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 14, 2012 3:10PM
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Why do you want to save Twinkies ? It's the worst garbage you can injest.
Dec 14, 2012 3:09PM
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All because a bunch of bakery union morons could not grasp the basic concept that if you don't like your job and are not happy with the wage being offered then you have three options.  1.  Quit and go find another job that does pay what you're happy with or offers the type of work your looking for.  2. IF your not qualified to make that wage or want a better job then go back to school to earn a degree so you can have a chance at making more and obtaining that job.  3.  Start your own business and then you can decide on what you're willing to pay.   Don't however put others at risk for losing their jobs because you as part of a dimwit union decide that it's not fair that you make a hourly wage while others higher up in the company make lots more.  A lot of dimwit libs think people own them a living and have the give me this and give me that attitude.  There is a reason a person starts a business, it's to make money and clearly not everybody is going to get paid the same when you run the company.  If you don't like it, QUIT and go find something else but don't whine about it and risk everybody else their chance to work at a company because you don't make what a C.E.O does because your on a line baking a Twinkie. 
Dec 14, 2012 3:08PM
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can't all be union fault ... throw in the fact that skyrocketing fuel costs have increased the cost of production .   this is all obama and his green energy idiocy
Dec 14, 2012 3:03PM
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What kind of legal system do we have when a judge approves a $1.8 million pay out to the top execuetives at Hostess???? The workers should take pay and benefit cuts and these guys walk away with bonuses!!! Unbelieveable!! And the Republicans won't vote to take away the tax cut Bush gave to the wealthiest Americans....talk about dictators. John Boehner and his Republican cohorts in the House should be overthrown!!!
Dec 14, 2012 3:02PM
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they won't have to honor the unions contract. If Walmart gets it I would be it all gets sent out of the country to be produced.
Dec 14, 2012 3:01PM
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Oh No I Hope Not, wall mart always cheapens the products they buy. They won't be worth eating at all once wally makes it out of the cheaper **** the will use, can't trust anything the sell under their own brand.
Dec 14, 2012 2:59PM
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Wal-Mart's Great Value brand sells sponge cakes that resemble Twinkies (and at a far lesser price!)
Dec 14, 2012 2:58PM
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Hi, the Hostess workers did not vote to go on strike , the stupid union t old then they had to go on strike, knowing full well that the company would close the doors,               if Wal-Mart buys the Twinkie rights those workers would have a job, me and my wife and 1 of my sons work for Wal-Mart, we are not rich but we all have a job, and for that I am Grateful !
Dec 14, 2012 2:58PM
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Right to work laws work, unions sit at home drawing unemployment while fat cat bosses make high salaries regardless. Look at our Postal service;  if it were a regular business instead of a government operation,  it would be closed up long ago.
Dec 14, 2012 2:55PM
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I gotta admit, the idea of Hostess/Twinkies being reborn as a Walmart line is a natural fit. Even if they were JUST sold in Walmart-owned stores, considering the size of the chain and it's national presence, not to mention Walmart's "client base", it could easily work. I don't imagine Walmart would bother hassling with unions, though. Perhaps some of the same employees would or could be involved, but not on their old terms-of-employment, that's for sure.
Dec 14, 2012 2:51PM
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A pack of Twinkies and a soda on ice for lunch.  I'll miss those days.
Dec 14, 2012 2:49PM
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Lets hope not they can turn in product to trash / or have a fire sale and burn there subcontractors employees.
Dec 14, 2012 2:45PM
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This generation must not eat Twinkie type food.  I'm 73, feel  horrible and have had heart stints due to bad fats , commercialism  enticing me to eat  unhealthy fast foods  over the past 50 years.  I know people are wising up to the damage created by the american diet but please don't  make twinkies  and fluffy wonder bread.  There is a reason they were failing.  We quit buying the stuff.
Dec 14, 2012 2:45PM
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i remember having twinkies for a treat ,me and my friends would get one and play outside all day long.,we just have to eat and drink in moderation and no you shouldnt change the taste!!! 
Dec 14, 2012 2:44PM
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all the people who want a right to work state gonna realize the company can fire u for no reason .you make to much time to let u go, hire someone for less pay, by then it be to late for u to realize the monster u have awoken
Dec 14, 2012 2:41PM
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Screw Wal-Mart and the Twinkies....both $hit products....but we keep buying this crap..
Dec 14, 2012 2:41PM
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guess most people dont understand maybe all u people not liking unions will feel the pinch to when your company decides u make to much also lol ...when they decide the ceo and the board of directors deserve more pay  and u dont ...
Dec 14, 2012 2:38PM
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Keep boycotting the illuminati power structure companies like: CHASE....WELLS FARGO...McDonalds...CBS....MSN...DRUG COMPANIES....ALL BIG Domestic Media Boycott it all...Buy from MOM and POP Store's only.....Keep boycotting the NEW WORLD ORDER power ..COLLAPSE THEM ALL......Bank in small local bank.... Have no FEAR...WAKE UP....THE TRUTH IS WHO YOU ARE.....AND WAKE UP FROM THE ILLUSION....YOU ARE NOT YOUR POSSESSIONS...RISE YOUR FREQUENCY...RELEASE YOUR DIVINITY...YOUR .UNIQUENESS....PURE LOVE.! LOVE YOUR FAMILY AND GET CLOSER FOREVER TO THEM AND LOVE THEM..!
Dec 14, 2012 2:36PM
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I don't give a damn who makes them as long as they make them right.

they haven't tasted good in 25 years since the started making them politically correct.

Make them taste like 1960. wal mart ****s up every thing it touches...let little debbie make them.

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Best guess, whoever buys Hostess, they will be produced in a far more mechanized plant just south of the border because the main market is closer.

As to why the bonuses during bankruptcy, that is decided by the owners representatives which are the board of directors and stockholders which include the CEO and of course the bankruptcy judge................ the unions had gotten their pay and bonuses according to a CONTRACT which was forced on ownership ... and then wanted more ........... they got their just deserts, now a good reason to reorganize with far less labor and more machines .......... machines are always better than the usual unskilled labor, no sick days, no hangovers, no maternity /paternity leave, no bad attitudes, no unions, no vacations, no HR dept, no suits, no workman's comp, no healthcare, less bookkeeping and payroll dept .... and on and on.

The real tearjerker is that unskilled humans haven't faced the fact that they are infinitely replaceable, and that stupidity is WHY they are replaceable!
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