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The Free Market Killed Hostess, And That’s A Good Thing
OutsideTheBeltway.com ^ | 11/16/12 | DOUG MATACONIS

Posted on 11/19/2012 11:01:40 AM PST by GSWarrior

This morning’s news that Hostess Brands, Inc. was shutting its doors after 82 years of operation (originally under the name International Bakeries Corporation) has elicited a lot of commentary from various sources. Culturally, I’m seeing a lot of people lament the fact that some of their favorite brands of snack food or bread — from Twinkies to Ho-Hos to Wonder Bread to Beefsteak Rye Bread — will no longer be available. Politically, there’s been a definite theme on the right blaming the Baker’s Union for the company’s collapse since they would not agree to a modification of their contract notwithstanding the fact that they had been warned that this would happen, and that even the Teamsters Union warned them that they were risking the fate of the company and everyone’s jobs by being so stubborn. Both of these reactions strike me as being wildly over blown, based largely on common misunderstandings of what actually happens in Bankruptcy Court and the business world, and both miss the point that the death of Hostess Brands is a fairly good example of the free market in action.

(Excerpt) Read more at outsidethebeltway.com ...


TOPICS: Business/Economy; Miscellaneous; Society
KEYWORDS: bankruptcy; freemarket; hostess; unions
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To: muawiyah

It’s a sad day for California. All those glaucoma patients with the munchies and no more twinkles...lol


21 posted on 11/19/2012 11:51:54 AM PST by jsanders2001
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To: Jmouse007

http://www.zerohedge.com/news/2012-11-16/hostess-liquidation-curious-cast-characters-twinkie-tumbles This guy names names ~ you don’t ~ bunch of lefty wankers took down this company. They owned it! Just like GM. Which will be going down soon. Some new owners are not reliable.


22 posted on 11/19/2012 11:55:54 AM PST by muawiyah
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To: Mr. K

Same as GM ~ try this article: http://www.zerohedge.com/news/2012-11-16/hostess-liquidation-curious-cast-characters-twinkie-tumbles


23 posted on 11/19/2012 11:57:17 AM PST by muawiyah
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To: jsanders2001
There'll soon be Bimbos in their lives ~ (new owner of the machinery ~ a Mexican company)- The Hostess business model was woefully out of date. The latest rage ~ actually this has been going on 15 to 20 years ~ is the instore bakery machine! Pour in the glop from plastic bags; set the control to the right product number; push the on button.

After the prescribed time the machine tells you it's done and you pull the product and wrap it in bags or place in boxes.

It's much more efficient to truck around glop to machines in the stores than it is to truck around finished product to the stores.

The alternative is to produce products with incredibly long shelf lives ~ they're a little chewier, but they can be sold in gas stations everywhere!

24 posted on 11/19/2012 12:02:25 PM PST by muawiyah
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To: GSWarrior

I’ve been buying their Stoneground Whole Wheat for years, at the “day old” store next town over. The moisture content is a little better than some other brands, so it freezes well, and is fine for five-six days after thawing.

Cost is about one third of fresh, and I really can’t tell the difference once it becomes a sandwich, toast, French toast, etc.


25 posted on 11/19/2012 12:02:41 PM PST by JimRed (Excise the cancer before it kills us; feed &water the Tree of Liberty! TERM LIMITS, NOW & FOREVER!)
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To: dila813
There can be a rational argument that the free market killed this company (we will never be able to prove or disprove this)

We have no free market. This would tend to disprove it, don't you think?

When we have places where bakeries are banned from producing an aroma, when sugar prices are artificially high (2x) by government barriers, when corporations are taxed the highest on Earth, when some companies are given government handouts (Solyndra, etc) and protectionist laws (domestic sugar for instance), when union goons make sure in some states that bread and snacks get different trucks (as an earlier poster noted) and likely make it hard to near impossible to fire bad workers (normal for unions).....

can anyone really pretend we have anything close to a free market??

26 posted on 11/19/2012 12:05:21 PM PST by GeronL (http://asspos.blogspot.com)
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To: wideawake

The analysis was not only off-base, but irrelevant.
He seems to want go all the way toward building a case
that the “free market” should be allowed to work through its ineluctable process of separating the wheat from the chaff, and he makes some high-falutin’ references to creative destruction and Joseph Schumpeter, but he misses the entirely obvious point that its that intransigent union that effectively TOOK THE PLACE OF THE MARKET in the case of Hostess.The union practiced its own not-very-creative destruction in this case, and I wish I could figure out how it’s serving a Higher Agenda here, like one, for example, that’s satisfying the higher authority of the Obama Administration.This is a writer with no sense of irony, which is something we were all supposed to learn about in High School.


