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The [Thursday] Papers

"Hostess Brands said Wednesday it will close its Schiller Park bakery, where Twinkies and other iconic sweets have been produced for 84 years, affecting about 400 employees," the Tribune reports.

"Union officials said they were notified of the closure on the same day they were set to start negotiating a new labor contract. About 280 of the workers had voted to unionize in May."

When I first saw this article, I thought about the times I toured that Twinkie plant, for this Tribune story. And the time I wrote about the Twinkie for the Baltimore Sun. And, earlier in my career, the time I toured the Twinkie-less Hostess plant in Waterloo, Iowa. That story is not online.

And here's something I learned: The jobs that produce iconic products generally aren't iconic in and of themselves. They are jobs - usually as dirty and frustrating and dull as everyone else's jobs. They are jobs that produce some element of magic, thanks in large part to marketing, but jobs nonetheless.

I should've been thinking about the workers, then. I really wasn't until I read today's article.

"Donald Woods, president of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union Local 1, said he learned about the plant closure when he met with company officials to negotiate a labor agreement.

"We were shocked," Woods said. Union members average about $15 an hour. "It's devastating for them," he said.

"Workers in Indianapolis and Georgia also voted to join the union earlier this year, Woods said. The same union unit that represents workers in Schiller Park also covers workers in Indianapolis and their contracts were both being negotiated at the same time."

Of course, Hostess and its Twinkie aren't what they used to be.

"Hostess re-opened the Illinois facility in July of last year following the snack brands' $410 million purchase by private equity firms Apollo Global Management and C. Dean Metropoulos & Co."

Oh, you mean the dude whose net worth is $1.3 billion?

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"The famous line of treats was bought out of bankruptcy following the old Hostess' bitter dispute with its main employee union. The old Hostess had 11 plants with a unionized workforce. People hired back by the new Hostess Brands hired back without a union backing."

I can tell you this: I wouldn't want to work in one of those plants without a union. And you wouldn't either.

"Local union President Woods that some workers might be able to get jobs at the Indiana facility, which he says the company is not planning to close, but it's unclear how many positions are available. The union represents about 175 people there.

"Workers on break outside the Schiller Park factory Wednesday afternoon said the company summoned them to meetings Tuesday evening and Wednesday morning to inform them of the closing.

"Those approached by a reporter said they were instructed by the company not to speak to the press and said they were afraid they could lose their jobs before the closure date if they were quoted by name."

Like I said, I wouldn't want to work there without union protection.

"They said they have been working 12-hour days in two shifts."

Like I said, I wouldn't want to work there without union protection.

And now they won't.

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"Twinkies and other Hostess treats were off store shelves for eight months before the company was revived. During that hiatus, competitors introduced knock-offs that appear to be hurting Twinkie sales.

"Many competitors took over the shelves and are tenaciously defending their business and thus we must be highly efficient and technologically advanced to compete," Hostess Brands CEO Bill Toler said in a statement to the Tribune. "As a result, we have invested in more efficient production capabilities and need to streamline our manufacturing infrastructure and protect our ability to compete."

"Twinkies competitors include Golden Sponge Cake, sold at Jewel-Osco; Little Debbie Cloud Cakes, Wal-Mart's Golden Creme Cakes and Nice! sponge cakes at Walgreens. Compared with the Twinkie's per-cake price of about 68 cents, they're 5 to 50 percent cheaper."

Huh. I find it hard to believe that Twinkie sales are soft because of these discount knockoffs. After all, the Twinkie is the Twinkie. The branding advantage is tremendous. That's a total marketing failure.

Toler's statement was not available to respond to follow-up questions about that.

I bet what consumers have figured out, though, is that the Twinkie these days is pretty crappy. They've been cheaped out.

A winning solution, in my book, would have been to bring the Twinkie back bigger and better than ever. Instead, the private equity strategy was to essentially liquidate their once-golden snack cakes through Big Lots. Makes no nevermind to them; private equity gets their money back first and then runs.

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Fantasy Fix Draft Guide Pt. 3: WRs & TEs
Brandon Marshall vs. Alshon Jeffery vs. Martellus Bennett.

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BeachBook
* Obama's Top Ex-Advisors Cashing In On Fighting Unions.

* Candyland Sues 3 For Use Of 'Chicago Mix' Popcorn Brand.

Including Garrett's.

* How To Start Supporting Entrepreneurship In Overlooked Neighborhoods.

Perhaps a bakery making golden snack cakes?

* U of Illinois Can Expect Presidential Pay To Rise.

* U.S. Military Bans The Intercept.

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TweetWood

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The Beachwood Tip Line: Hook, line and sinker.



Permalink

Posted on August 21, 2014


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