The Associated Press ignored significant context about the role of organized labor in its report on the comeback of Hostess brands and the iconic Twinkie snack. The article privileged attacks from executives claiming unions were to blame for the company's demise while ignoring a history of union concessions, executive pay raises, and financial mismanagement that paint a different picture about the Twinkie's temporary expiration.
The AP reported Sunday that Hostess Brands LLC, a trimmed-down version of the defunct Hostess Brands Inc., is aiming to have Twinkies and other well-known Hostess brand products back on store shelves by July 15. The story noted that Hostess went bankrupt “after an acrimonious fight with its unionized workers” and described in he-said-she-said fashion how the company ultimately failed:
Hostess Brands Inc. was struggling for years before it filed for Chapter 11 bankruptcy reorganization in early 2012. Workers blamed the troubles on years of mismanagement, as well as a failure of executives to invest in brands to keep up with changing tastes. The company said it was weighed down by higher pension and medical costs than its competitors, whose employees weren't unionized.
To steer it through its bankruptcy reorganization, Hostess hired restructuring expert Greg Rayburn as its CEO. But Rayburn ultimately failed to reach a contract agreement with its second largest union. In November, he blamed striking workers for crippling the company's ability to maintain normal production and announced that Hostess would liquidate.
The trimmed-down Hostess Brands LLC has a far less costly operating structure than the predecessor company. Some of the previous workers were hired back, but they're no longer unionized.
The article's depiction of the company's fall omits crucial context and leaves readers with the impression that the act of discarding union workers is what allowed the “trimmed-down” company to re-emerge. The AP did not tell readers that, just three years prior to Mr. Rayburn's negotiations with labor, union workers made "substantial concessions" to aid the company's financial health, or that Hostess stopped contributing to workers' pensions and cut wages and benefits “by 27 to 32 percent.”
Nor did the AP story mention the dramatic pay raises Hostess provided its executives during its financial struggles. For example, Brian Driscoll -- Hostess CEO in March 2011 -- received a salary increase from $750,000 to $2.25 million, according to The Wall Street Journal.
And while the AP story claims that “workers” are blaming the company's woes on mismanagement and a failure to adapt to evolving consumer tastes, this has actually been the opinion of informed and objective third parties. The AP itself noted in 2012 that “Hostess' snacks don't neatly fit into the U.S. trend toward a healthier lifestyle.” The Washington Post wrote that Hostess had been “rife” with problems beyond labor issues, including “management's failure to freshen up a stale product line.” And The New York Times discovered that the company did not “have much of a finance department.”
The Twinkie's return to the American diet may ultimately be perceived as a comeback story. But with myths about the company's demise rampant in 2012 media reports, today's media should be careful not to rewrite history.