Christopher Hunter's Blog

With Hostess planning to stop operations, what happens to its mix of famous brands — most notably the twinkie — is still unsure. The Irving, Texas based company says that it will seek bankruptcy-court permission to shut down and sell all of their assets, including 36 plants and brands like Wonder Bread, Nature’s Pride, and Ding Dongs.

All of this was sparked by a nation-wide strike by its second largest union. This strike “crippled the company’s ability to produce and deliver products”, Hostess said. The company warned that they’d be forced to shut down if a settlement wasn’t reached by late Thursday. Besides poor labour relations, Hostess has also been struggling to keep up with the consumer’s shift to healthier eating habits and high raw material costs.

This situation is a testament on the importance of keeping up a good relationship with employees. Besides decreasing employee turnover rates, a good relationship with labourers can allow companies to avoid potentially detrimental situations. In this situation, the Bakery, Tobacco Workers and Grain Millers International Union went on strike because they weren’t satisfied with what they were getting from Hostess. The resulting events prompted the loss of an incredibly influential brand and caused more than 18,500 employees to be thrown out of work.

Sources:

http://www.theglobeandmail.com/globe-investor/as-hostess-winds-up-who-will-bite-on-twinkies/article5365001/

http://hostessbrands.info/ceo-letter