One of America’s most popular snack brands, Hostess, has declared bankruptcy on the 16th of November. Considering it is one of the most popular snack brands in the states and that it is famous for its most valued snack “Twinkies,” it is shocking to hear that the company has come to an end. There were signs indicating that the company was not doing well earlier in the year, but the company announced that they would liquidate the company and lay off around 19,000 workers (Kaplan). The cause of this was the strike by the members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.
The CEO, Greg Rayburn, said “We deeply regret the necessity of today’s decision, but we don’t have the financial resources to weather an extended nationwide strike.” Rayburn took position as the CEO of Hostess after its formal CEO, Brian Driscoll, quit unexpectedly. Rayburn plans on selling the company’s assets to its highest bidders and he acknowledged that there was no easy way of saying that Hostess Brands employees will be hurt, but there is nothing that the company can do because they are in bankruptcy (Rayburn).
The company had to make this decision because the Union went on strike for their pay. It is very possible that the company could have survived if the union did not go on strike. Although the Union may have been right that the company was being unethical for not giving them fair pay or working conditions was it worth it so that the company comes to an end? They are now left jobless and one of America’s most popular snacks will not be sold anymore. How can we determine who is right in this situation? The answer to that question is up in the air and it will vary from person to person, but I believe that a lesson was learned in this company’s failure. The Union and Hostess should have come to a compromise and should have learned to work better with each other from the start to prevent failure.
sources:
http://management.fortune.cnn.com/2012/11/16/the-end-of-hostess/?iid=SF_F_River