Regardless of that, was the strike stupid? Yeah, they didn’t accomplish anything.
Did it really matter that they striked? No the company was going under and planning closing many warehouses already, which makes the strike even more pointless, hard to bargain against a dying company.
As the national appetite for junk food waned, the company fell on hard times, struggling against rising labor and commodity costs. In 2004, it filed for bankruptcy for the first time.
But the new private equity backers loaded the company with debt, making it difficult to invest in new equipment. Earlier this year, Hostess had more than $860 million of debt.
The labor costs, too, proved insurmountable, a situation that has been complicated by years of deal-making. The bulk of the work force belongs to 12 unions, including the International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.
The combination of debt and labor costs has hurt profits. The company posted revenue of $2.5 billion in the fiscal year 2012, the last available data. But it reported a net loss of $1.1 billion, largely from bankruptcy costs.
With profits eroding, the company filed for Chapter 11 in January. It originally hoped to reorganize its finances, seeking lower labor costs, including an immediate 8 percent pay cut.