The Twinkie Defense


Seemed like ab appropriate title considerring what I am seeing…

The right is bemoaning the news that Hostess Foods, yes- the maker of twinkies is filing for bankruptcy (oh dear god- what are we going to stuff the fried turkey with this year billy bob?! ). And of course they are berating the evil unionized workers for daring to strike. It’s all the unions fault (and of course Obamas for the economy).

So first off- Hostess Brands and their largest (and most powerful union- the Teamsters, had already reached an agreement. And the Teamsters had urged the Bakery Union to hold a secret ballot this week on whether to continue the strike (it is unclear from press reports if this had happened and if so what the outcome was).

So let’s see. Hostess Brands, which is currently a privately held company, reports a whopping $1 Billion in debt. Almost all of which is unsecured debt that they owe to workers pensions. Let’s not be disingenuous here. Millions of americans give a huge portion of their lives to corporations, to government, to the military- accepting low wages for the promise of a pension fund. It is, in a theory, a win win for both sides. The economy of scale it gives the employer in terms of investments means they suge huge cost savings over what they would have to pay if the workers themselves had to arrange for their eventual retirement. And workers benefit by not having to worry about it, not having to try and figure out how to invest- often with too little capital to do so efficiently.

And of course- this is not Hostess’s first foray in to bankruptcy- having operated under bankruptcy protection from 2004-2009. (2009 is when they re-emerged as the privately held company Hostess Brands, having been a publicly traded company, Interstate Bakeries, from 2001 on). It is worth noting the company, in its many incarnations over the years, has bounced back and forth between being privately held and publicly traded.

Really, once you start looking closely at the history of the company, it is an ugly one. A viscious cycle of going public, gobbling up competitors, falling apart, “investors” buying up the crashed stock on the cheap, going private, selling off assets and firing employees, repeat. expect different reults.

And of course- this is what we are siing again now. The privately held company is seeking protection from its debts. Plans to restructure and streamline. Anyone want to place bets on whether they will go public again? OR whether we will be reading similar news stories about them again within the next decade?

And of course their fall, yet again, has nothing to do with the management. The failure to see shrinking markets and increased competition. A country that (in some regions much more then others) are moving towards healthier foods. A country (same caveat) that is increasingly aware of the rise in childhood obesity. The rise in Diabetes. The health costs to the individual, to families, to employers, to societies from the crappy foods that are Hostess Brands main business model? The rise in americans moving away from carbohydrates, an an increased awareness of Gluten allergies and intollerance. (hell, even the mega american brewers have learned this and are producing gluten free beers).

And of course, earlier this year it was revealed while the company was demanding pay and benefit cuts of employees, that the companies executives had been given a whopping 80% pay raise.

And looking at the salaries of employees at job site glassdoor here and here you find that employees are overwhelmingly dissatisfied- both with working for the company, and particularly with the CEO.

But of course, it’s gotta be the fault of Unions and Obama. Executives and investors are infallible. And they should always come out on top- regardless of whether they are sucessful or run the company into the ground.

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About drugsandotherthings

I am a criminal. Because I have used cannabis and psychedelics extensively. I have tried many other drugs, but never cared for the uppers, downers, or dissociatives. I love craft beer, and absinthe, but don't care much for alcohols effects- which quite frankly, are boring and dangerous. Science is my religion. I am in my 40's, and have travelled extensively. And often forced myself outside of my confort zone. I am employed, a respected member of my communtiy, an animal lover, an environmentalist, a political junkie, and the realities I have experienced continue to push me further to the left of the political spectrum.
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One Response to The Twinkie Defense

  1. Barneysday says:

    Very well said and its all exactly right. Interstate Baking/Hostess has been in shambles for years, and greedy management and investors that loaded the company with debt didn’t help. Does this story sound familiar???

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