Gross, Daniel, Newsweek
Byline: Daniel Gross
What really did in America's favorite guilty pleasure.
National Notebook: For anyone who remembers the days before schoolkids ate free-range chicken wraps and kale chips, reading the news Hostess Brands posted on its website Nov. 16 was like watching Howdy Doody get strangled: the 82-year-old company, which makes Wonder Bread, Twinkies, and other triumphs of American food engineering, would shut down immediately and ask a bankruptcy court to let it hold a fire sale on everything it owns.
The proximate cause? The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents about 5,000 Hostess Brands workers, wouldn't sign off on the bankrupt company's latest reorganization plan and had gone on strike Nov. 12. Claiming that the company lacked "the financial resources to weather an extended nationwide strike," CEO Gregory F. Rayburn said in a statement that "Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders."
At first blush, the brinksmanship over Twinkies--Twinksmanship?--was a case of junk bonds meeting junk food and producing a junky result. The parent company first went into Chapter 11 in 2004, where it stayed for more than four years before emerging under private-equity ownership. Rechristened Hostess Brands, it made a return trip to Chapter 11 in January 2012, laboring under a $700 million debt load.
The new owners--hedge funds that had purchased the company's debt--brought in Rayburn, who sought to cut employees' wages and reduce pension and 401(k) contributions. …