Wal-Mart wants to save the Twinkie

The retailing giant is one of several bidders reportedly interested in purchasing parts of Hostess Brands.

By Jonathan Berr Dec 14, 2012 11:17AM
Wal-Mart store in Secaucus, New Jersey / Jin Lee/Bloomberg via Getty ImagesWould a Twinkie taste just as good if Wal-Mart (WMT) made it?

According to Bloomberg News, the largest retailer is making a run for the assets of Hostess Brands, the bankrupt maker of Twinkies, Sno-Balls and Wonder Bread. Other bidders include grocery chain Kroger Co. (KR) and Grupo Bimbo, the Mexican conglomerate whose brands include Entenmanns's baked goods and Thomas' English muffins. Some of the bids are for all the company's assets and others are for lines of business and individual products, the news service said.

The interest is a sign that Hostess, which has begun to liquidate its assets after unionized workers balked at agreeing to additional concessions, will live to fight another day in some form or another.

The 18,000 Hostess employees who lost their job shouldn't rejoice quite yet. Any new owner of Hostess or its businesses will not be bound by any agreements that prior management made with the unions. A new buyer may demand wage concessions as steep, if not steeper, than the ones demanded by the current owners. Sadly, the $1.8 million that the bankruptcy court approved as retention bonuses for top executives will be paid no matter what.

Members of the Bakery, Confectionery, Tobacco Workers and Grain Millers Union say they are not to blame for the company's demise. Its website argues that its members dedicated their working lives to their work and had to "watch helplessly as the company was run into the ground, over and over again." Ironically, I attended a conference on corporate restructuring a few years ago where Hostess was touted as a success story. 

Even if Hostess had the best labor relations in the world, the company would face a tough road ahead. For one thing, the costs for ingredients have skyrocketed  this year as U.S. crops withered following the worst drought in more than five decades. America's dietary habits have also changed in the wake of soaring rates of obesity.

Take Twinkies. When I grew up in the 1970s and 80s, parents would think nothing of putting the creme-filled spongecake in a kid's school lunch. Today's parents would think twice before letting their children eat something so unhealthy.

Hostess products such as Twinkies are like newspapers. People like them in theory, but can't remember the last time they bought one. That needs to change if Hostess hopes to survive.

--Jonathan Berr does not own shares of the listed stocks.  Follow him on Twitter @jdberr

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414Comments
Dec 15, 2012 3:22PM
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Remember the question, "can you come to play"?. Try bringing it back. You'll see some healthy kids. And they'll still enjoy eating hostess products...
Dec 15, 2012 3:15PM
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Oh great chinamart wanting to push more junk on america, made for each other. Why do people shop there, its full of foreign crap no one needs! twinkies, are you serious!!!!
Dec 15, 2012 2:40PM
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American story worthy of a cinema classic.AMERICAN company gets a break. American company grows larger than life makes trillion dollars.Hires thousands of workers only to shut  the doors after the big CEO'S get their million dollars bonus. The little guy gets unemployment. Only in America!!!!!

Dec 15, 2012 2:14PM
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"The simple truth of what happened to Hostess Brands is best described by L.A. Timesreporter Michael Hiltzik , “It failed because the people that ran it had no idea what they were doing. Every other excuse is just an attempt by the guilty to blame someone else.”"

 

Unions did not cause the demise of Hostess.  Mismanagement did. Period.

Dec 15, 2012 2:10PM
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What, another Wal-Mart nightmare, So much for wages and benefits!  If corporate America does not want to pay a livable wage so they can maintain there profits, Bonuses etc, Shut them down and than they can manufacturer in China or some other country that does not have to respect OSHA, EPA, and other regulations.( There is no way America can compete with these country's) One day people will take to the streets. We don't need more right to work states (right to poverty) The American worker (Middle Class America) needs some sort of representation to achieve a livable wage. The American work force is not one big happy family working as a team which management likes to promote. 


 

Dec 15, 2012 2:03PM
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Well the good part is if Wal-Mart does get it, the labor problems and wages will no longer be an issue. NO UNIONS to mess with and if the employees think of bringing in a union they lose their jobs. Hire only temps and the production costs come down. Loads of profit!

