Hostess CEO: Buyers lining up for our brand
posted at 12:01 pm on November 19, 2012 by Ed Morrissey
The rush to stockpile Twinkies and Ho-Hos the past week may have been premature, according to ABC News. Hostess will appear in bankruptcy court today to settle the sale of assets in their liquidation, brought on by a failure to reach a settlement with the bakers’ union. However, Hostess CEO Gregory Rayburn says that they have already received offers to buy the brands — including a very promising offer from a Mexican group that may have a better economic model than can be found in the US:
“I think we’ll find buyers,” CEO Gregory F. Rayburn told ABC News on Sunday. ”A few have surfaced already since Friday expressing interest in the brand to acquire them.”
Con Agra and Flowers Foods are among the companies that have expressed interest in Hostess, but Mexican company El Grupo Bimbo may have an edge, the Christian Science Monitor reported Saturday. Grupo Bimbo, headed by Mexican billionaire Daniel Servitje Montull, is the largest bread-baking company in the world.
Economists say part of the reason Hostess struggled was due to high sugar tariffs meant to protect local producers, the Monitor reported. Grupo Bimbo could take advantage of lower sugar prices in Mexico.
First, this development has no small amount of irony. The labor movement has attacked Republicans for many long years for off-shoring jobs in the name of free trade. Thanks to the bakers’ union, we may end up with almost 19,000 jobs heading south of the border, in the factories of Grupo Bimbo. The protectionist sugar tariffs that both parties have extended and championed may end up having their own ironic role in these job losses, too.
Meanwhile, the head of the bakers’ union continues to dream big:
Frank Hurt, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers Union told the Wall Street Journal that there’s “more than a good chance” someone would swoop in to buy the company’s 30 brands and preserve jobs. He said that Twinkies and Wonder Bread are popular and they will be “produced somewhere, some time and by our members.”
Don’t bet on it. If they’re produced anywhere in the US, expect those jobs to end up in right-to-work states. Future buyers got a pretty good look at the irrational leadership of this union — which even the Teamsters tossed under the bus — and they’ll know better than to put the new company in the same position as the old company.
For the moment, we don’t know whether we’ll ever see a Twinkie come off the production line again, but I doubt the situation will be quite as dire as this (warning: not safe for work – language):