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The Free Market Killed Hostess, And Thatís A Good Thing
OutsideTheBeltway.com ^ | 11/16/12 | DOUG MATACONIS

Posted on 11/19/2012 11:01:40 AM PST by GSWarrior

This morning’s news that Hostess Brands, Inc. was shutting its doors after 82 years of operation (originally under the name International Bakeries Corporation) has elicited a lot of commentary from various sources. Culturally, I’m seeing a lot of people lament the fact that some of their favorite brands of snack food or bread — from Twinkies to Ho-Hos to Wonder Bread to Beefsteak Rye Bread — will no longer be available. Politically, there’s been a definite theme on the right blaming the Baker’s Union for the company’s collapse since they would not agree to a modification of their contract notwithstanding the fact that they had been warned that this would happen, and that even the Teamsters Union warned them that they were risking the fate of the company and everyone’s jobs by being so stubborn. Both of these reactions strike me as being wildly over blown, based largely on common misunderstandings of what actually happens in Bankruptcy Court and the business world, and both miss the point that the death of Hostess Brands is a fairly good example of the free market in action.

(Excerpt) Read more at outsidethebeltway.com ...


TOPICS: Business/Economy; Miscellaneous; Society
KEYWORDS: bankruptcy; freemarket; hostess; unions
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1 posted on 11/19/2012 11:01:48 AM PST by GSWarrior
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To: GSWarrior
This analysis is completely off-base.

The market for the company's projects was shrinking, it is true.

When this happens, the normal reaction for a business is to reduce costs and find out ways to improve its sales by investing in other business lines.

However, the unions prevented the company from having the flexibility to cut costs and finance growth.

2 posted on 11/19/2012 11:05:37 AM PST by wideawake
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To: GSWarrior
According to the contract Hostess had with the union prior to filing for bankruptcy, shipments containing both bread and bakery items couldn't be shipped consolidated freight, they had to be made in two separate trucks.

I'd bet the contract was full of little added costs like this.

3 posted on 11/19/2012 11:10:02 AM PST by skeeter
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To: GSWarrior
Boy, just reading the comments on that article is like a “who’s who in Moron-Land”...
4 posted on 11/19/2012 11:12:31 AM PST by RavenATB
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To: wideawake
Not to mention back when I was in St. Louis the Hostess bakery there was being attacked by the EPA and the econuts because -- get this- the odor of baking yeast bread. It smelled like heaven but as I recall there were regulations in play that were going to force the bakery to renovate to insure that no odiferous pleasantries were emitted that could delight the senses.
5 posted on 11/19/2012 11:13:11 AM PST by piasa (Attitude adjustments offered here free of charge)
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To: wideawake

I think the issue is, the locations where the bakeries were enabled them to deliver fresher products to these markets ... don’t know if this was critical in their business model.

I buy chips made in North Carolina all the time in Washington.

So..

There can be a rational argument that the free market killed this company (we will never be able to prove or disprove this) but there is an absolute proven fact that the union kept them from having the flexibility for the Hostess company to have an opportunity to reinvent themselves to save these jobs.


6 posted on 11/19/2012 11:14:21 AM PST by dila813
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To: piasa

I’m with you! I grew up in Milwaukee and driving past the breweries and smelling that heavenly yeasty goodness was the only good part about living there! (We escaped in 1970...)


7 posted on 11/19/2012 11:20:32 AM PST by Diana in Wisconsin (I don't have 'Hobbies.' I'm developing a robust Post-Apocalyptic skill set...)
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To: GSWarrior
Hostess was providing jobs for many people just simply not able to master any job requiring much skill.

You can't pay workers more than they can produce with their efforts.

It will serve the union right if someone moves the brands to Mexico.

8 posted on 11/19/2012 11:20:36 AM PST by SWAMPSNIPER (')
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To: GSWarrior

What would any one expect a union loving socialist to say.


9 posted on 11/19/2012 11:21:37 AM PST by ravenwolf
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To: GSWarrior

Free market? I’m 47 and I’ve never seen a free market. Did it slip in during the night and kill Hostess?


