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Hostess Brands’ website boldly announces:

Hostess Brands is Closed. We are sorry to announce that Hostess Brands, Inc. has been forced by a Bakers Union strike to shut down all operations and sell all company assets.

The company claims that its demise is a result of:

. . . an inflated cost structure that put the Company at a profound competitive disadvantage.  The biggest component of the Company’s costs was its collective bargaining agreements that covered 15,000 of 18,500 employees.

In other words, we’re going tit’s up because of the damned greedy production workers. This ignores the reality that the company first entered into Chapter 11 bankruptcy in 2004 and since that time has won repeated give-backs from its unions. That first bankruptcy proceeding resulted in lost union jobs and reduced wages and benefits but did nothing to stabilize the business model or to improve management procedures. In fact, the company failed to update its product line or to modernize its facilities. Constant CEO turnovers added to the chaos. A second bankruptcy, filed in January of 2012, did nothing to stabilize the 82 year old company, but it did result in nearly $2 million worth of pay packages for top executives who “meet budget goals during the liquidation process.”  The current CEO, Gregory Rayburn, is making $125,000 a month! I live on not much more than that for a year!



Throughout my life, I’ve had a troubled relationship with labor unions; I know, intimately, the problems that lurk within a unionized labor unit. But there is something inherently wrong when a handful of suits can walk away from a broken company with their lives in tact and bonus packages that would feel like a lottery prize to the people who counted on a livable retirement after investing more than 20 or 30 years of their lives producing the goods. Once again, we see executives walking away with a fistful of dollars on the backs of workers, whose lives have been turned completely upside down and often too late in life to recoup.

Yes, it’s easy to blame everything on the guy at the bottom, but it’s a cheap shot. The guy at the bottom is less crafty, less eloquent, and looks less important. But without the guy at the bottom, there is nothing to support the guy at the top. When will we absorb this fact?

The New York Times http://dealbook.nytimes.com/2012/11/16/hostess-brands-says-it-will-liquidate/
Idaho Statesman: http://www.idahostatesman.com/2012/11/29/2363160/hostess-to-seek-approval-for-executive.html#storylink=cpy Candice Choi – AP Food Industry Writer
The Los Angeles Times: http://www.latimes.com/business/la-fi-hiltzik-20121125,0,966735.column by Michael Hiltzik
Bakery, Confectionery, Tobacco Workers and Grain Millers International Union http://www.bctgm.org/newsblog/the-latest/