As I assume most of you have heard, Hostess - the maker of Twinkies among other assorted goodies, is going out of business. Roger Ebert danced on their grave on Twitter, due to the unhealthiness of their product. More than a few people I know have said “good riddance.” This, in my view, is very much the wrong way to look at it.
The political arena is busy fighting it out. One side is blaming the unions that refused to budge. The unions appear to be looking at this as a moment of triumph. Yes, they’re out of the job, but they stood up to “Bain-style corporatism” or somesuch. I don’t think either of these takes are exactly right. Indications are that Hostess had some foundational problems that were what required them to appeal for renegotiated labor settlement in the first place. They’ve been in and out of bankruptcy for a while. Besides which, it is ultimately the decisions of the employees as to how to read their interest, and if they got this wrong it was due to a miscalculation rather than to a sense of entitlement. When you’re asked to take a pay cut, it’s not a sense of entitlement to refuse.
On the other hand, it’s unknown whether the company could have kept going and could have rebounded, and the union did put the final nail in that coffin. They may not have been the primary cause of the shuttering of Hostess’s doors, but they were a part of it. At least, in a “facts on the ground” sort of way. They might be getting less money, but they’d still have a job. The notion that the concessions being asked of them were “outrageous” are undermined by the fact that the other union, the Teamsters, agreed to them. (To my knowledge, it wasn’t the case that one got a sweeter deal than the other.)
There are questions, I suppose, as to the extent to which dissenting employees should have to live with the decisions made by their union, but I don’t see a clear-cut answer either way on that one. I tend not to have a remarkably favorable disposition when it comes to enforced union membership, and so in my world those who wanted to work could have continued to, but (a) there are good arguments going in the other direction and (b) even some of the workers striking may well have produced the exact same result. The company was hanging by a thread, and there is little indication to me that this was solely or primarily due to labor.
So what was it due to, then? That’s where Ebert (a paragon of good eating and health?) dances on their grave. I’ve seen a lot of arguments that Hostess’s problem is that they never diversified from sugary products in an age of health-consciousness. And thus the dancing, this is a market repudiation of unhealth. Yay! There are two problems with this.
First of all, the makers of Twinkies and Wonderbread also made Nature’s Pride. Nature’s Pride is a healthyish bread company. I have a loaf in my fridge and another in my freezer. Nature’s Pride has won accolades both for its naturalness (”no artificial preservatives, colors, flavors, trans fats or high fructose corn syrup”) and for its good taste. I don’t care much about the former, and don’t entirely agree with the latter, but as far as double-fiber wheat bread goes, theirs was the best. Nature’s Pride is the only product of theirs that I am going to miss. Given the inconsistent availability of double-fiber bread, if there is a health impact here it will be negative. Also, this wasn’t a me-tooism on their part: they were among the first to focus on factory hippie bread.
Second, this explanation is at odds with the notion that it was management’s fault. Which, maybe the blame of management is misguided. Ultimately, though, this is considered a big deal precisely because their Twinkies and cupcakes are beloved by large parts of the country. It just doesn’t seem to me that there is much room to argue that this is a repudiation rather than a product of a down economy and business practices.
I can pretty much guarantee that the void here is going to be filled by somebody. The Twinkies will be back. Ding Dongs and the distinct cupcakes will be back. Of all the products they made, it’s Nature’s Pride that is probably most vulnerable because they have the most direct competition (I am sincerely hoping that the supermarkets relying on Nature’s Pride simply go with a competitor so that I can still get my product.)
Meanwhile, this represents a shift from a moderate-sized competitor’s product being absorbed into a larger conglomeration. Maybe they’ll hire 18,000 employees or maybe/probably they will get by with less. To the extent that this is a triumph, it is for horizontal immigration and larger corporations. If you have ever complained at all about Frito-Lay’s dominance in the potato chip industry, this should not be seen as positive.
Heck, the end result could be Frito-Lay (and thus PepsiCo) inserting itself into the cakefood industry as well. Or maybe not because there are other cakefood companies looking to buy. Which suggests to me that any chest-pounding over a victory for our common health is off-base. Whether we blame management or labor, the primary end result of this is a temporary disruption of cakefood provisions and some permanently lost jobs.