The Expiration of Hostess: Who's at Fault?

It is very likely that many of you have already run to your nearest supermarkets and bought the remaining few boxes of Twinkies. After all, the iconic company, with whom our childhoods are associated with, has come to an unfortunate demise. Hostess filed for liquidation today, after a hard-fought battle with the baker’s union over contract negotiations, ending all business operations immediately.



It is only natural after today’s events to determine who the real culprit at fault is. Some blame it on poor financial decisions made by management to raise their own salaries multiple times despite declining customer demand. This explanation is justified given a lack of improvement to Hostess’ financial statements after three previous sales and two prior bankruptcies. But that answer seems almost too simple and straightforward for such complicated failed negotiations.

Hostess had warned its bakers that a strike would force the company into filing for liquidation. The union nonetheless decided to go on strike, given their satisfaction with contractual terms. This decision was either made because the union did not want to set a precedent for other companies or believed Hostess was entirely bluffing. Regardless, Hostess has now eliminated the 5,000 union jobs as a result of the financial distress, in addition to 13,000 other jobs for employees who are not part of the baker’s union. Typically, unions are heralded as valuable components of society since they attempt to serve the greater good for people with little opportunity for expression. In this case, however, can the same be said about the baker’s union? How does one balance the discontent of 5,000 employees unwilling to concede against the cost of additional jobs of people who have no relation to the dispute? Hostess may no longer be an operating company, but what will become of the 18,000 individuals who will now join the unemployment line?

- Yannan Qiu