What they didn’t tell you about the Twinkies comeback!

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WASHINGTON (PAI) - The Associated Press recently ran a story, picked up by newspapers and TV stations nationwide, about the planned comeback of Twinkies to the nation's grocery shelves. Hostess, Twinkies' bankrupt maker, was sold. A reorganized - and smaller - company plans to send the iconic treat back to grocers in July.

But there were a few holes in AP's story, as was pointed out by Media Matters. One big one: The new Hostess will be non-union, unlike the prior Hostess, whose workers were represented by the Bakery Confectionery and Tobacco Workers and Grain Millers, the Teamsters, and several other unions. Here's their analysis:

"The Associated Press ignored significant context about the role of organized labor in its report on the comeback of Hostess brands and the iconic Twinkie snack. The article highlighted attacks from executives claiming unions were to blame for the company's demise while ignoring a history of union concessions, executive pay raises, and financial mismanagement that paint a different picture about the Twinkie's temporary expiration.

"The AP reported that Hostess Brands LLC, a trimmed-down version of the defunct Hostess Brands Inc., aims to have Twinkies and other well-known Hostess brand products back on store shelves by July 15. The story noted Hostess went bankrupt "after an acrimonious fight with its unionized workers" and described in he-said-she-said fashion how the company ultimately failed:

"'Hostess Brands Inc. was struggling for years before it filed for Chapter 11 bankruptcy reorganization in early 2012. Workers blamed the troubles on years of mismanagement, as well as a failure of executives to invest in brands to keep up with changing tastes. The company said it was weighed down by higher pension and medical costs than its competitors, whose employees weren't unionized.

"'To steer it through its bankruptcy reorganization, Hostess hired restructuring expert Greg Rayburn as its CEO. Rayburn ultimately failed to reach a contract agreement with its second largest union. In November, he blamed striking workers for crippling the company's ability to maintain normal production and announced Hostess would liquidate.'

"'The trimmed-down Hostess Brands LLC has a far less costly operating structure than the predecessor company. Some of the previous workers were hired back, but they're no longer unionized.'"

The article's depiction of the company's fall omits crucial context and leaves readers with the impression that the act of discarding union workers allowed the 'trimmed-down' company to re-emerge.

The AP did not tell readers that, just three years prior to Rayburn's negotiations with labor, union workers made "substantial concessions" to aid the company's financial health, or that Hostess stopped contributing to workers' pensions and cut wages and benefits "by 27 to 32 percent."

Nor did AP mention dramatic pay raises that Hostess provided for its executives during its financial struggles. For example, Brian Driscoll, Hostess CEO in March 2011, saw his salary triple, to $2.25 million, compared to 2010, the Wall Street Journal reported.

And while the AP story claims "workers" blame the company's woes on mismanagement and a failure to adapt to evolving consumer tastes, this has actually been the opinion of informed and objective third parties.

AP itself noted in 2012 "Hostess snacks don't neatly fit into the U.S. trend toward a healthier lifestyle." The Washington Post wrote, Hostess was "rife" with problems beyond labor issues, including "management's failure to freshen up a stale product line." The New York Times discovered the company did not "have much of a finance department."

The Twinkie's return to the U.S. diet may ultimately be perceived as a comeback story. But with myths about Hostess' demise rampant in 2012 media reports, today's media should be careful not to rewrite history.

Photo: Certain aspects of Twinkies' "comeback" have been called anything but "sweet." Hostess Brands LLC/AP

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  • I totally understand that the unions had already made numerous concessions prior to the final company dissolution. I also understand that the company management at the old company had been abysmal.

    On the other hand, I still can't understand how the former workers are now better off by refusing to make more concessions. Those Millers Union workers who have taken jobs with the new Twinkie owners have taken substantially greater compensation hits than they would have had to do under any further concessions they would have been asked to make previously.

    Maybe I misunderstand the whole point of the Millers Union decision not to negotiate any further. Perhaps they were making a broader point about the principal of negotiating with companies that keep abusing their staff rather than trying to keep jobs or maximize earning potential. It might be better to let a company collapse than set a precedent of having a union accept substandard wages.

    In short, perhaps what the unions gained is improved bargaining power in negotiations with other employers. The jobs at Hostess were a lost cause anyway.

    Posted by Sniglet, 07/09/2013 7:24pm (2 years ago)

  • the unions did kill Hostess. I live in Davenport, Ia where they made Twinkies for years and Unions striked for years. Just like Caterpillar that has a multi-million dollar facility still vacant because of the unions. They took they jobs elsewhere. Long live the Twinkie now it can survive with a reasonable wage and cost structure.

    Posted by todd, 07/08/2013 9:34pm (2 years ago)

  • The AP also failed to mention that Hostess Brands just came out of bankruptcy in 2009 and also failed to mention the hundreds of employees who were laid off at that time. They also failed to mention that only one out three employees were unionized. Yep, capitalism at it's finest!

    Posted by Pat Hudnall, 06/27/2013 8:08pm (2 years ago)

  • The AP also failed to report that Interstate Brands just came out of bankruptcy in 2009 and failed to mention the hundreds of employees who lost their jobs at that time. Yep, capitalism at it's finest!

    Posted by Pat Hudnall, 06/27/2013 8:04pm (2 years ago)

  • I'm glad you covered this. It fills in the parts left out by the main stream media.

    Posted by Babette Grunow, 06/27/2013 6:48pm (2 years ago)

  • The unions may have given some concessions in the past, but that doesn't change the fact that they were still far too expensive in today's world. The Teamster's contract that required 2 different drivers to take 2 different products from THE SAME bakery to THE SAME retail store is one example of featherbedding bloat. That the existing 11 bakeries were so underutilized that only 4 of them are being reopened -- and with less staff each -- is another example. All of those expensive, and excessive, union jobs that couldn't be cut or modified are clearly the issue, as will be proven when the new Hostess shows how you can do much more (distribution at less cost to far more sales points) with much less. Then it will be clear that the unions really were the problem.

    Posted by Dave B, 06/27/2013 2:00pm (2 years ago)

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