Digesting Twinkies' lessons
By George F. Will
Published: Saturday, Nov. 24, 2012, 8:56 p.m.
“All Gods were immortal.”
— Stanislaw Lec
And also brands, the gods of the marketplace. Earthquakes may strike, dynasties may fall, but Oldsmobile and Pan Am are forever. Never mind.
But about the death of Twinkies: Write obituaries in the subjunctive mood. Like Lazarus, this confection may be resurrected. In any case, the crisis of Twinkies maker Hostess Brands Inc. involves two potent lessons. First, market forces will have their way. Second, never underestimate baby boomer nostalgia, which is acute narcissism. The Twinkies melodrama has the boomers thinking — as usual, about themselves: If an 82-year-old brand can die, so can we. Is that even legal?
The late Daniel Boorstin, librarian of Congress and historian, said Americans belong to “consumption communities.” Are you a Ford or Chevy person? Sears Roebuck or Montgomery Ward? Wooed by advertising, people plight their troths to brands in marriages often more durable than boomers' actual marriages.
Hostess, which had 18,500 employees making and distributing more than 30 brands made in 36 plants, had been in and out of bankruptcy several times since 2004. Its terminal crisis began on Nov. 9 when thousands of union bakers went on strike to protest wage, health care and pension cuts imposed by a court. They objected to a 17-percent increase in their contribution for their health care benefits.
Amazingly, Washington did not offer Hostess a bailout. This may be a constitutional violation — denial of equal protection of the laws. Since the onset of the financial crisis, the government has decided that some systemically important financial institutions are too big to fail (TBTF). Why, any fair-minded person will ask, was Hostess not TBTF?
Granted, it was not big as a boring matter of mere size. It was, however, big in what matters most — boomers' minds. They fondly remember opening their lunchboxes and finding Twinkies nestled next to peanut butter and jelly sandwiches made of Wonder Bread (another endangered Hostess species). Boomers, a generation of food scolds, became adults who considered Twinkies and other sugary things sinful. They should be shedding scalding tears of remorse.
Anyway, why GM and not Hostess? The Troubled Asset Relief Program was passed to rescue financial institutions. But Washington reasoned: “What's legality among cronies?” So soon TARP was succoring GM, which was not a financial institution.
Hostess had 372 collective bargaining agreements with various unions that had sought and received — shed no tears for complicit management — some interesting benefits. The Teamsters liked the rule that bread and pastries might be going to the same place but must go in different trucks.
The bakers rejected management's final offer by a voice vote. The Teamsters, who favored a compromise, wanted a secret ballot. In Washington, operating from impressive headquarters located on prime real estate at the foot of Capitol Hill, the Teamsters' leadership has lobbied Congress for the Employee Free Choice Act. That is the Orwellian title of legislation that would effectively abolish employees' right to secret ballots in unionization elections, replacing them with “card check,” whereby individuals confronted by union organizers sign a card indicating support for the union.
The market said that Hostess as configured made no sense. If, however, Twinkies and perhaps other Hostess brands retain value, the market will say so, and someone will produce them. Probably in a right-to-work state.
Whatever else a hospital ought to do, supposedly said Florence Nightingale, it ought not to spread disease. And whatever else unions should do, they should not put employers out of business.
George F. Will is a columnist for The Washington Post and Newsweek.
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