![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
In the short term, the reason that Hostess is going bankrupt right now is that the union was negotiating from an inflexible position, and management genuinely couldn't continue under any terms the union was willing to support. So, anti-union people can make an honest case that this is the union's fault.
However, that is just why it collapsed right now. It's the immediate, proximate cause, but not the fundamental, underlying cause. Larger-scale problems are that the company already went into and out of bankruptcy, and was bought up by private equity firms. Who did what private equity firms do, and started extracting value as much as they could. In the process, executive compensation went way, way up, and worker compensation didn't. Leading to both worker discontent, and general inefficiency.
But, even deeper than that, the problem is that pre-packaged artificial snack cakes just aren't that good, and, these days, people tend to go for things that taste better. I can go to the supermarket and buy a pack of Hostess cupcakes, or buy a couple cupcakes from the bakery case, where they were baked in the store. Those cupcakes are going to be about the same price, maybe a little more expensive, and won't be GOOD, but they'll be far ahead of the Hostess ones.
The snack cake market just has too many players for the customer base.
And, in any case, Little Debbie is doing just fine. And, frankly, Little Debbie products are 1) slightly cheaper, 2) significantly tastier, and 3) kosher. I'd be a lot more upset about Little Debbie going away than Hostess.
However, that is just why it collapsed right now. It's the immediate, proximate cause, but not the fundamental, underlying cause. Larger-scale problems are that the company already went into and out of bankruptcy, and was bought up by private equity firms. Who did what private equity firms do, and started extracting value as much as they could. In the process, executive compensation went way, way up, and worker compensation didn't. Leading to both worker discontent, and general inefficiency.
But, even deeper than that, the problem is that pre-packaged artificial snack cakes just aren't that good, and, these days, people tend to go for things that taste better. I can go to the supermarket and buy a pack of Hostess cupcakes, or buy a couple cupcakes from the bakery case, where they were baked in the store. Those cupcakes are going to be about the same price, maybe a little more expensive, and won't be GOOD, but they'll be far ahead of the Hostess ones.
The snack cake market just has too many players for the customer base.
And, in any case, Little Debbie is doing just fine. And, frankly, Little Debbie products are 1) slightly cheaper, 2) significantly tastier, and 3) kosher. I'd be a lot more upset about Little Debbie going away than Hostess.