No More Twinkies: Unions and the Death of Hostess

By:  Bob Confer
11/16/2012
       
No More Twinkies: Unions and the Death of Hostess

Today is a dark day for U.S. manufacturing as the storied corporation Hostess Brands Inc. announced that it was closing shop and liquidating, selling off its brands, facilities, and equipment. It is a sad ending to a company that had been in operation since 1930 and had weathered the Great Depression and the Great Recession. The closing will bring an end to a staggering 18,500 jobs.

Today is a dark day for U.S. manufacturing, as the storied corporation Hostess Brands, Inc. announced that it was closing shop and liquidating, selling off its brands, facilities, and equipment. It is a sad ending to a company that had been in operation since 1930 and had weathered the Great Depression and the Great Recession. The closing will eliminate a staggering 18,500 jobs.

Those jobs could have been saved had those workers — or more specifically their unions — agreed to wage concessions. But they didn't, wrongly believing that Hostess’ threats of closure were idle.

No one in his right mind would have found the warnings idle, considering that the company had already declared bankruptcy in January of this year — but the cocksure leaders of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) did, and continued to demand that workers strike at over two-dozen of the company’s 33 plants.

That was labor suicide — the straw that broke the camel’s back. There was no way that a company already $860 million in debt could weather the storm.

BCTGM’s killing of Hostess wasn’t limited to the strike. The union’s demands had plagued Hostess for years, forcing — through the legalized monopolization of labor supply — wages that the market wouldn’t bear. The striking line workers were paid healthy salaries, $16 to $18 per hour. In a low-profit, low-selling-price business such as baked goods (things that are basically commodities), those wages aren’t sustainable, especially considering that baking and distribution involve a lot of manpower.

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Bob Confer (photo)

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