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 6:07PM
Dec 14, 2012 6:04PM
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YEs....we did play and play until it was dark. We played outside and we ran we jumped, we climbed trees. We played sports till we almost broke our heads on the concrete streets. We exercised. The NFL is touting that kids play 60 minutes a day outside getting exercise. We played outside ran etc for many hours in a day.

It is true that kids now can be enteretained inside with computers etc etc. They do not have to get off the couch or out of their chair to be amused.

That really is the difference. So if kids are collectively too fat, that can be the fact that they sit too much. Oh for the 1950's again.

Dec 14, 2012 6:01PM
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Unions are horrible! Unions bully workers that are not part if the union, they bully the company and they lie about what they promise to do for the workers. Unions were good in the early 1900's. we don't need them anymore. This is just the tip if the iceberg of the destruction unions cause in our society today. 
Dec 14, 2012 5:59PM
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Most of you people Know nothing of the facts surrounding the unions , Hostess or even the fact that unions have raised the bar for American workers. They are a democracy not a Dictatorship. Each member gets a vote. American Companies do not want worker rights! They want to control workers and put  them under their collective big thumb!!! So go ahead and condemn unions. In this instance corporate greed triumphed over the working class. Just watch and see how much Hostess makes just for the brands. Then ask yourself where is that money going?
Dec 14, 2012 5:56PM
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WOW, I HOPE KROEG OR SOMEONE TAKES IT OVER.. NOT WALMART. IT WILL NEVER HAVE A UNION MAKE THEM. THEY ARE SO ANTI UNION .. SO, I HOPE THAT SOMEONE WHO REALLY WANTS A GREAT BUNCH OF WORKERS BEING UNION KEEPIING OUR TWINKEES AND SNOBALLS ETC ON THE SHELVES.. I WILL LOSE A LOT OF WEIGHT IF I DO NOT HAVE MY TWINKEYS AND MY SNOBALLS...............
Dec 14, 2012 5:43PM
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Ok blame Unions for stupid, crash and burn decisions by management. I get tired of hearing these people say unions are the reason for a companies demise. I work for a company that's got itself into so much debt that our union members have reduced our pay and benefits so low non-union shops make more then we do. We've gave up so much, and there are 15,000 people working for this company, that it still isn't enough. Imagine giving back 600.00 dollars a month,5mintues off your break, no retirement,gave that back, how much more can we give up to help. So you who say unions hurt companies can stick it where the sun don't shine. We don't make capital decisions, and contracts are negotiated, not given by stupid company people,they know what and how much they can give in a contract. You spewers that hate labor have some serious problems with greed. Unions protect workers to a degree but Management makes the ultimate decisions on which direction financially they will head. Hell our ceo took 3 million golden parachute and left us holding the bag. It sicking to watch all this transpire and we can't do anything to change this spiral that management has sent us into. It had nothing to do with our contract. The news we got when we went to negotiate a contract, just floored us. Our company leverage itself to the hilt, made a deal with the devil to expand beyond it capital means. Now we struggle, and probably will go out of business not because we,the union, didn't care. You've heard the saying you can't save a person from themselves, that  applies to managing a corporation. I feel bad for the families at Hostess. I know what they were dealing with. I'm afraid one day unions will disappear and we'll be left with working at Wal-mart needing government assistance just to feed our families. Mark my words it's coming. If  for one minute you think you are making too much money at your job then by all means give it back, I don't think so. Corporate greed is killing this great country and company buffoons, like the one's that puke out hate against unions, and  blame labor on this blog, will have you believing your not worthy of the wages you make. We think just because a person is successful they must be somehow more deserving then them. We are becoming a nation of subservients. Good-luck America I hope someday you wake up before the you realize the great American dream is long gone into some CEO's bank account. I'll shut up because I feel I'm rambling, sorry for being so winded, but thanks for reading this wether you agree or diagree. Pray for Connitecut and the families. 

s

Dec 14, 2012 5:42PM
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great value imitation twinkies already taste better than the real thing,i dont get why they would do this
Dec 14, 2012 5:36PM
Dec 14, 2012 5:36PM
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It does not make any difference if the CEO or owner pays himself $1.00 or $1000000.00 a week.  It is their company, their risk and their money that started it all.  For the workers, they can ask for more or they can go elsewhere.  They agree to work for a certain amount, who cares what anyone else makes?

