From Obesity to Unions, Hostess Brands is Everything That's Wrong With America

Hostess Brands is filing for bankruptcy for the second time in a decade. With nearly $1 billion in debt, 19,000 employees whose jobs are at risk, and suffering from rapidly rising costs of sugar, flour, and hydrogenated vegetable/animal shortening required to make what Time called "plastic-sheathed snack cakes," Hostess seems to define everything that's unhealthy in America right now. Bad financial choices, bad food, bad management.

In 2004, the makers of Twinkies first filed for bankruptcy, a five-year process that ranks among the longest such proceedings in U.S. history. The company continued to struggle financially, and now risks complete liquidation, as it cannot make payments on its $700 million line of credit, has $2 billion in unfunded pension obligations to retired employees, and owes $860 million in current debt.

Hostess sold $2.5 billion worth of snack products and breads last year, but sales of Twinkies, the company's signature product, fell by 2%. Soft Twinkie sales haven't brought the company down, however. The Wall Street Journal cites high labor costs for employees who are members of the International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, high costs for staple ingredients, and poor market share for new, healthier baked products such as Nature's Pride whole grain breads. 

Some people will see union labor as the reason Hostess is teetering on the brink of oblivion, while competitors like Grupo Bimbo (Bimbo Bakeries USA) have surged to become the largest bakery corporation in the U.S. and the fourth-largest food manufacturer in the world (behind Unilever, Kraft, and Nestle). Bimbo employs union workers, but with far less generous contracts than those negotiated with Hostess. Others will see Hostess' seemingly inevitable demise as justifiable, considering the unhealthiness and deceptive nature of the Twinkie and many other similar Hostess products. 

Hostess' problems — unwise spending; overoptimistic sales projections; over-generous union contracts and pension obligations; and public disenchantment with hydrogenated fat, superfine sugar, and cellulose fiber advertised as "cream" — all sound an awful lot like America's problems in general right now.

And if you love Twinkies, Marinela (subsidiary of Mexican multinational corporation Bimbo) makes Gansitos and Submarinos. Muy sabroso!

Photo Credit: Wikimedia Commons

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Amy Sterling Casil

I am a professional writer and college teacher. My most recent book is Female Science Fiction Writer (http://www.amazon.com/Female-Science-Fiction-Writer-ebook/dp/B008E95D2E) a major short fiction collection. I am a 5th generation Southern California native, and have a colorful heritage in my mother's and my father's families. I have a huge, wonderful exuberant family, including a beautiful daughter and I am very grateful for every opportunity I have had. I have a Jack Russell Terrier named Gambit (Badger died, Gambit is a new rescue) and have always disliked rubber bands. I'm an old school Republican by registration but probably a Libertarian in sentiment. I have a very varied professional background and have been known to raise a few funds in my day. I should add that I am award-nominated fiction writer, have published 26 books, and have two BAs from Scripps College, Claremont, CA and an MFA from Chapman University, Orange, CA. I do professional business consulting and planning and am Founder and CEO of Pacific Human Capital.

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