No More Twinkies?

Hostess Brands announced that the company will close, primarily because of labor issues. In a statement, the company blames a union strike for dooming the maker of beloved Ho Ho's, Ding Dongs, Sno Balls, and Twinkies.

HostessCEO Gregory F. Rayburn said the company doesn't have the "financial resources to weather an extended nationwide strike." The company statement emphasizes challenges and concessions already made: 

"Hostess Brands is unprofitable under its current cost structure, much of which is determined by union wages and pension costs. The offer to the BCTGM included wage, benefit and work rule concessions but also gave Hostess Brands' 12 unions a 25 percent ownership stake in the company, representation on its Board of Directors and $100 million in reorganized Hostess Brands' debt."

Although Hostess' 18,500 employees, understandably, are upset with the decision, some say the pay cuts were intolerable: "The point is the jobs they're offering us aren't worth saving."

Critics of the decision also cite post-bankruptcy-filing executive pay increases between 75 and 85%.

If you want a Twinkie badly enough, you can get a whole box on eBay for a mere $200,000 (starting bid). But some hope the brands will be bought, so the Twinkie may live on, after all.

Discussion Starters:

  • Analyze the company's statement in terms of structure, content choices, and tone. What works well, and what could be improved? (Download the statement.)
  • What persuasive strategies do you identify in the statement? Are you convinced that Hostess made the right decision?