Now may be a good time to add to your portfolio and but some Wal-Mart stock. If this deal goes thru for sure the stock will go up!

Dec 15, 2012 1:56PM
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Leave it to Wal-Mart to try and save a product with absolutely no health value what so ever! Diabetes in a plastic wrapper
Dec 15, 2012 1:55PM
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Search and search and search  -  I would like to see a good

union story!                            

Dec 15, 2012 1:50PM
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i look at it this way Hostess has gone the way of the  Dodo
Dec 15, 2012 1:32PM
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I like twinkles, I don't have to like them enough or any-other junk food as a main staple in my diet. I plant a garden with greens and other vegetables and get  a snack if I choose at the market. Don't blame someone else, blame your own hands for the items we choose to eat.
Dec 15, 2012 1:28PM
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I am sure that Walmart would not continue the union in Hostess.  This would mean that the workers would have a more secure job, the products would be produced at a more efficient and less cost method, and the country would have its twinkies and Ho-hos again!  I am sure that most of the current workers would jump at the chance to have their jobs back, even at a 10-20% cut in pay.  Maybe after a few years the union could even try to regroup, but, the workers might be smart enough to keep them kicked to the curb

Dec 15, 2012 12:51PM
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I like Twinkies once in awhile but, if Walmart buys the brand, I will never eat another one! I refuse to step foot in a Walmart! Our community, Crofton, Md., was one of the few communities to ever get Walmart to change their mind about a store they wanted to build. They hold their suppliers hostage. They have forced some suppliers to make cheaper, inferior products abroad and made others sign exclusive deals with them. They treat their employees as slave labor. Then there is the customers. Ever see the People of Walmart photos? Need I say more? I would rather spend a few cents more at Target then give my money to Walmart.

Dec 15, 2012 12:47PM
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Yes and they may even come up with sugar free version of all their delicious confections which I would think might help their bottom line, plus it may even hint of a southern flavor, just sayin.
Dec 15, 2012 12:47PM
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I haven't had a twinkie or cupcake made by hostess since maybe 10 years of age.  They were not an item of interest in my family.  We never at any time purchased these products as our six children grew up.   I find it amusing that people are so concerned about losing a product that has no nutritional value and is a poor substitute for better sweets on the market.  So, what if Walmart buys the rights to make and sell Twinkies etc.  They will most likely be made in China or Mexico and just be another product that does not provide American jobs in manufacturing.   It is very difficult or impossible to find a US made product in Walmart.  They claim they provide jobs for American?  So, a minimum wage clerk or stock boy has a chance at a decent life because of Walmart?  Avoid Twinkies, Hostess cupcakes, Wonder Bread (yuck).  No wonder we have so many fat little freaky Freddies and Suzys waddling around our elementary schools.
Dec 15, 2012 12:45PM
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Let us ponder, which is best a five percent cut or a 100% cut in wages?  This is a very difficult calculation, and, if asked, I will give my final answer.
Dec 15, 2012 12:44PM
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I agree with some of you about how kid's are so lazy these day's. I truly agree!! As far as a company best suited for saving a giant icon like HOSTESS, I rather see someone other than Wal-Mart taking over HOSTESS. Only because, if you're getting ready to pick up a giant like this one, you need to start by "taking care of the workers first"!! We all know that from all those that have a bid on HOSTESS, Wal-Mart is NOT best suited. I speak for everyone when I say, "take care of you're employees first"!! There is an old saying that goes "they can make you or they can brake you"!! Wal-Mart DOES NOT TAKE CARE OF THEIR EMPLOYEES!! The only reason Wal-Mart put a bid on HOSTESS, for the same reason Wal-Mart loves NON-UNION conversations. Just Saying....!!!!

Dec 15, 2012 12:37PM
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watching fish being feed in a fish tank at feeding time is like watching people shopping at wal-mart, look at the crap that people have in there carts ,....fish food

Dec 15, 2012 12:21PM
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Funny, they will save something that will make you fat and kill you but they won't take care of their employees...what does this tell you about the company?? They might as well move to China...Anyone who shops at this place is a fool and un-american....
Dec 15, 2012 12:20PM
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I've never seen such  to-do over something so rediculous!!!  IF YOU LIKE 'EM, EAT 'EM.... good grief!!!!!.
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