- - Wednesday, November 21, 2012

Is there a more iconic American snack than the Twinkie?

The long-ubiquitous “golden sponge cake with cream filling” has been around since 1930, when baker James Dewar invented the ready-made dessert in sleepy River Forest, Ill. Early versions were filled with banana cream, but fruit rationing during World War II forced a switch to the now familiar vanilla.

This enduring American icon is now in jeopardy: Hostess Brands Inc., maker of Twinkies and other baked goods such as Wonder Bread, is close to shutting down. The company announced on its website the immediate “closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States.”

What happened? Hostess has faced a variety of challenges in recent years, including an increasingly health-conscious consumer market. But the coup de grace was its prohibitively expensive workforce thanks to the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

In part because of the unaffordable contracts of its unionized workers, Hostess filed for bankruptcy in January, when it reported $1 billion in assets but $2.5 billion in liabilities. A court-approved collective-bargaining contract included cuts to workers’ benefits and salaries. The bakers union reacted in typical fury and took to the picket lines this month (another union representing Hostess workers, the International Brotherhood of Teamsters, agreed to the cuts in September).

The walkout would have cost the already-weakened company an estimated $7.5 million to $9.5 million by this Monday. Unable to continue operating at such losses, Hostess warned that if striking workers didn’t return by Nov. 15, it would be forced to shut down operations altogether.

In spite of this existential deadline, the strikers refused to accept the necessary concessions. The union wanted its previous contract restored, claiming solidarity with workers everywhere. As union President Frank Hurt put it: “Hostess Brands is making a mockery of the labor relations system that has been in place for nearly 100 years. Our members are not just striking for themselves, but for all unionized workers across North America who are covered by collective bargaining agreements.”

For Hostess CEO Gregory F. Rayburn, however, the arithmetic spoke for itself: “We simply do not have the financial resources to survive an ongoing national strike.” After failing to reach a satisfactory agreement with its striking workers, Hostess was left no choice but to ask a judge for permission to liquidate the entirety of its American operations, though the firm agreed Monday to enter private mediation in a last-ditch effort to avert demise.

What that really amounts to, of course, is a liquidation of American jobs. Hostess employs some 18,500 workers in the United States, almost all of whom will lose their livelihoods thanks to the 5,000-plus workers who belong to the agitating hordes of the bakers union. Once again, a labor union ostensibly fighting for the “working man” has overplayed its hand and bankrupted the business that employed that “working man.”

Talk about killing the goose that laid the golden filling.

Hostess is not alone (see General Motors Co.). Indeed, cities and even entire states have been pushed to the brink of insolvency thanks to greedy union bosses perpetually pinching the public purse for unaffordable wages and pensions (see California, New Jersey and Illinois).

Now Hostess lays prostrate and penniless after another union-led mugging. Just in time for the holidays, thousands will be out of their jobs and the nation will be robbed of one of its most beloved — and affordable — treats.

After you have had your turkey and stuffing this Thanksgiving, put aside the pie and instead unwrap a golden slice of Americana — while you still can.

While you are counting your blessings, be thankful you don’t work for Hostess.

Matt Patterson is a senior fellow at the Competitive Enterprise Institute, where Crissy Brown is a research associate.