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Saturday, November 17, 2012

Twinkees is Dead, Al Qaida is Alive

by Clifford F. Thies

Not enough workers crossed the picket lines to make the company viable, says the management at Hostess Brands. So the company, currently in its second stint in bankruptcy, is seeking to go into liquidation.

According to the company's website, 33 bakeries, 565 distribution centers, 570 bakery outlet stores and more than 5,000 delivery routes are being shut. 18,500 people are losing their jobs.

Over on eBay, remaining supplies of Twinkees are selling like hot cakes. (They last forever you know, whether in or out of their wrapping, or even half eaten on the kitchen table.) Gone along with Twinkees are Ring Dings, Devil Dogs, Ho-Ho's, Hostess Cup Cakes and Wonder Bread. Already baked items will continue to be delivered until they run out.

The company says that it had made its final offer involving wage and other concessions needed restore the company to profitability, along with offering employees a 25 percent ownership stake in a reorganized company. That offer was rejected by the unionized confectionary workers of the company. The company subsequently asked the bankruptcy court to allow it to proceed with liquidation.

Possibly, some of the company's iconic trademarks will be sold to other food companies, as might some of its facilities.

The history of the company reflects the constantly changing industry it is in. The company was formed by the merger of several originally independent, regional baking companies, each of which produced various breads and cakes under their own trademark names, and under contract for others. One of these companies was the Drake's company, which operated in the New York-New Jersey area. I admit to partaking of their wares during my youth.

The predecessor companies went through a variety of corporate structures during the past eighty years, sometimes operating as independent companies and sometimes as part of a conglomerate. It was during the 1990s that the present company, under the name Interstate Bakeries, emerged as a nationwide bakery.

At its peak, Interstate Bakeries had a workforce of more than 25,000. But, the company seemed unable to deal with the continuing changes of the industry, perhaps because of legacy issues of which its unionized workforce was only one. Buffeted by rivals such as Little Debbies and Tastykake, and faced with changing consumer tastes because of health consciousness, the company was forced into bankruptcy in 2004. It languished in bankruptcy for years, only re-emerging in 2009, under the name Hostess Brands. And, once out of bankruptcy, it only stayed out for two years.

Normally, the ups an downs of the corporate side of business go on without disruption to the underlying work. Customers, workers and production facilities continue along, while once independent businesses are acquired by larger corporations, or while divisions of larger corporations are spun-off as independent businesses. The key to the continuation of operations in the midst of these re-structurings in profitability (or, in restoring profitability when that is necessary). But, without profitability, who needs it?

Also normally, when companies go into liquidation or, less drastically, downsize, the workers and production facilities released find re-employment within a relatively short period of time. But, not in this economy. In this economy, losing a job often results in a long period of unemployment followed by a reduction in the labor force. It is as though Michelle Obama's comment on these workers losing their jobs is "Let them eat cake," providing it's more like a granola-based energy bar than a cream-filled, chocolate-covered cup cake.

5 comments:

jgeleff said...

For the record, Tastykake is in trouble too, with a decent portion of the problem being unions.

jgeleff said...

For the record, Tastykake is in trouble too, with a decent portion of the problem being unions.

jgeleff said...

For the record, Tastykake is in trouble too, with a decent portion of the problem being unions.

Chuck said...

Scum always support gangs.

Chuck said...

Scum are are also "fascinated" when reality collides with fantasy.

Scum are always this way.