Now 18,500 workers at 33 bakeries and 565 distribution centers, as well as 570 outlet stores nationwide, will be out of a job, according to a report by CNNMoney, following the company’s formal announcement Friday to end operations. The closing resulted, in part, following a strike by workers and the refusal of the Baker’s Union to accept compensation concessions (though the Teamsters Union, which represents the companies’ truckers, approved wage concessions). The company filed for bankruptcy for the second time in January.
Hostess, which is owned by a group of investment firms, was the second largest baker in the United States with annual sales of $2.5 billion, driven by sales of its popular products — Twinkies, Wonder Bread, Ding Dongs, Ho Ho’s and Home Pride bread. But all that income didn’t prove enough to help the company, which reportedly operated on thin margins, to survive. Demand hasn’t exceeded supply in the snack food market, and now plenty of employees will pay the price with their jobs resulting from empty-calorie profits. No single group is responsible for shuttering Hostess, but the efforts of some workers who clearly miscalculated their game of “chicken” with the company didn’t help.
Kansans will be affected with the closure of plants in Lenexa and Emporia. Consumers might not have access in the short-term to the popular bread and bakery items once stores are emptied of them.
Taking a pay reduction from $34,000 to $25,000, especially when combined with higher out-of-pocket health insurance expenses, was too high of a sacrifice for at least one receiving clerk who was a member of the Baker’s Union in Lenexa, according to the CNNMoney article. It would have been the employee’s second wage reduction from a high of earning $48,000 in 2005 before the company’s first bankruptcy. The employee rationalized that he would be living in poverty with the company’s latest proposed compensation proposal and he could earn more by being on unemployment.
How sad is it that Americans would rather be on unemployment than working — even if it is for a reduced wage? Those kinds of jobs, even in their reduced capacity, won’t be easy to replace. Though the product might re-emerge in the future as the company’s assets — including the recipes — are sold to the highest bidder, the replacement jobs won’t offer the same creamy filling.
— Jeanny Sharp,
editor and publisher
editor and publisher