10 posted on 11/19/2012 11:28:14 AM PST by SampleMan (Feral Humans are the refuse of socialism.)
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To: GSWarrior

Hostess went Galt...


11 posted on 11/19/2012 11:29:28 AM PST by TheDon (In 2012, American voters chose European style big gov't.)
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To: GSWarrior
"Both of these reactions strike me as being wildly over blown, based largely on common misunderstandings of what actually happens in Bankruptcy Court and the business world, and both miss the point that the death of Hostess Brands is a fairly good example of the free market in action."

So... good for Hostess? Bad for GM?

12 posted on 11/19/2012 11:29:53 AM PST by Mr. K (some days even my lucky rocketship underpants don't help...)
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To: GSWarrior

There was an article where the president of the union blamed Romney and Bain Capitol for causing the bankruptcy.


13 posted on 11/19/2012 11:35:08 AM PST by SkyDancer (Live your life in such a way that the Westboro church shows up at your funeral)
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To: GSWarrior
The articles conclusions are false: The UNION and its goons killed Hostess, Twinkies and their cup cakes. The union THUGS who support Obozo thought they could roll Hostess and instead, Hostess told Obozo and his thug unionestas to "hit the road". They deserve everything that is coming to them. Once sold the new owners should move the entire operation to a "right to work state" and FIRE every union member that worked for Hostess and hire replacements for all of them.

The union workers had a chance to not only save their jobs, but save the Hostess company as well! Instead the union workers and the greedy union thugs chose to kill their own jobs and the company to boot! How in heavens name they could chose to do this to themselves and to their families in this totally failed and failing economy is beyond all reason and comprehension.

After their unemployment benefits all run out, the banks foreclose on their homes and these union workers lose everything, I hope they and their families enjoy living on the street, in their cars and in homeless shelters because they have no one to blame for the mess they are in but THEMSELVES. As for the union leadership THUG bosses who motivated them to take this delusional course of self destruction... they will still "land on their feet" and will as Hans Gruber so aptly put it; "We will be sitting on a beach, earning 20%."

Lord willing, other union workers will finally wake up, learn the "Hostess lesson" and realize that their union overlord, thug bosses do not care about them or the companies that employ them and pay their salary, but only care about themselves, their wealth and their power.

14 posted on 11/19/2012 11:35:08 AM PST by Jmouse007 (Lord deliver us from evil, in Jesus name, amen.)
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To: GSWarrior

we haven’t had a free market in at least a century


15 posted on 11/19/2012 11:40:56 AM PST by GeronL (http://asspos.blogspot.com)
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To: GeronL

So true.


16 posted on 11/19/2012 11:42:15 AM PST by GSWarrior
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To: Jmouse007

Yes, I hope to see them reopen in a Right to Work State. Let’s call that FREEDOM to work state. Oh no! Hostess took their pensions? Mine, too. Get a real life, you union toadies.


17 posted on 11/19/2012 11:44:52 AM PST by bboop (does not suffer fools gladly)
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To: TheDon
Hostess went Galt...

Hostess went 20th Century Motors... but there is no magical perpetual motion Twinkie hidden in the ruins.

18 posted on 11/19/2012 11:46:47 AM PST by KarlInOhio (Big Bird is a brood parasite: laid in our nest 43 years ago and we are still feeding him.)
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To: dila813

They were on their SECOND trip through bankruptcy court ~ obviously a management, technology and marketing problem.


19 posted on 11/19/2012 11:49:18 AM PST by muawiyah
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To: Diana in Wisconsin

Having live on the island of Oahu - driving past the Dole Pineapple plant was like a blast of thousands fresh baked Pineapple up side down cakes coming out of the oven. My what a wonderful aroma~


20 posted on 11/19/2012 11:51:33 AM PST by Red_Devil 232 (VietVet - USMC All Ready On The Right? All Ready On The Left? All Ready On The Firing Line!)
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