When Elvis died, I was shocked and saddened. Shortly afterward, I mourned the demise of Overton Square. And I internalized my pain when they closed Borders bookstore. But I can't live in a world without Twinkies. Hostess Brands made a surprise announcement that after 82 years, it was going out of business and liquidating its assets. There was an immediate rush on grocery and convenience stores across the country. I wanted to pick up a case of Donettes, but the hoarders beat me to them. And that wailing sound you heard last week came from stoners all over Colorado and Washington who just got gobsmacked by Newton's Third Law of Motion: For every action, there is an equal and opposite reaction. What an evil karmic trick: to finally legalize recreational marijuana and then eliminate Ding Dongs.
The general panic that gripped the public was fed by rumors of a growing black market where fortunes could be made in discontinued Hostess products. I found it ridiculous until I saw that sellers on eBay were offering Twinkies for $5,000 each. One optimistic entrepreneur was offering a box of Twinkies for $200,000, no doubt looking to finance a summer home. Being a person who occasionally enjoys an orange frosted cupcake, I lurched for the kitchen, plundering through the pantry, thinking that if my wife bought a pre-bankruptcy-announcement box of Twinkies, we could pay off the mortgage and tell Bank of America to kiss our ass.
I use Twinkies for medicinal purposes, so the nutritionists are wrong to say they have no reason to exist. If I have medicine that is not to be taken on an empty stomach, what's better than a Twinkie to soften the blow? I can recall times in my wild past when I awoke with a queasy stomach due to too much fun and drink the night before, and the only conceivable thing to eat was a Twinkie. The soft vanilla cake can absorb anything, not to mention the delicious cream filling that's never seen a cow. However, I had eaten the last box, never imagining that I was consuming diamonds and rubies with every bite. Now, I'm conflicted over whether to eat this last loaf of Wonder Bread or vacuum-seal it, put it in a display case, and see if it appreciates in value.
Hostess' management blamed the Grain Millers Union, which has been on strike since November 9th. Immediately, right-wing propagandists heaped scorn on the selfish workers and their uncooperative union bosses, and conservative bloggers and social media trolls followed suit. Their message was, "If you miss your Ho Hos, blame the unions." But like Paul Harvey used to say, "and now for the rest of the story."
Hostess is owned by a private equity firm, Ripplewood Holdings, and two hedge funds, Silver Point Capital and Monarch Alternative Capital. Since 2002, Hostess has had six CEOs. When Hostess emerged from its first bankruptcy in 2004, the unions agreed to concessions that saved the company $110 million. Rather than investing in modernization, the company's board voted to raise the CEO's salary to $2.55 million, tripling the compensation paid to the previous executive. In addition, other executive salaries were increased by as much as 80 percent. According to The New York Times, "Private equity backers loaded the company with debt, making it difficult to invest in new equipment."
In 2011, the company again filed for bankruptcy, unilaterally imposing wage and benefit cuts and ceasing pension payments for employees. When the union went on strike, management demanded more concessions and gave workers a deadline to return to their jobs. Hostess employees responded by saying there wasn't a Sno Ball's chance in hell they would return under those conditions. So management announced liquidation, filing papers prepared well in advance of their demands to the union.
This was a real Mitt Romney/Bain Capital kind of deal. The new CEO is a liquidation specialist. And although Ripplewood Holdings wanted to preserve the brand, the hedge-fund boys refused to put up any more cash. In the event of bankruptcy, the equity partners and their investors walk away with millions of dollars, leaving 18,500 workers unemployed and 33 plants shuttered. If they can place the blame on the unions, they'll get away clean.
One laid-off sacker who had worked for Hostess for 35 years said, "The people who are running this company are not interested in making bread." At least, not in the sense he means. Hostess revenues are estimated to be $2.5 billion per year, with Twinkies alone earning $68 million so far this year. The brand is so popular that a petition has been circulated urging President Obama to "nationalize the Twinkie industry." If Hostess is allowed to go the way of Kay Bee Toys, the black-market underground in sugary treats could give rise to a Cupcake Mafia, with Twinkie the Kid as the cappo di tutti capi. I would hate to see bloodshed and violence erupt over contraband Dolly Madison cakes, even though they are to die for.
All is not lost for Twinkie Nation. Hostess has a suitor from Mexico named Grupo Bimbo, which tried to buy the company after its first bankruptcy. At first, I laughed at the thought of mothers sending their kids off to school with Bimbo cakes, but as it turns out, Bimbo Bakeries owns Sara Lee, Entenmann's, Ball Park Buns, and Thomas' English Muffins. Those pesky Mexican job-takers have been making our delicious pastries right under our noses. I hope Grupo Bimbo succeeds in its efforts to purchase the company. I would hate to see an iconic American brand like Hostess, which has been serving up empty calories for eight decades, fall victim to vulture capitalists, even if the company has to move to Mexico.
I'll volunteer to be the first to try a Mexican Twinkie or even a Hostess Taco. It's often been said that archaeologists in some future millennium will stumble across a once-vital civilization that crumbled into dust, and the only remaining things intact will be cockroaches and a box of Twinkies. In fact, the shelf life of a Twinkie is about a month. But if a buyer doesn't step forward soon, before the private equity firm sells off the company in small lucrative pieces, the entire Hostess product line may finally have met its expiration date.
Randy Haspel writes the "Born-Again Hippies" blog, where a version of this column first appeared.