The truth is that the Bain-style vulture capitalists invested in Hostess to profit not by making quality products, but by bleeding the company of every dollar before discarding it.
They’re doing it because they can, because that’s what Wall Street speculators do when they get their hands into a company’s till.
And today, the millionaires are walking away, with an added twist. They’re blaming the bakers and others who faithfully made the iconic Twinkies and other Hostess goods for decades—not for untold riches but for a decent paycheck and good benefits.
Not even a week before Thanksgiving, not even two weeks after the American electorate rejected this winner-take-all-view of the world, more than 18,500 working people face the prospect of looking for work in a still-dismal economy.
This is a story America has heard too many times.
Wall Street investors first came onto the scene with Hostess about a decade ago, purchasing the company and then loading it with debt.
All the while, its executives talked of investments in new equipment, new research and new delivery trucks, but those improvements never materialized.
Instead, the executives planned to give themselves bonuses and demanded pay cuts and benefit cuts from the workers, who haven’t had a raise in eight years.
In 2011, Hostess earned profits of more than $2.5 billion but ended the year with a loss of $341 million as it struggled to pay the interest on $1 billion in debt. This year, the company sought bankruptcy protection, the second time in eight years.
Still, the CEO who brought on the latest bankruptcy got a raise while Hostess demanded that its workers accept a 30 percent pay and benefits cut.
The workers at Hostess want the company to survive and prosper. Of course they do. And they’ve proved their willingness to make sacrifices to enable Hostess to thrive. Just three years ago, the workers accepted wage and benefit cuts that saved the company a reported $110 million every year. Where did the money go?
It’s heart-breaking to think of each of those workers in cities and towns all across America who have seen their jobs vanish. But as painful as it is, it’s heartening to know these brave workers stood up against the greed and destruction of Wall Street.
The unified Bakery Workers rejected the last cruel deal from executives by a vote of 92 percent. They chose to raise their heads with pride, as well they should.
One way or another, working people in America have to stop this race to the bottom.
This Thanksgiving, I’ll be giving thanks to the Bakery Workers for taking a stand. Together, we will make America work for regular working people again.