Hostess, the maker of Twinkies, Ding-Dongs, Ho-Ho's, and Wonder Bread has given the union a firm order to accept wage cuts, else the company will liquidate.
Only fools would voluntarily vote for liquidation, but with the clock ticking down to mere hours to come to agreement, it appears the fools will win the day.
Please consider Hostess to liquidate if bakers' strike continues through Thursday.
Hostess Brands said Wednesday that it will go into liquidation unless bakers striking in protest against a new contract imposed in bankruptcy court return to work by the end of the day Thursday.End of Twinkies?
"We simply do not have the financial resources to survive an ongoing national strike," Hostess CEO Greg Rayburn said in a statement.
The liquidation would result in Hostess' nearly 18,000 workers losing their jobs. The bakers' union represents around 5,000.
The union did not immediately respond to a request for comment Wednesday, but has called the concessions demanded in the new contract "outrageous."
"Our members are on strike because they have had enough," bakers' union president Frank Hurt said in a statement Tuesday. "They are not willing to take draconian wage and benefit cuts on top of the significant concessions they made in 2004 and give up their pension so that the Wall Street vulture capitalists in control of this company can walk away with millions of dollars."
The bakers' union would rather have no job than reduced wages. Lovely. Good luck finding another job in this environment.
I have little sympathy for those who voluntarily walk away from their jobs in these trying times.
However, this is probably not the end of Twinkies, Ding-Dongs, or Ho-Ho's.
Not that anyone needs to be eating such non-nutritional junk food, but those names and recipes will likely be sold and produced elsewhere, probably at a lower cost to consumers, especially if the buyer does not have to deal with the bakers' union.
The union will likely have to deal with the Pension Benefit Guarantee Corporation (US Taxpayers) and I expect massive haircuts in their plan (as well as screams from the union when it happens).
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com