Thursday, November 22, 2012

No More Twinkies

The uproar over the demise of the maker of Twinkies rather bemuses me, as I’m not sure why the welfare of our economy is so dependent on our ability to manufacture Twinkies. I guess it’s symbolic; the demise of a company that has been such a staple of the landscape for so long. Except that it hasn’t. The Hostess brand has only been around since 2004. If Interstate Bakeries was so critical to our financial infrastructure they would not have gone bankrupt and changed their name.

Some people are blaming the labor unions for this tragedy (?), some are blaming management, and yet others are blaming both. I’m going to go out on a limb, blame neither and say that dinosaurs naturally become extinct.

It is claimed that the company should have diversified its products when the existing product line began losing ground. I’m not sure of that. When you make Twinkies, how do you credibly introduce a healthy snack? It’s not going to fly and you’re just going to magnify your losses.

Rule of business: do what you do. Companies that drill oil wells generally don’t succeed when they decide to open up a chain of hair salons. Women don’t want to get their hair done by oil drillers, and hair salons stocked with drilling mud don’t draw well. Hostess did what it does until the need for what it does diminished to the vanishing point. So be it. They knew when it was time to quit.

Maybe the union should have made “just one more concession” to keep their jobs a little longer; times are tough and jobs are hard to get. But there comes a time to stand up on your hind legs and say that enough is enough. I cannot disrespect that.

I’m a union guy anyway. I’ve stood at the gates of a steel plant with an axe handle in my hand, staring down the West Allis Police Department. I’m not going to be very critical of a labor union saying that it will not accept yet more pay cuts.

5 comments:

Bartender Cabbie said...

I respect that but at the same time I must say that if I were an employee I would have kept what I had and just kept looking.

Ted McLaughlin said...

While the company has only been called Hostess for a few years, it has actually existed for much longer. It's most famous product, the Twinkie, was invented in 1930.

Jayhawk said...

"the demise of a company that has been such a staple of the landscape for so long"

Did you notice the words "a company" in that quote? The company was Hostess. The product, Twinkies, has been around since 1930, and I was aware of that, but I did not say "the demise of a product," I said "the demise of a company." Sometimes it is well to read something before you comment on it.

And the company has not "actually existed for much longer." Interstate Bakeries was disbanded by a bankruptcy court and a new company was formed which is named Hostess. It is not the same company renamed, it is a new company.

Just as the present General Motors is not the same company as existed in 2008. That company was disbanded by a bankruptcy court and a new company with the same name was formed with a new issuance of stock.

bruce said...

Not technically the same company, but with the same products, labor force, equipment, and often the same management. Most people won't listen to a quibbler like you and they'll just call it "the same".

Jayhawk said...

Different ownership and, in this case, different brand. The "company" is its ownership and brand. I don't think the former owners, who lost all of the money they had invested, think it is the same company. The commenter, who loathes and despises people who invest in companies and who belives that 4% is "obscene profit," doesn't care about them, of course.

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