While Hostess Brands is trying to scapegoat the workers and members of the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM), the real cause of the company's collapse can be traced back to its crony capitalism and consistently poor management.
Hostess Brands is in bankruptcy for the second time in eight years. Since the first bankruptcy in 2004, BCTGM members across the country have taken dramatic wage and benefit concessions and watched as 21 Hostess plants were shut down and thousands of jobs were lost. At the time of the first bankruptcy, Hostess workers were assured by management that money saved via concessions and plant closings would help make the company stronger, more vibrant and more competitive.
BCTGM President Frank Hurt said:
Hostess’s announcement that it is liquidating the company is a deep disappointment for all of our Hostess members. While Hostess management wants to blame our members for the demise of the company, the truth is that had it not been for the valiant efforts of our members over the last eight years, including accepting significant wage and benefit concessions after the first bankruptcy, this company would have gone out of business long ago.
Hostess failed because its six management teams over the last eight years were unable to make it a profitable, successful business enterprise. Despite a commitment from the company after the first bankruptcy that the resources derived from the workers’ concessions would be plowed back into the company, this never materialized. Management refused to invest in modernizing its bakeries or devote necessary resources to advertising and marketing, product development and new technology. Business plan after business plan failed, leaving the company ever deeper in debt.
Six CEOs in 10 years have failed to turn the company around. Since 2001, plants were closed and thousands of workers laid off, yet the company still isn't viable. Now, 18,000 workers will lose their jobs.
These new infographics show the pattern of mismanagement over the years and the amount of debt Hostess Brands owes to lease obligations, trade creditors, accrued workers' compensation liabilities and more.
Please share them to spread the word about Hostess' Bain-style tactics.
These workers, who consistently make great products Americans love and have offered multiple concessions, want their company to succeed. They have bravely taken a stand against the corporate race-to-the-bottom. And now they and their communities are suffering the tragedy of a needless layoff. This is wrong. It has to stop. It’s wrecking America.