Hang on to your Ding-Dongs and hide your Ho-Ho's in a closet because Hostess Bakeries are closed. The famous maker of Twinkies and Wonder Bread announced it's closure today after filing for bankruptcy at the beginning of the year. Facing a culture that increasingly values healthy food choices as well as an uncertain economy, Hostess had negotiated an 8% pay cut with their employees to keep the company in business, but unions fought against the cuts and initiated a strike. The massive nationwide strike was too much for the struggling bakery to overcome and the proverbial cake has fallen flat.
According to Becker, most of the company's employees had approved an 8 percent pay cut for the coming year, but the members of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union had voted against the reduction and a change in the pension plan.
Becker stressed that lingering pension obligations and other expenses felled the company, and not demand for its products.
The unions, of course, blame Wall Street greed for years of mismanagement, but it was union greed that led to the demise in the last act of this play. At some point, unions have to be willing to make concessions to keep a company alive. Allowing the company to close and lay off over 18,000 workers in this economy was the wrong decision no matter how strongly they believe in their principles.