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Thursday, May 28, 2015

Simple Question: Why Are Twinkies The Same Price Without Unions?

Google Summary:
Twinkies and other snack cakes were purchased by private equity firms Apollo Global Management and Metropoulos & Co. after Hostess Brands said it was closing down in November. The firms are known for fixing up struggling brands. Hostess has said that Twinkies will remain the same price, at $3.99 for a box of 10. -- Jul 16, 2013

...will remain the same price?

Do they mean after running a publicity campaign to protect the brand's image and convince fans that Hostess' problems can only be solved by closing its business through a Romney-style vulture-capital asset sell-off "managed bankruptcy," ...that the cost of a box of Twinkies remains the same WITHOUT employing those greedy unions?

Yes. Yes, I think that's exactly what they mean.

But it gets much worse, or better, depending on your view of the "makers and takers."

According to this cream puff piece, a $3.99 box of Twinkies employed 9,000 workers at 14 plants before they shut it all down. They call that "the old regime."

So, what does a box of $3.99 Twinkies employ today? The article states 80% of Twinkie production from those 14 plants have been replaced by one 500-person plant. With 8,500 fewer production workers, they cut more than 90% of their workforce and overhead costs, but with zero cost savings to customers. That's the new regime. All at the old regime price of $3.99/box.

Blame the greedy unions!! Well. No.

The story teller has only credit to hand out and calls the job-killing process that transformed Hostess "efficient, productive, and value-adding" a "miracle comeback" that sparked the "resurrection of an American icon." By "American icon" they mean the Twinkie - not the worker - and conclude Hostess should be a Harvard Business School case study on how to turn around a business.

Lucky us.

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