The Right Opinion

Digesting the Twinkies' Lessons

By George Will · Nov. 25, 2012

“All Gods were immortal.” – Stanislaw Lec

WASHINGTON – And also brands, the gods of the marketplace. Earthquakes may strike, dynasties may fall and locusts may devour the crops, but Oldsmobile and Pan Am are forever. Never mind.

But about the death of Twinkies: Write obituaries in the subjunctive mood. Like Lazarus, but for a reason more mundane than miraculous, this confection may be resurrected. In any case, the crisis of Hostess Brands Inc., the maker of Twinkies, involves two potent lessons. First, market forces will have their way. Second, never underestimate baby boomer nostalgia, which is acute narcissism. The Twinkies melodrama has the boomers thinking – as usual, about themselves: If an 82-year-old brand can die, so can we. Is that even legal?

The late Daniel Boorstin, historian and Librarian of Congress, said Americans belong to “consumption communities.” Are you a Ford or Chevy person? Sears Roebuck or Montgomery Ward? Camels or Chesterfields? Wooed by advertising, people plight their troths to brands in marriages that often are more durable than boomers' actual marriages.

Hostess, which had 18,500 employees making and distributing more than 30 brands made in 36 plants, had been in and out of bankruptcy several times since 2004. Its terminal crisis began on Nov. 9 when thousands of members of the bakers union went out on strike to protest wage, health care and pension cuts imposed by a court. The bakers objected to a 17 percent increase in their contribution for their health care benefits.

Amazingly, Washington did not offer Hostess a bailout. This discriminatory policy may be a constitutional violation – denial of equal protection of the laws. Since the onset of the financial crisis, the government has decided that some SIFIs are TBTF – some systemically important financial institutions are too big to fail. Why, any fair-minded person will ask, was Hostess not TBTF?

Granted, it was not big in the technical, crabbed, hairsplitting, narrow-minded way that “big” is normally understood, as a boring matter of mere size. It was, however, big in what matters most – in boomers' minds. They fondly remember opening their Roy Rogers or Hopalong Cassidy or Davy Crockett lunchboxes at school and finding Twinkies nestled next to peanut butter and jelly sandwiches made of Wonder Bread (another endangered Hostess species). Stendhal said that the only way ice cream could be better is if it were a sin. Boomers, a generation of food scolds, became adults who considered Twinkies and other sugary things sinful. They should be shedding scalding tears of remorse.

Anyway, why GM and not Hostess? The Troubled Asset Relief Program, aka TARP, was passed to rescue financial institutions. But Washington reasoned: “What's legality among cronies?” So soon TARP was succoring GM, which was not a financial institution. It was not even a car company. It was a health care provider unsuccessfully trying to sell cars fast enough to generate enough revenue to pay health benefits for its employees and approximately twice as many retirees.

Hostess had in its far-flung operations 372 collective bargaining agreements with various unions that had sought and received – shed no tears for complicit management – some interesting benefits. The Teamsters liked the rule that bread and pastries might be going to the same place but must go in different trucks.

The bakers rejected management's final offer by a voice vote. The Teamsters, who favored a compromise, wanted there to be a secret ballot. This is insouciant insolence by the Teamsters, who are situational ethicists. In Washington, operating from impressive headquarters located on prime real estate at the foot of Capitol Hill, the union's leadership has lobbied Congress for the Employee Free Choice Act. That is the Orwellian title of legislation that would effectively abolish employees' right to secret ballots in unionization elections, replacing them with “card check,” whereby individuals confronted by union organizers sign a card indicating support for the union.

The market said that Hostess as configured made no sense. If, however, Twinkies and perhaps other Hostess brands retain value, the market will say so, and someone will produce them. Probably in a right-to-work state, which is how “entrepreneurial federalism” (another Boorstin phrase) should work: Business moves to states that make it welcome.

Whatever else a hospital ought to do, supposedly said Florence Nightingale, it ought not to spread disease. And whatever else unions should do, they should not put employers out of business.

© 2012, Washington Post Writers Group

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17 Comments

Tod the tool guy in brooklyn ny said:

Uncle George---Hopalong Cassidy lunch boxes, with thermos, now selling for $5O.OO, on line!! Organized labor cannot save a company, if there is a dwindling market for your products. You did not mention the FOOD POLICE, and their role in downsizing Hostess. Moochelle and her lemings have been bashing sugary products. Mayor Doomberg hates corn syrup. "Bean sprouts and celery aren't just for rabbits, folks.How 'bout a nice plankton sandwich today-You'll have a whale of a time at noon!" LOLG.Will.

Sunday, November 25, 2012 at 6:13 AM

wjm in Colorado said:

Once upon a time, the slogan was "Union Yes". In the past a union product was a good thing, now it is a mark of failure, and a lousy product that nobody wants unless subsidised by government. FORWARD. If it is union, I am not buying.

Sunday, November 25, 2012 at 8:52 AM

BlueShadowII in Texas replied:

I wonder how many products wear 'the union label' and "Made in the USA".

Sunday, November 25, 2012 at 9:14 AM

richard ryan in Lamar,Missouri replied:

Right on wjm. GM is a prime example of that. One of my daughters owned (notice I said owed as in past tense) a 2009 Chevy Cobalt, and a friend of mine recently traded for a 2009 Chevy Impala. Both pieces of crap. Also both carrying the union label. Of course Obama saved them, but since 70% of GM is now manufactured in China and with their R&D soon to be located in China, apparently he saved them for the Chinks. Unless someone in the US House grows some balls and institutes impeachment proceedings over the Benghazi and other Obama scandals, this country will not survive another 4 years.

