You Can’t Spell Hostess Without Host

November 20, 2012
Rated G

As I grew up, I was led to think that being an entrepreneur or building a company was about building a dynasty, about providing a product or service and building something for the future. Certainly building a company is about making money, to make money for the owners as well as for its workers and as such for the surrounding community. To make money today and tomorrow and for many tomorrows to come.

It would seem that is no longer the case, a current example being Hostess Brands, Inc. Hostess, under one name or another, began in 1930. It produces more iconic names than you may be aware. Sure, you know about the Twinkie. How about Wonder Bread, Nature’s Pride, Dolly Madison, and Drake’s. Yes, they are all part of Hostess Brands, Inc., that long list and many others all growing from a budding bakery in 1930, would suggest a dynasty. But things are different these days.

In 2004 Interstate Bakeries, the owner of the brand “Hostess,” filed for bankruptcy. When it came out of that bankruptcy, it changed its name to Hostess Brands. The bankruptcy resulted in Hostess Brands becoming a privately owned company with equity shares held by a variety of other companies and individuals. Restructuring was planned.

The 2004 bankruptcy resulted from a huge debt that Interstate Bakeries had accumulated. The restructuring after the bankruptcy was to reduce and even eliminate that debt. Those in charge of the restructuring managed to double the debt between 2004 and 2012. Okay, there was a global financial meltdown in 2008. But still, to double their debt seems like poor management. With brands like Twinkie and Wonder Bread, you would think you could find ways to move product or sell off a brand or two to reduce the debt, not double it.

So now Hostess Brands is filing for bankruptcy again and basically requesting to sell off its assets and shut its doors. It is blaming it all on the employees and pensions. Those darn employees who make the products. How dare they want a living wage and health care and a retirement plan? Did their wages and pensions double between 2004 and 2012? No. They actually held pretty steady. But those darn employees and their communities, it is all their fault, or so Hostess says.

I think there is going to be no problem selling off the Twinkie brand, or Wonder Bread brand, and a host of others. I’ll bet they will fetch millions, if not billions from the factories, formulas, machinery, and the names themselves. Resolving the debts, especially using the fun trickery of bankruptcy, should be effortless. I’ll warrant with tons of cash left over.

There is the crux. Where people at one time built companies to create dynasties they could pass on to their great-great-grandchildren, these days’ people are more concerned with the bucks they can get today. The owners of Hostess Brands will not make any money tomorrow by closing today. However, they feel they will make enough to make it worth their effort to forego any future monies. They feel they will make enough to last for a few generations. They are thinking they will rake in enough that they and their offspring will not have to worry about the future. They do not care about their employees or their communities. They are looking out for themselves only. Dynasty be damned.

There does not seem to be much of a host in Hostess.

About Sifu Keith Mosher

My new book, "Astro Boy, Sensei, and Me" is available now, as is my Sci-Fi joy ride, "On a Sphere's Edge". I have a Bachelor of Media Arts degree from USC. I have been an Audio Producer / Engineer, a Law Office Manager, and I am currently an Author and a Martial Arts Instructor.
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