And when unions drive that cost up, the company goes belly up.
Hostess, the producers of Twinkies went bust, twice, as a result of heinously bad union arrangements.
The most recent investors who bought it out of bankruptcy did not in fact buy “the company.” They bought just some of the assets. By buying the Hostess assets out of bankruptcy, Apollo and Metropoulos took them on free of employee benefits and other labor obligations that had weighed down the company.
They went from local bakeries and delivery routes to a much more concentrated production system and delivery into warehouses.
Employing people is a cost. And when that cost rises, fewer people are going to be employed.
In 2012, the end appeared nigh for the humble Twinkie, the yellow sponge cake and American icon: A trend toward healthy eating and a bitter union brawl had forced its baker into bankruptcy.
Now, Hostess Brands is back with a vengeance, with new plans to become a publicly listed company and return to a market that had once left it for dead. The deal, announced Tuesday, would give the maker of Twinkies, CupCakes and Ding Dongs a market value of roughly $2.3 billion
Unions are idiots. Even a parasite knows not to kill its host. Read more »