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Fri Nov 16, 2012, 12:53 PM

 

It wasn't the union that killed the Twinkie. It was vulture capitalism. [View all]

Before you go blaming the union for Hostess' demise, look at the facts.

In 1995 a company called International Bakeries, which was essentially a vulture capital arm of a computer company called Data Processing Financial and General Corporation, went on a massive spending spree. They not only bought Hostess but the San Francisco French Bread Company, John J. Nissen Baking Company, Drake's, My Bread Company, and tons of other companies.

They did this by borrowing like batshit crazy and eventually defaulted on their loans, leading to bankruptcy in 2004.

In 2009 they emerged from bankruptcy by BORROWING MORE FUCKING MONEY. They borrowed from Ripplewood Holdings, Silver Point, Monarch, and GE Capital. All these loans caused more payments and more interest accruing, leading to more and more debt. It was this debt that caused their collapse.

If it hadn't been for easy credit, merger mania, leveraged buyouts, and greedy conglomerates whose philosophy was "if you can't beat them buy them out," then all the little brands (including Hostess) that this group of predators bought with borrowed money might still be small and innovative enough to survive financial hard times with little or no debt of their own.

So always remember: it wasn't the unions that killed the Twinkie, it was the modern vulture capitalist culture.

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Reply It wasn't the union that killed the Twinkie. It was vulture capitalism. [View all]
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