27 posted on 11/19/2012 12:10:15 PM PST by supremedoctrine
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To: muawiyah

The Mexican BIMBO Corp are already pimping out Sara Lee and now they might get Hostess.... someday they might even nab Little Debbie....


28 posted on 11/19/2012 12:10:35 PM PST by GeronL (http://asspos.blogspot.com)
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To: GeronL

The point here, is all the others in this market deal with the same thing.

If they were killed by Mexico Bakeries, your arguments would be valid.

If I bought this company, I would move the production. I think I would like to move it to some place like Utah.


29 posted on 11/19/2012 12:45:27 PM PST by dila813
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To: RavenATB
...just reading the comments on that article is like a “who’s who in Moron-Land”...

That's the part that stood out the most to me.

18,500 employees, 33 plants, 12 unions, 40 pension plans, half of 'em multi employer orphan plans, more than 380 individual union contracts, 11 of those unions refuse to strike or honor the Baker's walkout or picket lines, a previous chapter 11 buyout/bailout to save jobs, and the NLRB.

The "free market" had nothing to do with it (free market wasn't in operation here), Hostess was murdered by a few Bakers union boss thugs, and an unknown number of Bakers union rank an file members.

30 posted on 11/19/2012 12:46:01 PM PST by Navy Patriot (Join the Democrats, it's not Fascism when WE do it, and the Constitution and law mean what WE say.)
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To: dila813

Not every companies gets bailouts, not every company gets grants from the government, not every companies gets sweetheart deals from states and cities.

They are not treated the same.


31 posted on 11/19/2012 12:56:08 PM PST by GeronL (http://asspos.blogspot.com)
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To: GSWarrior

Blaming the Baker’s Union for the company’s collapse is a fact nothing else caused it.
Greed will always do you in,helllllloooo Detriot.


32 posted on 11/19/2012 1:00:37 PM PST by Vaduz
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To: GeronL

True, I wouldn’t ever expect a bailout though.


33 posted on 11/19/2012 1:02:41 PM PST by dila813
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To: Navy Patriot
And I wonder what those now-former Hostess bakers will be doing for a living a year or two from now. I can just imagine what those resumes will look like when the career Hostess line workers try to parlay all that “experience and expertise” from 20 or 30 years pushing “Ho Hos” into cardboard boxes. They'll probably be outraged to find out that their qualifications after three decades at Hostess put them last in line for a door-greeter job at WalMart.
34 posted on 11/19/2012 1:05:11 PM PST by RavenATB
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To: Vaduz

Hostess was loaded up with debt by private equity.
In this case, it was DEMOCRAT run private equity, including Dicky Gephardt.

The archaic union rules certainly contributed also.

But notice how there’s NO MENTION in the media of the looting and pillaging done by Ripplewood. Imagine if it had been Bain Capital....


35 posted on 11/19/2012 1:08:04 PM PST by nascarnation (Baraq's economic policy: trickle up poverty)
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To: dila813

I am not an expect on the distribution of bakery products. However, I think these bakery’s were scattered all around the country so that they could ship competitively to all markets. I do not think you could have a bakery in just Texas, Utah, AL and be competitive to WA, ME and IL. Unless that is you are willing to give up 50% of the US market.


36 posted on 11/19/2012 1:13:02 PM PST by woodbutcher1963
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To: Navy Patriot

The owners are doctrinaire extreme Leftwingtards ~ they did it ~ mostly with other people’s money.


37 posted on 11/19/2012 1:14:54 PM PST by muawiyah
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To: GSWarrior
Culturally, I’m seeing a lot of people lament the fact that some of their favorite brands of snack food or bread — from Twinkies to Ho-Hos to Wonder Bread to Beefsteak Rye Bread — will no longer be available.

Grupo Beembo to the rescue!

¡Sí, señor!

38 posted on 11/19/2012 1:15:42 PM PST by cynwoody
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To: GSWarrior

We do not need another view from the left.

If even the teamsters were trying to educate them, you know that they are way off the left cliff.


39 posted on 11/19/2012 1:17:33 PM PST by editor-surveyor (Freepers: Not as smart as I'd hoped they'd be)
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To: nascarnation

The Lewinski’s (MSM] never MENTION anything bad about the stupid democrats.


40 posted on 11/19/2012 1:21:16 PM PST by Vaduz
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