From a cold, objective perspective, a strong case could be made that the baking industry will benefit from the sudden and rapid implosion of Hostess Brands, Inc. Remaining baking companies already are picking up large pieces of business from customers seeking to assure an adequate supply of bread on the shelves. Shares of Flowers Foods, Inc. jumped 12% in trading Nov. 16.
But any such analysis does nothing to diminish feelings of horror over what has been the greatest debacle in the history of commercial baking. The layoff of nearly 18,500 employees and the ignominious ending of a company with as proud a heritage as just about any in corporate America was incredibly painful to watch unfold.
Fully recognizing a wide array of forces contributed to these events, one individual deserves special singling out for propelling Hostess to this disaster. The behavior of Frank Hurt, president of the Bakery, Confectionery, Tobacco and Grain Millers International Union, in the period leading to this dissolution could only be characterized as careless and heartless. Unwilling to negotiate, Mr. Hurt spearheaded a strike knowing the only possible result would be the liquidation of the company.
Rather than address this inevitability or even its possibility, Mr. Hurt was consumed in the final days before operations were halted with finding as many ways as possible to lay blame for the company’s demise on a series of what he characterizes as inexperienced and incompetent c.e.o.s and greedy Wall Street vultures. While the Wall Street accusations ring hollow (vast amounts have been and will be lost by investors), he surely is correct that management missteps were central in bringing this company low, to the point Hostess made a best and final offer requiring painful cuts of everyone working there.
Still, the inability of the company’s chief executives to lift Hostess upward over the last several years does not mean others are free from culpability during this period. And Frank Hurt was in a position of influence, ineffectively exerted, through the entire period of the company’s decline – what could be called the Sullivan/Elsesser/Alvarez/Jung/Driscoll/Rayburn era.
Frank Hurt, who has been president of the B.C.T.G.M. since the early 1990s, is not free from responsibility when it comes to the failure of Hostess to retool during the last 20 years. But it is in the last several months in which Mr. Hurt’s behavior has become most egregious. It’s difficult to imagine a more serious issue to bring to his membership than the company’s final offer, but the manner in which the B.C.T.G.M. vote was conducted drew stern criticism from the International Brotherhood of Teamsters and prompted the bankruptcy judge to disqualify the results.
Defending its decision to strike in the final hours before the liquidation filing, Mr. Hurt claimed solidarity from unions all over the world. But the claim was laughable in view of the response from the bakers’ “brothers” at Hostess – the Teamsters, who say they were not consulted before the bakery workers went on strike and pleaded with the bakery workers to end their walk out.
The Teamsters, in their announcements in recent days, have tried bravely to maintain solidarity with the B.C.T.G.M., but Mr. Hurt simply made that impossible. Establishing Mr. Hurt’s motives throughout this process has been difficult, but Hostess c.e.o. Greg Rayburn finally put into words what has become an inescapable if horrendous conclusion – “I believe the leadership of the (B.C.T.G.M.) is willing to sacrifice its Hostess employees for the sake of preventing other bakery companies from asking for similar concessions.” Mission accomplished.
It is possible, perhaps likely, the Hostess reorganization plan would have failed even if approved. But the plan was the last remaining opportunity for Hostess Brands to remain intact, giving the best hope for a large number of Hostess workers to retain their jobs. One individual – Frank Hurt -- snuffed out that hope.