A Surprise For Lunch

I can still remember it.  When I was a kid I took my lunch to school.  Most days anyway.  My Mom made a great lunch.  She knew what I liked.  The sandwiches were yummy.  Usually some chips.  Maybe an apple or orange.  And every once in a while for a special treat...a Hostess Cupcake.  Sometimes a Snowball but she knew I liked Cupcakes the best.  When I opened my lunch and saw that there was a Hostess Cupcake included, all was right with the world.  We were always trading stuff, but I rarely traded a cupcake.  Maybe with my Italian friend who's Mom made the best sandwiches with all kinds of exotic meats (and then only a small piece of sandwich).  But that was it!

So now I open up the fishwrap this morning and read the sad story of the demise of Hostess.  Lots of joking done today about the hording of hostess products.  Funny little blurbs on the news.  One of the local stations even had one of their talking heads go out and buy a bunch of Hostess products and sample them on air.  Like we needed to be reminded about Twinkies, Cupcakes, Snowballs, Ho Ho's, Donettes, Ding Dongs, and Wonder Bread to name a few.  Now they are gone.  The conventional wisdom is that someone will come along, buy the recipes and rights, and we'll see them on the shelves before you know it.  But it won't be the same.  Just won't.  Now I know that this stuff isn't good for you.  That they are full of sugar and preservatives.  That if you eat too many/too much, you'll wind up looking like a favorite cartoon character from my youth, Porky Pig.  But there is just something sorta iconic about the brand.  And I'm sorry to see them go.

But the larger story is why.  Lots of blame to go around.  As usual...he said, she said.  There's a pretty good explanation of both sides here.  Some say bad management and greedy Wall Streeters.  Some say union thugs demanding too much.  I think that there are several contributors.  Hostess probably didn't respond too well to the newly health concious America.  Maybe they could have diversified their products a bit better.  They got in trouble financially during the boom years.  Generous salaries.  Perks.  Overly generous pensions.  And they couldn't walk it back.  Not with a union lurking nearby.  So finally a couple of hedge funds come in to do what hedge funds do.  Identify a distressed company.  Buy the stock.  Come in a squeeze out ineffeciencies.  Put in your management team.  Look for opportunities to grow the company.  Streamline.  But not all those endeavors work.  And it sounds like this one was a long shot from the beginning.  For it to work would mean the stars would have to align.  And that alignment includes labor.  Meanwhile, the union idiots only want more.  The bosses demand, demand, demand.  No concessions.  Don't let the scabs cross the line.  So the hedge funds finally give up.  They could keep trying but not in the face of determined opposition.  The employees can't say they weren't warned.  The company was clear that without concessions they would close.  And they did.  And 18,500 people are out of a job.  So just how is it better that the company closes and all those people lose their jobs rather than take some concessions?  I've not seen any statistics on salaries or benefits. But I'd bet that conditions and salaries weren't so bad that it warranted the loss of 18,500 jobs.

So another one bites the dust.  It isn't new.  It isn't earth shattering.  Life will go on.  But I will always have a soft spot in my heart when I remember opening the bag and seeing the cupcake...