Photo Credit: Bestuff
Hostess Brands, after 82 years in business, announced today that it's closing its doors (1) because it failed to reach an agreement with Union thugs on concessions that would have enabled it to continue in business. 18,500 workers will now have a Sno-balls chance in hell of finding work this Christmas - what morons.
Some union apologists will instead blame the closing on greedy Capitalists, although shutting down a company means an end to their paychecks as well. Others will try to put the blame on a diet-conscious public, however other junk-food manufacturers are doing fine and will in fact be looking to buy Twinkies (2) and other Hostess products.
Now why would other companies want to buy the same products if Hostess is unable to make money with them? Simple: Unions. Hostess employees are unionized while most of its competitors aren’t. Consequently other companies do not have draconian union rules, pension costs, and low productivity. Would you believe that drivers that were delivering bread would refuse to carry the cake products and vice-versa. This featherbedding tactic was used to force the company to employ twice as many drivers as actually necessary.
If you want to succeed in business, the first rule is, never allow unions to come into your business. I would shut down my business right there and then rather than wait for the union vampires to slowly suck the blood out of my business for years.
In case you are wondering what the company wanted from the workers: a baker making $1,000 a week would have to take a pay cut of $80 and contribute about $20 more toward his healthcare costs. Now that baker is taking a $1,000 per week pay cut - what a maroon.
By the way, this is the same union (Bakery, Confectionery, Tobacco Workers and Grain Millers) that forced the closing of the Stella D'oro biscuit factory in the Bronx, see my 2009 article Union Kills Bronx Stella D`oro Plant.
For more information about Hostess' labor problems go: www.hostessstrike.info.
A small union's stubbornness in contract talks with Hostess is being blamed for the shutdown of one of America's snack food icons, the loss of 18,500 jobs just before the holiday season and much-needed tax revenue from hundreds of plants and shops across the country.
The privately-held company had reached a deal with the Teamsters, but a smaller union representing bakery workers refused to agree to concessions, prompting the mass layoffs and closing down of hundreds of plants, bakeries and delivery routes. That prompted harsh words from both the company and from Teamsters officials.
"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Chief Executive Gregory Rayburn said in a statement. "Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders."
Hostess Brands, which Friday announced it was going out of business, was touted a few years ago as an example of a successful corporate turnaround story. The company, which has been a train wreck for years, does have some valuable brands that may be of interest to other companies. In other words, don't write the obituary for the Twinkies just yet.
Groupo Bimbo SAB, the world's largest bread baker, might be interested in acquiring some if not all of Hostess's assets, which include creme-filled sponge cake and other Hostess products such as Sno-balls and Ding-Dongs. Though most people might not be familiar with the Mexican company, they are no doubt familiar with its brands, which include Entenmanns's baked goods, Stroehman bread and Thomas' English muffins.