Update: The Hostess Story, or Wikipedia Versus Big Media

Dustbury mentions Hostess, which prompts me to look for more info, but I find nothing substantial. I found a couple of nonsensical articles on Forbes, and some random accusations elsewhere on the web, but nowhere did I find any kind of cogent explanation of what happened, until I finally went to Wikipedia, where I found this:

Additionally, a press release was issued by the BCTGM International Union on the same day which stated in part, “When a highly-respected financial consultant, hired by Hostess, determined earlier this year that the company’s business plan to exit bankruptcy was guaranteed to fail because it left the company with unsustainable debt levels, our members knew that the massive wage and benefit concessions the company was demanding would go straight to Wall Street investors and not back into the company."^[31]

    So the company collapses and all the union workers are out of a job, but Hostess is a big company and their exit is going to create a hole in the market, and whoever fills it is going to need bakers, so these guys are probably going to be going back to work within a year, though probably not for the same wages.
    Hostess owed $860 million and had 20,000 employees. That's $43,000 of debt per employee, which is probably about what the annual cost of an employee was. Hard to tell where all that debt came from, but looking back over Hostesses recent history we have a string of finanacial shufflings that look like some Wall Street whiz kid was looking to make a killing (excerpt from Wikipedia's article on Hostess):

• • 1.3 DPF (1975)
  • 1.4 Interstate Bakeries (1981)
  • 1.5 IBC Holdings (1987)
  • 1.6 Interstate Bakeries (1991)
    • 1.6.1 Continental Baking merger (1995)
    • 1.6.2 Bankruptcy (2004)
  • 1.7 Hostess Brands, Inc. (2009)
    • 1.7.1 Bankruptcy and liquidation (2012)

Update: Mary Sanchez of the Kansas City Star has something to say about this. I agree with her. Her column, written two weeks ago, finally showed up in my local paper this morning. I couldn't find her column in the online version of The Oregonian.