If Hostess Mediation Fails, Lots More Than Twinkies Will be Lost

Tuesday, 20 Nov 2012 03:41 PM

By William Dennings

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Snack cake enthusiasts are still on a Hostess rollercoaster ride.

First came a terrifying plunge into depression with news last Friday that the maker of iconic Twinkies was being forced to close forever by a bakers’ union strike.

Then on Sunday, like a sugar high, came word that Hostess and the bakers agreed to mediation. How will it end for those golden, cream-filled sponge cakes and all those Sno Balls, Ho-Hos and other delectable junk food, not to mention Wonderbread?

Who knows? But while we wait, here’s a partial list of what else may be lost by ride’s end.

Twinkie The Kid
How can anyone forget the cartooned cowboy mascot of the Hostess flagship brand? Many older snack-food fans will remember Twinkie the Kid from his countless television appearances. Though the Twinkies brand most likely would be purchased by another distributor if mediation fails and Hostess continues through bankruptcy and liquidation, it’s uncertain whether the mascot himself would survive a rebranding.

The forgotten hero of the snake cake fallout is without doubt the little duck with a chef’s hat known as Drake; this company, too, falls under the Hostess banner. The Drake’s label put out such iconic and comically named brands as Devil Dogs, Sunny Doodles, Ring Dings, Yodels, Funny Bones, Yankee Doodles, Yodels, and the eponymous Drake’s Coffee Cake. Imagine a world without all those funny frosted words.

Employee Benefits
When Hostess filed for bankruptcy in 2012, it was the second time in a decade. In 2004, the brand filed a Chapter 11 claim, which allows a company to reorganize while trying to recuperate its loans. But by December 2011, the company was already on the verge of filing for bankruptcy for the second time and management had already cut union pension plans, and they still couldn’t manage to exit bankruptcy without axing most employee benefits. This dispute is the ultimate source of the November strike that has brought the company to its knees.

18,500 Jobs
Hostess has wanted to lay off the employees of its 33 nationwide factories, at the cost of about 18,500 jobs. Financial analysts for Hostess have said the company can’t recoup from the nationwide strike that the unions imposed to protest alleged worker-treatment abuses; management blamed the stubbornness of the unions. Toward the end, the private equity firm that in-part holds Hostess, wrote: “Hostess failed because its six management teams over the last eight years were unable to make it a profitable, successful business enterprise.”

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