Hostess Brands announced Friday it was suspending all operations and starting the liquidation of its assets in response to a nationwide strike by the Bakery Worker’s Union. Going out of business, in other words. No more Twinkies, Wonder Bread, or Ding Dongs. How will we survive?
NBC News reports as follows:
“Hostess Brands, baker of iconic Twinkies cakes, said Friday it asked a court's permission to shut down the entire company after a strike crippled its operations.
The move shuts down one of the nation's oldest and largest producers of baked goods. Founded in 1930, it produces such well-known brands, aside from Twinkies, as Ding-Dongs, Ho Ho's, Sno Balls and Donettes, not to mention Wonder Bread, which the company says is the best-selling white bread in the United States.
In a statement, Hostess said its bakery operations have been suspended at all plants and that it would lay off most of its 18,500 workers to focus on selling its assets. It said it has filed a motion with the U.S. Bankruptcy Court seeking permission to close its business and sell its assets, including 33 bakeries and 565 distribution centers.”
While it is difficult to report on this without a snarky reference to the products, icons of an earlier, pre-obesity crisis day when organic wasn’t a word and good parenting meant “putting meat on the bones” of kids, it is a real tragedy. Thousands of workers will be flung into the streets, job prospects grim. Investors will lose tons, and another relic of an American industrial age that seems far in our rear view mirror will disappear.
Why is this of importance to readers of Talent Management magazine? Because Hostess is going out of business over HR issues. It is not fashionable in the modern, 6-Sigmatized HR world to emphasize labor and employee relations, but there is no other area of HR that can put you out of business as fast as getting this part of the equation wrong.
I am not going to litigate on this page who was right or wrong in the Twinkies fiasco. It is being reported as a case of a company whose products were out of step with these healthy times, but that wasn't the immediate cause of the liquidation - it was the bad marriage between management and its workers.
Apparently, the company was seeking contractual give-backs from the union to reduce costs and the union dug its heels in. They struck and shut down the plants. According to the company, this caused cash to dry up, so the company is shutting the doors and turning off the lights. This might be an example of Big Labor overreach or a massive miscalculation. It might be a bluff by the company. We’ll see.
There is one thing I do know. Somewhere along the line, the company and its workers lost trust and faith in one another. It is likely relations broke down long before negotiating teams sat down at a bargaining table to hammer out a deal. Bad blood starts building at the micro level, not the macro. One abusive supervisor at a bakery here, one stupid policy there. Talent management that ignores hourly workers in its development plans. HR leadership that is tone-deaf.
What can you do to avoid planting the seeds of bad employee relations, union or no union, that will bear evil fruit someday? Pay attention to your company’s relationships with its hourly workers. Be fair, listen and communicate. Put labor and employee relations in your developmental skill set and avoid the company-killing mistakes bad employee relations can bring.
And stock up on Twinkies while you have a chance.