So Long And Thanks For All The Snacks: Hostess Closes Down
Sad day in Snack Town, or more fuel for anti-unionists?
Hostess, based in Irving, Texas, said it was saddled with costs related to its unionized workforce. The company had been contributing $100 million a year in pension costs for workers; the new contract offer would've slashed that to $25 million a year, in addition to wage cuts and a 17 percent reduction in health benefits.
Management missteps were another problem. Hostess came under fire this spring after it was revealed that nearly a dozen executives received pay hikes of up to 80 percent last year even as the company was struggling. Although some of those executives later agree to reduced salaries, others—including former CEO Brian Driscoll—had left the company by the time the pay hikes came to light.