Hostess Brands has made a lot of headlines recently. To the outside observer, it seems as though the unions are forcing the company into liquidation. What is the real story? Are unions really to blame?
Hostess’ management is correct when it says the company has to slash sales, marketing, and administrative costs (SG&A) to keep the doors open. After all, the company seems to be in and out of bankruptcy. On the flipside, the bakery union has a point when it argues poor management decisions and massive debts are the real reasons the company is in trouble, not the workers.
Who is most right? Frankly, as in most cases like this, it doesn’t really matter. Finger pointing is a no-win situation, particularly when the real problem is this: Hostess Brands sells low margin products for which there is elastic demand in a highly competitive industry. That is a fancy way of saying, you don’t really need Twinkies, Ho-Ho’s, or even Wonder Bread, particularly when there are other options available…. http://on.mgmadv.com/WxrYyu
As previously published in the Montgomery Advertiser on 11/25/12