When Hostess Brands declared bankruptcy on Nov. 16, shoppers snatched up the business’s remaining baked goods from store shelves for fear that they would never be seen again. Hostess has been in operation for 82 years, baking some of the most iconic products to appear inside lunch boxes and kitchen pantries, including Sno Balls, Ding Dongs, Donettes, Ho Hos, Wonder Bread and, of course, Twinkies.
But the Hostess liquidation shouldn’t cause snack cake lovers to despair. Many of these products—especially Twinkies—have such high brand recognition that other companies are vying to own and produce them. And companies are willing to pay large sums for those rights.
On the other hand, more than 18,000 Hostess employees who lost their jobs have many reasons to despair.
According to Forbes writer Fred Wszolek, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union began the strike on Nov. 9 that led to the closing of Hostess. The union wouldn’t budge on wage and benefit demands, and Hostess had no choice but to liquidate.
This initial strike serves as a solemn reminder that too much union control is detrimental to business like eating too many Twinkies is detrimental to a person’s health.
“Unions kill an American classic, and 18,500 of their own jobs,” a Wall Street Journal article said. “Hostess’s 372 collective-bargaining agreements required the company to maintain 80 different health and benefit plans, 40 pension plans and mandated a $31 million increase in wages and health care and other benefits for 2012.”
It’s no wonder that Hostess had to turn off its ovens.
These outrageous collective-bargaining agreements required that cake and bread products be loaded into different trucks, even if the products were being shipped to the same location. Workers who loaded cake onto trucks couldn’t load bread. Truck drivers weren’t allowed to load or unload the products they transported, according to The Wall Street Journal.
These stipulations may have created more jobs, but they are the same stipulations that caused Hostess to go under. The company couldn’t afford all its workers under the collective-bargaining agreements. The work force was too large and therefore created an expensive and inefficient business.
Other unions should reconsider their bargaining strategies if they want to maintain the jobs they fight to protect. Workers have rights, but when stubborn demands for higher wages result in an 82-year-old business’s bankruptcy and the loss of more than 18,000 jobs, workers end up fighting for their own unemployment.