It’s Chapter 11 and shutdown for Twinkie-maker Hostess
The Twinkie could become extinct after the shutdown of Hostess.
Poor organizational culture can lead to liquidation, as shown by 82-year-old Hostess. Heavy debt and changing consumer tastes to healthier food are contributors too, but the battle with its workers and their union eventually caused Hostess to go for Chapter 11 and shut down its factories.
Hostess was not able to keep up with the costs and obligations they had to fulfill regarding their employees, similar to how General Motors had trouble because of legacy costs. Lack of production due to the strike caused inability to keep up with the supply chain, and thus a loss in sales to the retail stores. If the employees are not happy, the whole company could be paralyzed.
However, the employees did reject a contract offer. Lower wages is better than no job at all, which could be the case for 18,500 people. What bothers me is that the bakery workers are only 30% of Hostess’s workforce, but everyone else could result in being jobless too. This is like my post about the NHL lockout. It’s the players that want better a better salary, but it’s hurting all the other employees of the NHL that have no say. I think that’s a social issue that some social entrepreneur out there should help solve.
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