i.e. Twinkies could be used as a weapon or food.

    This could also be a help in case of a natural disaster like a hurricane or an earthquake.

  46. wmeyer says:

    Not sure if it is a reference for Fr. Z, but “bug-out bag” is a phrase I think I associate with Heinlein.

  47. Suburbanbanshee says:

    There was an excellent book written several years back, by a foodie who planned to scoff but ended up awed, about all the ingredients used in a Twinkie, and all the amazing industry and knowhow that goes into making those ingredients and baking them into a Twinkie. It was called Twinkie Deconstructed, by Steve Ettlinger. (Make sure you get the unabridged version, if you listen to the audiobook from the library.)

    And now it is all gone. The treasures of the Indies, the fruit of the fruited plains, the salt of the earth, and the industrial compounds meant to keep food safe — gone. Eheu!

  48. Well if we don’t have Twinkies, there is always this

    http://www.thinkgeek.com/product/e9aa/

  49. Bea says:

    quote
    “I am searching for some sort of allegorical TEOTWAWKI meaning to all this. Perhaps you readers can help me. ”

    IMHO
    It’s the endless search for something “New”.
    The Hostess employees and/or owners have no sense of Tradition:
    no devotion to a previous way of life. It’s all profit. What’s in it for ME. They want a “new life=$$)
    To heck with devotees to Twinkies, Ding-Dongs and other Hostess products.
    It’ s going the way of Hydrox Cookies, The way of the Horse and Buggy.
    The way of a quiet way of life.
    No more horse and buggy and they called it “progress”
    Now we have oil dependency, smog, road rage and they call it “progress”

    New things that tickle the ears.
    The “New Mass” (and people no longer believe in the Real Presence)
    The “New Rosary” (and people no longer say it)
    The “New Evangelization” (and people have lost their Faith)
    The “New Catechism” (and people no longer know Truth)
    Everything is relativism no concrete Truths.

    That’s my allegory on TEOTWAWKI and Hostess Products.

    My husband still hopes for the return of Hydrox Cookies
    My Friend’s husband is already lamenting his loss of Wonder Bread.
    Me? I bought and froze extra boxes of Twinkies and Ding Dongs

    And all of us, my Faithful Catholic friends, have been lamenting for 50 years TEOTWAWKI , in our world of Our Wonderful Catholic Church.
    The Traditional Catholic Church has much in common with Hostess Products. TEOTWAWKI.

  50. Marie Teresa says:

    My mother never bought Hostess snacks for us. Once, she bought Wonderbread but even that was seen as an extravagance.

    My own children grew up without Hostess because the sweets were too expensive! They were 3 times the cost of the Little Debbie copycats. Now, my children think Little Debbie is the iconic product.

    Unions have maybe done some good, but they seem to devolve to power run-amuck. In the 1980’s, our community witnessed the closing of a much-needed local industry due to union demands. After nearly 100 years with no union, it lasted another 7 years once the union stepped in. The owners couldn’t afford the increases and went out of business completely. No sell-off, just closed their doors. Unionizers from the cities couldn’t imagine that wages are so low in rural Appalachia.

  51. Supertradmum says:

    hey…The largest bread company in the world…the Mexican company Bimbo whose trucks are seen all around my hometown area is making a bid for Twinkies and others on the Hostess list. Do not despair.

    [Oh PLEEEEEZ let this happen. Pretty PLEEEEEZE? Hostess by Bimbo! Cupcakes by Bimbo! Ding Dongs by Bimbo!]

  52. wmeyer says:

    Imagine: Bimbo Twinkies

    It seems a natural pairing… ;)

  53. acardnal says:

    LOL wmeyer.

    I heard on CNBC that a bankruptcy judge has just ruled that the company try to work things out via mediation with the lenders and unions before going further.

  54. wmeyer says:

    I heard on CNBC that a bankruptcy judge has just ruled that the company try to work things out via mediation with the lenders and unions before going further.

    And we know the name for repeating actions and expecting a different outcome. The union is likely to treat this as a bargaining move, not a real closure, in which case, they are unlikely to change their position. Given that the Teamsters did accept, and apparently made known their displeasure to the bakers, I would not hold out a great deal of hope.

  55. An American Mother says:

    Mediation: leading two horses to water and trying to make them drink.

  56. wmeyer says:

    Mediation: leading two horses to water and trying to make them drink.

    As opposed to biting one another? I think if I were the owner, I would have little motivation to make any further compromise.

  57. Supertradmum says:

    Some of the problem has to do with sugar unions in Florida as well….really, we are in for a BIG depression and these guys are trying to re-arrange deck chairs on the Titanic by talking with unions-the icebergs in the ocean of commerce. Go Bimbo, and let Twinkies and bread be in the same strucks–one of the stupid union rules was that truck loaders would not be allowed to take Twinkie and Wonder Bread in the same trucks to the same destinations. Duh, more jobs, more gas, more nonsense…

  58. Supertradmum says:

    oops trucks, not strucks; English keyboard and old fingers….sigh, why can’t all computers have the same keyboards?

  59. Daniel says:

    From what I’d read, the recently hired chief executive’s specialty is liquidations; and executives salaries were going up. The unions had already agreed to past concessions, but workers were wondering why their wages were being cut again with so much money going to executives leading the company into bankruptcy. Per one account, Dick Gepherdt’s sone Matthew has a spot on the board of directors worth $100k per year. In the meantime, there has been no funding of pension plans? So even past agreements worked under for years would seem to not be binding, as there goes your retirement plans.

    The current creditors may have acquired their debt for a fraction of what it’s worth. I’d wonder if there aren’t some that had been selling the stock short prior to all this news breaking. Hedge funds likely have made their profits whether stocks go up or down, while mutual funds (owned by many pension plans) actually holding the stock wind up losing either way. This is all the fault of greedy workers unwilling to take a pay cut?

  60. acardnal says:

    Well, looks like the mediation talks broke down. Liquidation will commence.

    News Alert
    from The Wall Street Journal
    Hostess Brands will continue down the path to a full liquidation after a last-ditch mediation session failed to save the Twinkie maker.
    http://online.wsj.com/article/SB10001424127887323713104578131502378821868.html?mod=djemalertNEWS

  61. wmeyer says:

    Daniel, do you really suppose that government is the only place there is corruption?

  62. Mike says:

    From what I read, the bakers union knew their strike would destroy the company and cost everyone their jobs.
    If the union really represented the workers’ interests, they would have approved the contract and let everyone know they should look for jobs elsewhere if they wanted higher pay. At least that strategy would have (1) let their members continue to be work and be paid while they looked for better jobs, which may or may not exist (2) avoided dumping everyone into the labor market at once, depressing the local wages (3) not destroyed the jobs of those who were still willing to work under the new contract.
    But the union was looking out for its own institutional interests, and the interests of its leadership. The interests of its members, not so much. It’s not a new phenomenon.