[pennyfarmer]

In all of these cases, of course, there were other contributing factors. These companies suffered from tough competition, bad management decisions, unfavorable trends. Over the long term, Hostess didn't go bankrupt because of the unions. It went bankrupt because it didn't keep up--possibly couldn't keep up--with cultural change. In an era of healthy living and gourmet coffee shops, Twinkies and Ho-Hos are out of place. Their only resort was to try to convince hipsters to eat Twinkies ironically.

The company was on life support with too many dependents. Looks like a mercy killing to me. :)

[chrisser]

These companies suffered from tough competition, bad management decisions, unfavorable trends. Over the long term, Hostess didn't go bankrupt because of the unions. It went bankrupt because it didn't keep up--possibly couldn't keep up--with cultural change. In an era of healthy living and gourmet coffee shops, Twinkies and Ho-Hos are out of place. Their only resort was to try to convince hipsters to eat Twinkies ironically.



A) If management makes bad decisions, then it's the shareholder's responsibility to replace them.

B) How does management make changes, especially in a labor intensive business, when the union forces them to lock into place outmoded labor practices, unsustainable salaries, and prevents automation at every turn? What, exactly, is management supposed to actually do when they can't control their major cost, and even if they can, they have to wait months or years for the next union contract negotiation to make the change, when the marketplace is changing often by the day or week?

C) Hostess made a lot more than just junk food. If the junk wasn't profitable, they would have dropped those business lines in favor of their more profitable ones. But had Hostess eliminated Twinkies, for example, would they have been able to eliminate the workers from those lines, or would they had to continue to employ them even though they were no longer needed, thus keeping all the costs while eliminating the revenue stream, and making an unprofitable line perversely less expensive to keep than eliminate?