The Wall Street Journal has an excellent piece on the Hostess-Union debacle. Could be maybe the bakers’ union wasn’t the bad guy in this story, but the allegedly “reasonable” Teamsters.
Union-imposed work rules stopped drivers from helping to load their trucks. A separate worker, arriving at the store in a separate vehicle, had to be employed to shift goods from a storage area to a retailer’s shelf. Wonder Bread and Twinkies couldn’t ride on the same truck.
Hostess has spent eight of the past 11 years in bankruptcy. As the company explained to its latest judge, the Hostess brands “have not been able to profit from many of their existing delivery stops and have been unable to enter potentially profitable markets, such as dollar stores, vending services and movie theaters.
This level of costly stupidity is just the sort of unrecorded expense that kills businesses, as surely as mismanagement or intransigent dough-beaters.
Under pressure on Monday from Judge Robert Drain to back down from their strike aimed at forcing the company to liquidate, the bakers themselves pointed to “what everyone in the baking industry knew: Hostess’s production costs were neither excessive nor out of line with the market but its distribution costs were—to the tune of between $80 million and $130 million annually.