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Hostess Bankruptcy: What Role Did Policy Play?

ahayes Wrote: Nov 19, 2012 11:32 AM
The company was mismanaged since the early 2000s. The unions kept giving them concessions and rather than using them to keep the company profitable each of the CEOs instead turned around and gave themselves raises and hamstrung the company.
SpaceVegetable Wrote: Nov 19, 2012 7:14 PM
Typical union logic. Take all the credit when things go well, but blame "management" when things go wrong. If a company succeeds "on the backs of the workers" then it also fails "on the backs of the workers" too. You can't have it both ways, dude.
Jerome49 Wrote: Nov 19, 2012 12:44 PM
Sure. Labor costs (wages, benefits and pensions) had nothing to do with Hostess closing its doors. It was all the result of "company mismanagement". Just ask any union person. GM, Chryslr and Ford, all run by dunderheads for the last 70 years. United and American Airlines, the steel industry, the garment industry and the manufacturing industries in America, all, all run by dunderheads. Of course union demands had nothing to do with their foundering and inability to compete.

The demise of Hostess and Twinkies is not a national emergency, but it is certainly sad when a major business goes under and thousands of people lose their jobs.

If federal and state policymakers want to play a useful role here, they should study why Hostess couldn’t make a go of it. Were there tax or regulatory factors that stood in the way of the company earning a decent rate of return?

Unions were an important factor that pushed up the firm’s costs and reduced its operational efficiency. The policy reform here is obvious for people who appreciate market economics: repeal America’s coercive union laws. If policymakers don’t...