There was recently a big fuss about how the Hostess company was going out of business, because many people seemed to have a sentimental childhood attachment to its products though I personally had never eaten any, perhaps because I had not grown up in the US. Much of the media spread the message that the cause was that the workers were not willing to grant huge concessions in salary and benefits for the company to stay in business.
It now turns out that the company had been using its workers’ pension funds to cover operations while it increased the salaries and bonuses paid to their executives, despite their poor management of the company.
There seems to be no end to these stories of how wealthy company executive and board members have enriched themselves while running their businesses into the ground. These are the supposed ‘job creators’ whose interests, we are told, must be carefully protected and even enhanced. But what they really are are the classic Randian ‘moochers’ and ‘looters’, living off the hard work of others.
Hostess was owned by private equity leveraged buyout hedge fund companies. A lot like Bain Capital, Romney’s vulture capitalism company.
Looting companies is part of their business model.
Didn’t miss too much. They were high calorie, low nutrient junk food. I never liked twinkies. Hostess cupcakes were OK though, once in a while.
The company went into its first bankruptcy in 2004. The company was being run well, but changes in American tastes away from high carb snack foods meant severely declining sales. The company nearly folded. Eventually, though, they got an infusion of cash from a holding company with a reputation for buying troubled companies and dismembering them for a fat profit, and Hostess came out of bankruptcy in 2009. The holding company altered Hostess’ recipes, turning them into shoddy parodies of what they used to be, in order to increase profits.They failed, many times, to fulfil promises made to employees, who agreed to pay and benefit cuts with the understanding that the new owners would restore those losses. When the employees got fed up and struck in December, the owners had the excuse they needed to finally kill the corporation they had made fatally sick.
The gross malfeasance is exactly what everyone knew would happen back in 2009. The holding company has a corporate obligation to turn a big profit for their shareholders, after all.
You hear stories about this all the time -- the workers sank the ship by demanding too much, but it’s management and the owners who demand higher and higher profits regardless of the actual market. In good times, they benefit, and in bad times, the workers are the ones who pay. Those at the top will reward themselves no matter what.
I grew up mostly overseas, a military dependent. Whenever my family was back in the USA for a visit, my parents would ply us children with American-specific foods, including Twinkies and Devil Dogs and all kinds of snack foods that weren’t available overseas. I never cared for them; they were too sweet and otherwise tasteless and texture-less. Americans--particularly American Baby Boomers--seem to worship these foods.
Having said that, I’m appalled that the employees of Hostess were let go after years of taking pay cuts and losing benefits, and they’re the ones being blamed for the demise of the company. This isn’t about crappy foods, it’s about the war on the workers.