Ho Ho No: Hostess Liquidating and Going Out of Business

16 Nov

It seems more and more American icon are dying off. Hostess is the most recent victim.

Unfortunately it did not have to come to this but the outdated dinosaur union organizations forced the company’s hand. One cannot get blood from a turnip and, in this case, get money from an empty piggy bank.

The Hostess company was already on the verge of filing for bankruptcy in 2011. Then in January of 2012 it did file for a second bankruptcy (the previous filing in 2004) and according to filed court papers said, “Whether the debtors can achieve long-term viability depends directly and substantially on the debtors’ ability to achieve dramatic change to their labor agreements, with a corresponding material reduction in their cost structure and legacy pension and medical obligations, and a restructuring of their capital structure.”[1]

In other words, the unions were bleeding the company dry and unless they worked with the company to restructure their contracts things would not turn out well. Apparently the Teamsters union grasped the possible impending doom and, not out of desire but need for the company to survive, was working with Hostess,  to get a deal done.

However the  The Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTWBM) Union was not as forthcoming to the bargaining table. Digging their heals in the sand they stood firm against Hostess offer, described by Frank Hurt, the union president as, “way, way over the top.” [2] Apprently Mr. Hurt felt a 100% wage cut was better than the smaller wage cut and pension pension restrictions for his union members.

Now the 82-year-old American company based in Texas, a right to work state, will sell off its assets and close its doors for good. Some of the 30 plus brands may find life with new companies, but it’s highly doubtful all of them will. Stock up on Twinkies and Ho Hos while they’re on the shelves. They may not be back any time soon.


Source –

  1. Wall Street Journal – Twinkies Maker Hostess Files for Chapter 11 Protection
  2. Wall Street Journal – Twinkie Maker Hostess to Close

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