Alas Poor Twinkie, Parting is Such Sweet Sorrow, RIP
Mon Nov 19, 2012 6:37 pm
#25766- RickMember
RIP Twinkie
Hostess Proves Twinkies Are Perishable After All
Forbes contributor Adam Hartung wrote an excellent piece last week detailing the current state of Hostess Brands, which recently filed for liquidation in bankruptcy court. Hostess, a company that is rich in tradition that spans 82 years, is home to Wonder Bread and Twinkies, the popular snack food that is often joked about suggesting that it can survive a nuclear disaster. So I find it striking that Hostess the company is unable to endure what has really been a rash of poor management decisions. Still, for the company’s failures, this time management pointed the blame on the company’s workforce, which in of itself is inexcusable.
What Does It All Mean?
Seeking shelter from creditors during a “restructuring” period is nothing out of the ordinary. For many companies it is standard operating procedure. In fact, several prominent names have emerged out of bankruptcy protection stronger than ever. Names such as General Motors, Eddie Bauer, Kmart and lest we forget the entire airline industry, all have used this route to their advantage. Most recently, even Kodak has embraced this as its only viable alternative.
However, for Hostess, this is the second time in less than a decade that it is seeking shelter from creditors. This means as it moves to sell its assets, roughly 18,500 employees will be out of work after the company has already discontinued operations in its 33 plants, all of which are in the U.S. The obvious question is, can the company survive? It’s hard to imagine that Twinkies the icon might be gone for good as this would be a sad occurrence for 7-Elevens and other quick stop shops everywhere across the country.
For the brand to survive however, it will need for its auction process to net enough cash to preserve its interest. Otherwise what would have been the point? But it has a chance. The company’s assets can become valuable properties of several of its rivals. For that matter, I would imagine that its production machinery as well as several proprietary items such as recipes might make great additions to Kellogg’s, Kraft and even beverage giants CoCa-Cola and Pepsi. “Have a Coke and a Twinkie” has a nice ring to it – a smile is optional.
Likewise, there’s an outside chance that a company such as Nabisco or even Bimbo, which once made a bid for Hostess during the first bankruptcy filing might again develop an interest. But it’s a long shot. At this point, it’s really hard to say what the next step will be. We can all speculate all we want about what’s to come, but this will mean very little to the almost 20,000 employees that will be out of work. But this all could have been avoided had the company had better management.
Bottom Line
As the company’s assets must now go to the highest bidder, this serves as yet another example of how managerial incompetence and what has been the effect of a stubborn labor dispute is able to ruin another American tradition. Hopefully the brand can re-emerge as part of a company such as Keebler or Mondelez with proven track records that is able to make Twinkies the non-perishable item for which it is known.
Hostess Proves Twinkies Are Perishable After All
Forbes contributor Adam Hartung wrote an excellent piece last week detailing the current state of Hostess Brands, which recently filed for liquidation in bankruptcy court. Hostess, a company that is rich in tradition that spans 82 years, is home to Wonder Bread and Twinkies, the popular snack food that is often joked about suggesting that it can survive a nuclear disaster. So I find it striking that Hostess the company is unable to endure what has really been a rash of poor management decisions. Still, for the company’s failures, this time management pointed the blame on the company’s workforce, which in of itself is inexcusable.
What Does It All Mean?
Seeking shelter from creditors during a “restructuring” period is nothing out of the ordinary. For many companies it is standard operating procedure. In fact, several prominent names have emerged out of bankruptcy protection stronger than ever. Names such as General Motors, Eddie Bauer, Kmart and lest we forget the entire airline industry, all have used this route to their advantage. Most recently, even Kodak has embraced this as its only viable alternative.
However, for Hostess, this is the second time in less than a decade that it is seeking shelter from creditors. This means as it moves to sell its assets, roughly 18,500 employees will be out of work after the company has already discontinued operations in its 33 plants, all of which are in the U.S. The obvious question is, can the company survive? It’s hard to imagine that Twinkies the icon might be gone for good as this would be a sad occurrence for 7-Elevens and other quick stop shops everywhere across the country.
For the brand to survive however, it will need for its auction process to net enough cash to preserve its interest. Otherwise what would have been the point? But it has a chance. The company’s assets can become valuable properties of several of its rivals. For that matter, I would imagine that its production machinery as well as several proprietary items such as recipes might make great additions to Kellogg’s, Kraft and even beverage giants CoCa-Cola and Pepsi. “Have a Coke and a Twinkie” has a nice ring to it – a smile is optional.
Likewise, there’s an outside chance that a company such as Nabisco or even Bimbo, which once made a bid for Hostess during the first bankruptcy filing might again develop an interest. But it’s a long shot. At this point, it’s really hard to say what the next step will be. We can all speculate all we want about what’s to come, but this will mean very little to the almost 20,000 employees that will be out of work. But this all could have been avoided had the company had better management.
Bottom Line
As the company’s assets must now go to the highest bidder, this serves as yet another example of how managerial incompetence and what has been the effect of a stubborn labor dispute is able to ruin another American tradition. Hopefully the brand can re-emerge as part of a company such as Keebler or Mondelez with proven track records that is able to make Twinkies the non-perishable item for which it is known.
Mon Nov 19, 2012 7:09 pm
#25786- o_homescrub_oMember
- Location : Wash DC
never ate one. See them all the time in the snack isle, and I never buy them. At $3.99 a box, I just don't even bother.
So I buy bacon instead.
So I buy bacon instead.
Tue Nov 20, 2012 12:31 am
#25849- SPOOKFORCEMember
I've never had one either. Missed opportunities...
Tue Nov 20, 2012 1:58 am
#25859- RyanMember
- Location : North west UK
I have one sat in my cupboard, it's was out of date in January but still looks fresh and good to eat. I'm going to see how long i can leave it before eating it. Btw, I heard new hostess has had talks and is now going to keep going?
Tue Nov 20, 2012 8:00 am
#25865- RickMember
I think Carlos Slim is going to buy it.
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