Hostess – A Company of Ding Dongs

Interstate Bakeries Files Chapter 11

When all of this Hostess stuff started to go down, my first thought was to stockpile every single Twinkie I could find. Next to Little Debbie”s Oatmeal Cream Pies, Twinkies are probably my favorite guilty pleasure. I mean, is there a more delicious

golden sponge cake in the world? Mmmmm. Just thinking of them makes my mouth water and my eyes well with tears, filled with sadness like a Hostess cupcake filled with some weird, unnamed creamy something.

My original idea was to write a post about how much unions suck. The first reports from last week indicated that it was the union doing what unions are so famous for doing lately: holding up business while the union fights for raises that may or may not be deserved. Hostess came out swinging, talking about how they had already made deals with the other unions. There was only one hold out. The Bakers” union. These greedy sons- of-britches had the gall to say “No Way!” Once again, greed leads the way, and because of this greed, I am left without my disgustingly delicious attempt at baked goods.

But then, as I was writing my rage, I started reading more and more about the conflict between the union and Hostess. Now, I would like to personally extend the leaders of Hostess my congratulations. You have actually gotten me to support the union. I feel a bit dirty.

First of all, let”s get one thing out of the way. Both sides are claiming that one of the reasons the company is failing is because Americans are becoming more health food conscious. All together now: POPPYCOCK!!! Some Americans may be trying to eat better; but not enough to put a company out of business. If that were the case, you would not have the Double Down or the Doritos Locos Taco (which I am still baffled that it took them so long to come up with this idea) or the Twinkie Weiner Sandwich (you seriously gotta try this one)! Not to mention McDonalds, Coke or Little Debbie, which seem to be doing just fine.

Another claim is that the unions are the reason for the failure. This one union, specifically the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (which I totally don”t get, but finally understand why their junk is so addicting), has refused to budge. They won”t take pay cuts, unlike the other unions. They won”t change their benefits, unlike the other unions. Clearly they are greedy. Except when employees start commenting that they would prefer to lose their job than receive yet another cut from their employer, something is clearly not kosher…unlike Hostess donuts, which are.

There is one simple reason why Hostess is failing, and it is not because the union pushed back. It”s because it”s run by idiots. The company is filing for bankruptcy for the 2nd time after seeing profits go down by over 24% since 2004. This is a sure sign that changes need to be made, right? Clearly, the company is heading in the wrong direction, right? Smart companies would fire their CEO, or at the very least, some of the upper management. Apparently, however, Hostess thought the better route was to give all the bigwigs raises! I am not opposed to people making obscene amounts of money (unless it”s Arod). You hire smart people by paying them in increments of $1 million. However, if Hostess was publicly traded, the shareholders would have thrown them out faster than you can say “Where”s the cream filling?”

I am not a union guy. Not at all. I very rarely agree with striking employees. My philosophy is, if your job is that bad, find another one. But, it”s really hard to argue that with this one. If I put myself at the table, I think, Hmmm…so, you”re filing for bankruptcy, again. You just gave 70-85% raises to some of the most ineffective executives in history. And, you want to cut wages of your lowest paid staff? Hellz no! I won”t agree to that! If I am going down, I am taking you Ding Dongs with me!

Curse you, Hostess, for making me side with the union.

Now, I am going to go finish my Christmas shopping. WalMart has been open for 72 hours straight. I”ve probably already missed the good deals.

FOT Background Check

Jason Pankow
Jason Pankow realized long ago that he wasn’t smart enough to actually program video games and game consoles. So, he found another way to participate! In between bouts of pwning newbs in Halo or scoring mad gamerpoints, Jason spends his time as the Staffing Program Manager for Microsoft’s Devices and Studios Division. Jason’s day is spent running programs that help recruit the obscenely talented developers, designers and engineers that have blessed the world with the likes of Xbox, Kinect and tons of other rad stuff, much of which he can’t tell you about. So, don’t ask. In non-nerd speak…what this means is that Jason has the coolest recruiting job in the world! Look him up as “Satchmo Baggins” on Xbox LIVE. But, watch out for the dreaded headshot!

6 Comments

  1. akaBruno says:

    Well, it hasn’t been one CEO overseeing this catastrophe. They have had 6 CEOs in 8 years.

    Interesting read from an insider, whose pay went from $48K in 2005 after Hostess emerged from bankruptcy to $34K last year. In five years, under the Hostess proposal, he would earn only $25K, and that doesn’t include the total destruction of their retirement plan, and the weakening of their health insurance: http://www.dailykos.com/story/2012/11/18/1162786/-Inside-the-Hostess-Bankery

    Reply
  2. Mark Berry says:

    Would have been good if author had done research – if nothing more to understand the efforts of the board of directors and senior leaders to make the company viable – before resorting to ad hominem personal attacks (which were – factually – incorrect). In simple terms, this is the story of a company that allowed itself to become less relevant in the marketplace while at the same time not seeking – years ago – to reel in employee wages and benefit costs and a union (not representing the majority of its employees) who would accept unemployment over further concessions. What is not being reported – by anyone – is the impact of this liquidation on other companies participating in the BCTGM pension plan (who will be compelled to pony up significant $ to cover the pension funding lost with Hostess’ liquidation while at the same time slashing employee pension benefits in the interests of maintaining financial viability). If you’re going to be a bomb-thrower and disparage either management or the unions in this case, get your facts right. Then (ideally before writing) take time to understand the industry about which you write. It’s easy to disparage one party or the other; another thing altogether to do it with some semblance of circumspection and insight.

    Reply
    • Laurie Ruettimann
      Laurie Ruettimann says:

      This is a company not allowed to be itself?

      Hmm.

      Corrupt venture capital tactics + trying to shove cheap, toxic food into the mouths of an American population that’s grown increasingly unhealthy. I think Hostess was exactly the company it allowed itself to be — and that’s why its share of market declined and they are no longer in business.

      The free market works even when unions are involved. Funny how that happens, huh?

      Reply
  3. David says:

    Hostess management has no one to blame but themselves. They made poor decisions, tripled executive pay during tough times, and when things got really bad they tried to ride it out on the backs on their workers. They deserve to fail.

    Reply
  4. BizHelp says:

    We need Twinkies in our lives when its all said and done.

    Reply
  5. CareerLady says:

    This post could have been written about my organization. Jason you got it right. At my organization we have had a string of executives (think revolving door) but the one set of employees that has remained constant is our unionized personnel. We have multiple unions.

    All have reached an agreement but 1. This union is the one for our “professional” series of workers. This means CPAs, Programmers, Contracting Administrators, etc. These employees would not take a bum deal and as a result have gone without a pay increase, updated benefits package, etc. for almost 8 years.

    They cannot even begin to negotiate a current contract because execs are holding up the previous one. Unfortunately the problem lies in that the employees refuse to strike or walk-off because they believe in the mission and service we provide to our customers. Them walking off could literally bring our city to a stand-still.

    Execs on the other hand have no problem using the organization and then jumping ship once they have reached a certain level of name recognition (not to mention their own huge quarterly bonuses and increases). It is really a sad state of affairs. The hard working employees keep working for out-dated pay, benefits, etc. While the execs find reason after reason to hold up an 8 year old contract.

    Not hard to see who is really here for the good of the organization and who is here as a spring board to their next big break.

    Reply

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