George Will’s article "Digesting the Twinkies’ lessons" (Nov. 25) tries to wrap an example of failed vulture capitalism with union rules, right to work, TARP and other red meat to enable him to make his continuing case that unions are the problem
Nonsense. Hostess had problems. It was a brand in decline after no one had invested in it with new flavor variants, new products, packaging, bold marketing or any of the other strategies that well-run capitalistic consumer companies use to keep their product relevant to an increasingly picky consumer. The purpose of bankruptcy is to buy time and used that time wisely. Twice, the new Hostess management used bankruptcy to pay themselves more fees, avoid payments to vendors and demand concessions from the work force. They were clearly milking the company by reducing their labor costs and coasting.
Hostess had assets that bakery companies take years to develop. A phenomenal name recognition, 18,500 loyal workers, 33 bakeries across a wide geography, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States. Plus shelf space in major grocery chains and gas station convenience stores. None of these were being leveraged to effect.
Bankruptcy and those assets should have bought time to refresh and reposition the products, and maybe restructure the operations with the help of the unions and their members. Unions cannot develop new products and strategies, only creative management can. But unions have to buy into the vision. There has to be shared sacrifice. They cannot keep asking their members to live on reduced circumstances forever. Eventually there is nothing left to give.
Bakeries will not move to right-to-work states. They stock store shelves daily. They need to be close to the consumers. They need to sell to their neighbors. Bakeries need to take advantage of the social capital created by good-paying jobs that create consumers to grow the economy, not wages that eventually lead to a death spiral resulting in workers as wards of the state.
Malcolm D. Spence • Florissant