The Downfall of An Iconic American Company

	A court ruling on Wednesday November 21, 2012, began the immediate liquidation of Hostess Brand Inc., the producer of products such as Twinkies, Ho Ho’s and wonders bread.  The company will be forced lay off the entire workforce, an estimated 18,500 employees by the end of the year.  This essay will emphasize the decline and eventual death of America’s beloved business organization Hostess.  I will discuss actions taken by Hostesses management throughout the course of the last decade and whether actions taken inevitably led to the downfall of Hostess Brand Inc and if so who is to bare the burden of blame its demise
	Hostess Brands Inc, an 85-year-old iconic producer of food brands first dealt with bankruptcy trouble back is 2004.  A similar attempts to maximize earnings per share led to ‘Missteps by private-equity firm, hedge funds and managers since burdened the company, despite its more than $2 billion in annual sales.’(Feintzeig 2)  Other failures of management can be attributed to a decision not to adjust to the changing demands of a more health conscious marketplace.  Environmental factors such as increased cost of ingredients and fuel, as well as the current U.S recession are believed to have further weakened Hostess.
	Though Hostess executives and much of the media continue to blame Hostesses union’s decisions to strike as the main cause for the corporations decline. Months preceding the closure there was a decline of productivity because of an inability of union leaders and Hostess executives to come to an agreement for a new contract. The conflict was further escalated over a court-imposed contract that cut employees wages by 8%, commissions, a 17% increase in health care cost, as well as a restructuring of employees pensions in ways that could reduce payout for eventual retirees.  November 9th, two thirds of hostess’s 36 plants were forced to close due to the decision of Hostesses employees to strikes. 12 days later
	This process is not new to hostess, eight out of the last eleven years hostess has been in a bankruptcy, but this time is the nail in the coffin or so they say.  Howard W. Jerkins JR describes this a nothing more than ‘A corporate paper death’; A way for hostess to disengage the company from the malevolent and arbitrary union-imposed work rules, such as drivers being unable to load their trucks, A separate worker, arriving at the store in a separate vehicle, had to be employed to shift goods from a storage are to a retail shelf, and finally what he describes as icing to the cake, the inability for the products Wonder Bread and Twinkies to ride in the same truck.
	 The articles also pointed out products placement issues such as an inability "enter potentially profitable markets, such as dollar stores, vending services and movie theaters”. Other issues included the products short shelf life and an inability to withstand freezing during transportations. What will become of the companies brand name and other capital after liquidation is unknown, hostess labor however are unlikely to be part of any reconstruction projects.


					Work Cited
FEINTZEIG, RACHEL. "Twinkie Maker Hostess to Close." Wall Street Journal. N.p., 16 Nov. 2012. Web. 26 Nov. 2012.

JENKINS, HOLMAN W., JR. "Jenkins: Twinkies—A Defense." Wall Street Journal. N.p., 20 Nov. 2012. Web. 26 Nov. 2012.