The Breakdown

Explaining Southern California's economy

Twinkies get even more troubled

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32361 full

Hostess Brands, the company that makes Twinkies, is in bankruptcy — the second time since 2004. And if it can't come to terms with both its creditors and its union workforce, it could be game over for the allegedly indestructible cream-filled cake-y yellow tube of fun and all its snack-y brethren. A strike looms. This is from CNNMoney:

"We would no longer have cash to keep operating," said Hostess management in a letter sent to employees on Monday. "All Hostess Brands operations would shut down and liquidation would begin. The 18,500 jobs, plus the health insurance that comes with them, would be lost for good."

The company filed for bankruptcy in January...[M]anagement has said that the investors who are financing the company during bankruptcy would pull out if there is a strike.

Liquidation means that Hostess Brands would essentially be sold for parts. And you have to figure that, if there's anyone out there interested in the Twinkies brand, it would be snapped up in a serious hurry. However, this really looks more like brinksmanship, between management and labor — a classic labor struggle, with this latest bankruptcy taking on a distinctly strategic flavor. The idea is to dispense with labor obligations.

When I last posted on the Hostess Chapter 11, I received a number of comments from folks who claimed to be Hostess workers. They alleged that the company's management has...mismanaged some essential aspects of the business. This latest news give me an opportunity to follow up with management to see if the claims are founded. Stay tuned...

Follow Matthew DeBord and the DeBord Report on Twitter.

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