I’m from Ozark country and it is against the law for any home south of Rolla to have a Twinkie-less pantry. Alright, so maybe not “against the law,” but I’ve yet to see a pantry without one. All my kin abided by this unspoken rule. Because of my history with the snack cake, I was dismayed, to say the least, when news hit that Hostess was trying to stave off bankruptcy. I was further dismayed that they sort of obfuscated the reason why.
I’m sorry, but I call BS.
You’re Hostess. It’s not difficult to sell creme-filled heaven snacks and America isn’t exactly eating healthier. If anything, America is eating leaner because the price of everything has increased eleventy-fold because the cost of energy is passed to us, the consumers. Now for the truth: this is what Hostess cited as the real reason behind their move against bankruptcy.
Higher energy and labor costs. Likely promises made to union bosses that the company is unable to keep because inflated wages and inflated energy prices are eating profits and everyone knows wages and sustainability come from profits.
USA Today finally adds further down the page:
Additionally, Hostess employees are unionized while most of its competitors aren’t. As a result, Hostess has high pension and medical benefit costs.
Until you reached the middle of the story and put two and two together, you’d have figured that the company is tanking due to eating habits.
Dear Ms. Loesch, unions are not to blame for the possible bankruptcy of Hostess Brands, you nimrod.
Who else joins in on the pile-on against unionization? AFA's leading nutjob Bryan Fischer, on Twitter, joined in on the chorus of blaming Hostess Brands's unionization for their possible bankruptcy.
Why Hostess is going bankrupt: it is unionized, its competitors aren't. Thanks, unions. ow.ly/8s8Oz
— Bryan Fischer (@BryanJFischer) January 13, 2012
Now, the real facts about Hostess's possible bankruptcy, the facts that Loesch, Fischer, and the other anti-union hacks don't tell you:
NEW YORK (AP) – Just like many Americans, the maker of Twinkies, Sno Balls and Wonder Bread is trying to lose the fat.
Hostess Brands is hoping to take a bite out of its high costs as it heads back into bankruptcy protection for the second time in less than a decade. Hostess has enough cash to keep stores stocked with its Ding Dongs, Ho Hos and other snacks for now. But longer term, the 87-year-old company has a bigger problem: health-conscious Americans favor yogurt and energy bars over the dessert cakes and white bread they devoured 30 years ago.
"The iconic status of Twinkies is partly this perception that there's nothing real in it," said Ken Albala, professor of history at the University of the Pacific, in Stockton, Calif., who specializes in food history. "It's this cake filled with an unidentifiable sugary cream filling that never goes bad."
Hostess has other problems, too.
In Hostess' Chapter 11 filing on Wednesday, the company said its rivals have combined and expanded their reach, heightening competition in the snack space. Hostess' competitors range from Bimbo Bakeries, which makes Entenmann's baked goods, and McKee Foods, which make Little Debbie snack cakes. It also faces competition from larger food makers like Sara Lee and Kraft Inc.
Additionally, Hostess employees are unionized while most of its competitors aren't. As a result, Hostess has high pension and medical benefit costs. The company has 19,000 employees and operates in 48 states.
Hostess did not announce layoffs but spokesman Lance Ignon said Wednesday that the company will make future decisions "in the best interest of the company."
CEO Brian Driscoll said the Hostess is working to reach a consensual agreement with its unions to modify its collective bargaining agreements. Hostess also hopes to modernize its systems, fleets and plants to keep pace with customer needs.
"This company has tremendous potential if we can remove the barriers to success," Driscoll said.
The Teamsters Union, which represents about 7,500 of Hostess' delivery drivers and merchandisers, said in a statement on Wednesday that it is also committed to working toward a solution.
The company's filing comes just two years after its predecessor emerged from bankruptcy proceedings. That company, called Interstate Bakeries and based in Kansas City, Mo., filed for bankruptcy protection in 2004 and changed its name to Hostess Brands after it emerged in 2009.
CNN Money's Aaron Smith::
NEW YORK (CNNMoney) -- Rest easy, Twinkie lovers: Hostess Brands, the storied American manufacturer of snack cakes, filed for Chapter 11 bankruptcy Wednesday, but said it will continue to churn out Ho Hos, Ding Dongs and other iconic products.
"Throughout the proceeding, we're going to operate business as normal," said Hostess spokesman Erik Halvorson. "They'll keep making Twinkies."
The company, based in Irving, Texas, filed for Chapter 11 protection in U.S. Bankruptcy Court in New York. But Halvorson said the company does not plan to lay off any of its employees or close any plants. So the CupCakes and Sno Balls will keep on coming.
The company has about 19,000 full-time and part-time employees, including 10,413 hourly workers and 8,436 salaried workers, according to a court filing. About 83% of the employees are union members.
The company said that it pays about $63.2 million to its employees per pay period, and that it currently owes them $21 million for services rendered.
In its bankruptcy filing, the privately held company said that it owes more than $1 billion to creditors. The debt is spread out among a vast number of creditors -- between 50,000 and 100,000, the company said.
Interstate Brands was formerly known as Interstate Bakeries. That subsidiary filed for bankruptcy in 2005, emerging from Chapter 11 in 2009. Layoffs occurred during that time and even since 2009, said Halvorson.
The job reductions took a toll on company morale, according to bankruptcy documents filed by Hostess on Wednesday.
"The employees have been witness to the closing or sale of several operations within the debtors' business as well as company-wide layoffs or reductions in force," the document said. "The increased pressures on the employees, together with layoffs and general concern about the welfare of the debtors, have led to a decline in employee morale."