Vulture Capitalism Killed Twinkies

Jake Blumgart
salon.com
November 20, 2012

As the final Twinkies, Sno-Balls and those glowing orange cupcakes were stuffed with cream and wrapped in cellophane on Friday, the business world and much of the news media knew who was to blame for this dying American icon. It was the unions.

The Wall Street Journal described the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union as “The union that brought the 85-year-old baker of Twinkies and Wonder Bread to its knees.” Over at RedState, a headline tried to mix anti-union sentiment with conservative humor: “The Demise of Twinkies? Yes, It’s True. Parasitic Unions Kill Their Hosts (or, in this case, Hostess).”

As Hostess moved to end its operations last week — a bankruptcy judge asked the company Monday to try mediation with its unions; those talks are scheduled to begin today — commentators were eager to blame the rigidity of unions.

But the story is far more complicated than that — and in some ways, the exact opposite of the tale pushed by those on the right. It’s the story of two bankruptcies, hundreds of millions of givebacks from Hostess unions and hundreds of millions of debt piled onto the company by venture capitalists. It’s a story of management that boosted its own salaries, while failing to make agreed payments into workers’ pension funds. And it’s a story of changing tastes and diets.

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This article was posted: Tuesday, November 20, 2012 at 1:52 pm

Tags: business, domestic news, economics

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