Now out of the greed of the union -nobody has a job

I've worked for a company that had no idea of what they were doing.  All the employees knew that it was "next stop bankruptcy" - but we didn't demand more pay to help them disappear more quickly.

Dec 14, 2012 5:32PM
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It seems like the unions are using an age old method of arguing a point ..... "When you don't know what you're talking about then dazzel them with bull???!  When will we hear that the unions, company management, banking community and customer groups look at keeping the company finances in balance.  As a country we, as consumers and stockholders, need to insist that the finances be more transparent when so many are involved.  Transparency on the part of the union and the companies.  Well that won't happen and so we will continue to hear about the whining and the drama.  In the end the only thing this tactic sells in newspapers. 
Dec 14, 2012 5:31PM
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wish people and Corps would feel the same way about other factory closings like say, GE, Nike, Nestle, Babe Ruth,Levis,Frigidare and a gazillian othe "American Brands" that are no longer made in America but still sold as "American Brands" (and are also now  totally overpriced crap)  and as far as W/M buying Twinkies, lookout seniors and and marginaly part time employables, here comes another possibly wonderfull addition to your sub standard way of life, you know W/M will help make it better  with great wages, holiday pay,benifits and a unform that just burns the competition.
Dec 14, 2012 5:28PM
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I was wondering about the monies that the employees paid into the union funds....after reading further I see that the executives will collect $1,800,000 in bonuses....what a great benefit...."robbing poor little Peter to pay Mr. Head-Shed Paul."   So who really screwed up a great treat and American tradition?   When will people wise up?  What does it take to get people to remove the blinders to reality and not to just this fiasco, but the future of the USA.   I want my twinkie & my afternoon spot of "Bigelow Vanilla Caramel" hot tea!

Dec 14, 2012 5:27PM
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I'd rather they spend a few bucks on carts that actually roll without a flat spot on the wheel, a wobble, or major squeaks. Maybe they could spend a few bucks to find people that know how to place orders correctly and can maybe clean a little bit too. I can live without Twinkies.
Dec 14, 2012 5:27PM
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The union already had 8% paycut and freeze in pensions and Hostess STILL asked for another 8% cut.  At the same time the CEO got a raise so the employees said no. 

 

If your boss asked you to take a pay cut because the company was doing poor and to help save it...would you take it knowing that your boss got a raise and you took the cut....would you do it?

 

Management put Hostess out of business...not the unions.  Unions are a convenient scapegoat though.  Plus even IF the union took the other 8% cut...do you think that Hostess still wouldn't of been bankrupt?

 

 

Dec 14, 2012 5:27PM
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"Sadly" the retention bonus's were paid.  This is a reporter???  This isn't suppose to be the place where the author gets to pitch their personal opinion as if it is blessed by all of the reporting community.  Plus, read the whole article.  Changes in America involving the economy, the way people eat, rising costs and many other things, as well as the constant nagging from the union to raise wages.  Companies need to run their finance departments the same way we run our homes.  You bring in less money on the front end cost of goods and expenses need to be reduced in the same percentage or the price of the product needs to be increased.  Make the price too high and the front end dives even more.  
Dec 14, 2012 5:26PM
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Dont the 18500 employees have the right to try buying the business and make it employee owned? 
That's their best play.  Isn't that what their union should be trying to do, instead of pointing fingers.  The employees can run it any way they want, and it will become a great success story of sticking it to the man.
Dec 14, 2012 5:20PM
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Unions would not allow hostess and wonder bread to be delivered on the same truck. An unnecessary duplication of overhead. It is only amazing that they lasted as long as they did.

 

Dec 14, 2012 5:19PM
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Enough about Twinkies - what about the cupcakes?  I ALWAYS peeled the frosting off and saved it for last.
Dec 14, 2012 5:13PM
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Well, My Little Timmy Just Loves Twinkies,  In Fact that's All He Eats While Playing Video Games.   Yes He's A Little Fat But So is His Idol Honey Boo Boo.   So It's Ok If He want's To be Like that.  He will Grow Up A Fine Boy.! 
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