Hostess joins Enron and Bain in the list of companies who will be remembered for preying on and stealing from American workers.
According to the Twinkie Countdown Clock we have two days left until Twinkies take their rightful place back on grocery store shelves everywhere.
Whether or not you plan to celebrate the return of the Twinkie, let's take a look back at why they went away in the first place.
The Twinkie story has been touted as this decades Enron. It has all the familiar earmarks of the Enron debacle from cooked books to stolen pensions to company leaders who have no idea where all the money went. The Hostess bankruptcy also has all the style of Bain-style predatory capitalism: An "investor" that loads a solid company up with debt only to sell it out from under whoever is left standing.
It used to be that CEOs shared the pain. [...]But in today’s post-Reagan, Bain-model American capitalism, there’s never any risk for the CEO class. Instead, all the risk is borne by the workers.
Twinkies are an American Icon. Thoughts on who to blame for Twinkie's demise were sharply divided along political lines. Conservatives were quick to blame worker unions. All unions in general and in particular, the Bakery, Confectionery, Tobacco and Grain Millers International Union, that dared to go on strike against Hostess. How could the workers be so greedy as to strike over something as silly as wages? Why does it matter what you get paid as long as you have a job?
One 14-year veteran of the company describes the $150 million annual givebacks the union agreed to: “In 2005, before concessions I made $48,000, last year I made $34,000.” Pensions and healthcare were cut as well, with labor’s total loss equaling $110 million annually.
Faced with no pension and yet another pay cut, the workers went on strike. Rather than make good on their promises, The CEOs of Twinkies sacked and looted the company and closed the historic doors of Hostess and selling off the company bit by bit, brand by brand to the highest bidder. But not before first going to court to make sure they wouldn't have to pay their workers back the pension money.
Ironically, if you borrow money to pay for your education, you can’t get rid of that debt through bankruptcy – one of the “reforms” of the bankruptcy law during the Bush era. But if you’re a CEO or a buyout bankster and you borrow money from your employees’ trust fund to be able to cover your own paycheck and million-dollar bonuses, and then take your company into bankruptcy, neither you nor the company have to pay those employees back even a single penny. Part of their pension is picked up by federally-run pension insurance, and the rest is just lost.
So welcome back, Twinkies. We'll never taste your golden sweetness again without remembering the good old fashioned union busting that marked your short absence and return.