Thank The Union For Killing The Twinkie – Update – Trumka Blames Bain

Unionized Hostess employees walked off the job because they didn’t like the contract the company was offering. They left the company unable to conduct business. They had already helped to put the company into bankruptcy. They were told that if they went on strike the company could close. Now they’re finding out the company wasn’t kidding.

Thank the union when you can’t buy Twinkies, Ding Dongs, HoHos or Wonder Bread.

Failing to persuade striking employees to return to work, Hostess Brands disclosed plans on Friday to liquidate its assets and lay off most of its 18,500 workers, bringing the 82-year-old maker of Wonder Bread and Twinkies to the end of its line.

The painful decision to wind down the Irving, Texas.-based private company follows a nationwide strike that Hostess said severely constrained its operations.

Hostess said delivery of its products, which include Ding Dongs and CupCakes, will continue and its retail stores will keep their lights on for several days to sell already-baked products.

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Hostess CEO Gregory Rayburn said in a statement.

As a result of the liquidation, Hostess said it will “move promptly” to lay off “most” of its 18,500 employees and focus on “selling its assets to the highest bidders.” (Read More)

I bought a loaf of Wonder Bread last night. Maybe that’s the last one I’ll ever buy, unless another company buys the brand.

In all fairness, the Teamsters did agree to a contract, it’s the Bakery union that’s bringing about the downfall of the company and the loss of their own jobs.

The Irving, Texas-based company had already reached a contract agreement with its largest union, the International Brotherhood of Teamsters. But thousands of members in its second-biggest union went on strike late last week after rejecting in September a contract offer that cut wages and benefits. Officials for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union say the company stopped contributing to workers’ pensions last year.

NBC’s Savannah Guthrie read a statement on “Today” from the bakers’ union that said: “Despite Greg Rayburn’s insulting and disingenuous statements of the last several months, the truth is that Hostess workers and the union have absolutely no responsibility for the failure of this company. That responsibility rests squarely on the shoulders of the company’s decision makers.”

Rayburn responded that he had been “pretty straightforward in all the town hall meetings I’ve done at our plants to say that in this situation I think there is blame that goes around for everyone.”

He denied that the decision to shut down could be a last ditch negotiation tactic to get the union back to the table.

“It’s over,” he said. “This is it.” (Read More)

The above article goes on to note that some of the bakery workers defied the union and crossed the picket lines because they wanted to keep their jobs. Unfortunately, there weren’t enough of them and now they’ll all be in the unemployment line.

Update: Linked by The Pirate’s Cove where I was reminded that Hostess also has those great donuts. The kids love them. They serve Hostess donuts before their religious education classes, what will the kids eat now?

Update: It didn’t take Richard Trumka long to come out and blame it on Mitt Romney and venture capitalists. What a scum. Oh, and now a petition has hit the White House asking for a bailout of Hostess.

Update: Ace of Spades on Trumka’s ridiculous rant:

So the company was already in bankruptcy, and a Bain-like private equity firmbrought it out of bankruptcy due to a $130 million investment, which the investors, get this, hoped to one day see a profit on.

The union workers disagreed, and told the investors that they should not only never expect a profit, but that they would continue escalating demands so that additional bankruptcies and additional bailouts of millions of dollars would follow.

So, the investors said: See ya. No use throwing good money after bad.

But remember, it’s the people who spent $130 million to bring the company out of bankruptcy who are the villains here.

Update: Linked by The First Street Journal – thanks!