There's an old wives' tale that Hostess Twinkies could survive a nuclear war. They couldn't, of course, and neither could they survive a vote to kill the company by the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union.
That's the group of 5,000 Hostess employees who recently refused to accept an offer by the company to cut their salaries and benefits to save their jobs. Now the maker of Wonder Bread, DingDongs and Ho Hos is shutting its doors for good, and 18,500 workers — including the 13,500 who weren't members of the union — are unemployed just in time for the holidays.
The company, which was in the midst of its second bankruptcy filing since 2004, had asked the union to agree to an eight percent salary reduction that would then rise over the next four years — not to original levels, but quite a bit. The company also wanted to reduce its pension benefits and health care plan contributions. Meanwhile, it offered employees partial ownership of the company along with reserving two slots on its two-member board of directors.
Sound like a reasonable deal in order to save their jobs? It was not enough for the union, which voted no. When the company announced it was going out of business, the union predictably did not look at itself in the mirror. Instead, it blamed poor management — and, of course, there was some — along with "vulture capitalists."
No one likes getting a pay cut, but even the company's 6,700 Teamsters, recognizing the company's financial situation, narrowly voted for the deal. While also blaming management, the Teamsters pointed out "the company's operating and financial problems were so severe that it required steep concessions from a variety of stakeholders, but not all stakeholders were willing to be constructive."
Brands — even iconic ones like Hostess — come and go. The free market allows fresh ideas to flourish and stale ones to be taken off the shelf. It rewards companies that meet consumer demand and punishes even beloved ones that don't change, which is why consumers no longer can buy a new Oldsmobile or Pontiac car or go shopping at Circuit City. Hostess faced plenty of competition, so it was never foreordained to survive forever, but in this case, it didn't die a natural death. The company's union employees shot it and themselves.
Ironically, not much is going to change. The "vulture capitalists" will still make money. Wall Street isn't going anywhere. The seven-figure-salary Hostess executives will make seven figures elsewhere, unless they decide to retire rich. The future Twinkie factories will employ thousands of people grateful to have a job. And, one way or another, consumers will get their Twinkies and Ding Dongs.
The only losers in this situation are the union members and their unfortunate co-workers, some of whom hopefully will get their jobs back under new ownership. It's foreseeable that some members of the old union will go back to their old jobs as well — only this time, they won't have collective bargaining.
So don't worry: After a brief delay while the assets change hands, you'll soon be able to enjoy the chocolatey bliss of a Cup Cake and lick the powdered sugar off your fingertips after scarfing down those little white Donettes. You'll just be paying somebody other than the members of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union for the privilege.
That's because they chose the nuclear option: Press the button and destroy just about everything. However, in this case, the old wives' tale was correct: The Twinkies really did survive. But the union and its jobs are gone for good.
Fox News commentator Noelle Nikpour is completing her first book, "Branding of America." Follow her on Twitter at @NoelleNikpour and respond to this column at letters@sun-sentinel.com.