Sunday, November 25, 2012 at 1:32 PM

Howard Last in Wyoming replied:

Since 1976 we have owned only GMC trucks. My next pickup will be a F250 as I will not buy Govmint Motors.

Richard as long as we have the current crop of Republican Leaders (still an oxymoron) Barry will be home safe. Almost all of the republicans in Congress know Barry does not meet the Constitutional requirements (Natural Born citizen) to be President, but will not do a damn thing about it.

Sunday, November 25, 2012 at 6:13 PM

richard ryan in Lamar,Missouri replied:

Agreed Howard. I`m certainly not holding my breath. When we have people like Bonehead Boehner and Jellyfish Blunt there`s not much hope for any change for the better.

Sunday, November 25, 2012 at 8:55 PM

Wayne in Hinesville, GA said:

One commentator made the remark that if the unions gave in to Hostess the workers would have a problem making their mortgage and car payments. I wonder how they are going to pay them now with no pay check. Plain and simple stupidity on the union workers part. it's better to be without a job than to give up some benefits. It would be justice if they lost their homes and cars because of being greedy.

Sunday, November 25, 2012 at 9:14 AM

MajorStu in Peru, IN replied:

Hostess workers rejected an 8% pay reduction and 17% increase in contributions to health care and retirement. They got a 100% pay reduction in exchange. Well played, unions, well played. But they've got their pride in unity to take to the bank.

Monday, November 26, 2012 at 2:28 PM

Gregory in Lincoln City Or. said:

Nothing makes the dead-enders chortle with glee more than misunderstanding a business failure, or more astonished than to realize they were completely wrong in their expectations of political campaigns.

By scape goating the unions you reveal your foolishness. Corporations exist for one reason: to make money for share holders. Unions exist as a proper defense against management excess. Hostess went down after a long series of management mistakes.

Small thinking bitterines...so negative, spiteful and vindictive...it's great to see you diminish yourselves into nothingness.

Sunday, November 25, 2012 at 11:45 AM

Wayne in Hinesville, GA replied:

The only nothingness around here is you. Apparently you didn't bother to check out the 300 different labor agreements the unions had with Hostess. One of them being that Twinkies and Wonder Bread had to be delivered in different trucks even if they were going to the same destination. Talk about stupidity on managements part, what about that type of downright idiocy on the unions part. It is hilarious to think unions exist to keep management excess down when the unions have become greedy and are more excessive in their demands. They have basically driven manufacturing out of this country with their greed. Bankrupted GM and Chrysler to the point the taxpayers had to bail them out. We'll never see any return on our money but that okay with idiots like you because apparently you could care less. Do unions create any jobs other than at the leadership level? Give me one instance where a union created a job in an industry and management didn't pay for that job?

Sunday, November 25, 2012 at 1:41 PM

MajorStu in Peru, IN replied:

Having worked for GM (salaried) and seen the excessive demands of the UAW first-hand, it's no wonder they've been literally decimated in the last 25 years. As for your instance, I cite the thousands of jobs created in the Maquiladora zone of Mexico by the UAW. Management was obligated to offer new product lines to the UAW in exchange for contract concessions, which were routinely rejected - so the new lines went to Mexico, and when the old product lines dies off, the UAW workers were laid off.

Monday, November 26, 2012 at 2:25 PM

Joe Redneck in Maine replied:

"Hostess went down after a long series of management mistakes."
The long series of management mistakes was agreeing to some of the ludicrous Collective Bargaining Agreements. Again I would say, if it so easy to run this business, why don't the Unions purchase it and make a profit.

Monday, November 26, 2012 at 12:57 PM

Army Officer (Ret) in Kansas said:

I remember the old commercials with the jingle "Look for the union label."

I find those labels to be helpful - they tell me which products to avoid.

Sunday, November 25, 2012 at 7:56 PM

M Rick Timms MD in Georgia replied:

The union garment may fall apart, but there is no way you could get "the union label" to come out. That part is sewn in extra secure, by union contract no doubt.

Hopefully a nice company with lots of happy employees in a right to work state will buy the brands and put them back on the shelves,,, out of the same truck, loaded by the same guy.

Sunday, November 25, 2012 at 8:51 PM

M Rick Timms MD in Georgia replied:

The union garment may fall apart, but there is no way you could get "the union label" to come out. That part is sewn in extra secure, by union contract no doubt.

Hopefully a nice company with lots of happy employees in a right to work state will buy the brands and put them back on the shelves,,, out of the same truck, loaded by the same guy.

Sunday, November 25, 2012 at 8:56 PM

Hard Thought in Vicenza, Italy said:

Looking at Joe's comment about net flow of funds, I went and looked it up.

The funds he complains about are subsidies given to people not to grow things. Think that one through.

The state with the highest outflow to the least return is Delaware. Why is that? Lot's of those cold, soulless, greedy corporations are incorporated in Delaware because of state taxes, not federal. So all those dollars that are recouped at the checkount counter count as tax outflow.

It is more than just numbers. A person in Missouri making enough to raise a family, buy a six pack and go fishing is existentially happier than a millionaire in Bel Air with ulcers, deadlines and 90 hour weeks.

The numbers lie about what is income and outgo. Check what it is for.

Tuesday, November 27, 2012 at 6:55 AM

Robert A. Hall in Des Plaines IL said:

One reason was that Hostess failed after the election, when Obama no longer has to care about union jobs. I was a Tasty Kake kid anyway, not that my diet now allows such. I will link to this from my Old Jarhead blog

Robert A. Hall
Massachusetts Senate, 1973-83
Author: The Coming Collapse of the American Republic
(All royalties go to a charity to help wounded veterans)
For a free PDF of my 80-page book, write tartanmarine(at)gmail.com

Tuesday, November 27, 2012 at 11:11 AM