Posted on 11/19/2012 11:01:40 AM PST by GSWarrior
This mornings 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, Im 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, theres been a definite theme on the right blaming the Bakers Union for the companys 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 everyones 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 ...
I am not an expect on the distribution of bakery products. However, I think these bakery’s were scattered all around the country so that they could ship competitively to all markets. I do not think you could have a bakery in just Texas, Utah, AL and be competitive to WA, ME and IL. Unless that is you are willing to give up 50% of the US market.
“Free market? Im 47 and Ive never seen a free market.”
was just what I was going to type. Same age too.
But I’ll add something that will be very unpopular here. The corruption of the free market has been a two way street. Yes the govt holds most of the blame, but some blame can be pointed at the publically traded corps too.
I lived in Naples, Italy, the Kimbo coffee facility was near one of the shopping area’s we would go to. I would drive a few laps down wind to soak it in. I miss it.
The company was mismanaged to the left, (like GM), and should have refused union demands (and made the necessary changes) long before the earlier bankruptcies, but the murder was done by the Bakers. All the management did was to enable them, admittedly with OPM. Investors who invest in crony capitalist enterprises are not investing in capitalism, and should be more careful.
Yes, many large corporations love byzantine regulations. I was about 30 before I realized that. It is a form of monopoly to keep smaller players from becoming competition. If you require a team of lawyers to win a contract, that cuts out most of American businesses.
Corporations have done more harm to the republic than any other entity. Their lobbyist that lamented 50 different state regulations empowered FedGov@#153 quest for regulatory dominance thru OHA EPA etc. Corporations HATE states rights.
You still have to get raw materials to the factory.
Regardless of where it is.
There is an advantage on some products due to shelf life. This mainly effected the wonder bread etc...
Most of the sweets certainly can be centrally manufactured. No need to have all of these factories.
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