Holman Jenkins’s column over at the Wall Street Journal paints a somewhat different picture of the Hostess bankruptcy than the one we’ve been hearing for the last couple of unions. Rather than being mostly a battle between labor and management is it possible that Hostess collapsed due to a battle between the teamsters’ and the bakers’ unions?
Hostess has spent eight of the past 11 years in bankruptcy. As the company explained to its latest judge, the Hostess brands “have not been able to profit from many of their existing delivery stops and have been unable to enter potentially profitable markets, such as dollar stores, vending services and movie theaters.”
If Hostess were able to rationalize or outsource delivery to serve these customers, ready to go are “new products based on its best-selling cake items that have a longer shelf-life and can withstand freezing en route to customers over longer transportation hauls.”
Under pressure on Monday from Judge Robert Drain to back down from their strike aimed at forcing the company to liquidate, the bakers themselves pointed to “what everyone in the baking industry knew: Hostess’s production costs were neither excessive nor out of line with the market but its distribution costs were—to the tune of between $80 million and $130 million annually.”
Jenkins isn’t attacking the bakers’ union—he’s defending them as rational actors. Unfortunately for the rest of us, their rational choice may leave the public on the hook for a substantial tab.
One last thing worth mentioning. Over the last several decades a succession of jobs that involved actual physical labor, like being a baker or meatpacker, have gone from being good-paying jobs to “crummy-paying” ones. That’s a consequence of bipartisan policies.