“Hostess with the Leastest” – Are unions really to blame?

Applicable as of July 1, 2025: Oakworth Asset Management, LLC (“OAM”) is a registered investment adviser that is owned by Oakworth Capital Bank Inc., Member FDIC (“OCB,” or together with OAM, “Oakworth”). Please note that OCB and OAM are separate entities that provide different services. All investment adviser services including investment management and financial planning are provided by OAM. OAM only began operations on July 1, 2025. Any content that was created prior to that date is specific to OCB and not OAM and is provided for informational purposes only. The statements or opinions expressed in this article do not necessarily reflect the views or opinions of OAM. The article was produced prior to OAM’s registration as an investment adviser and therefore was not reviewed for compliance under the Investment Advisers Act of 1940. OAM believes that the prior content is appropriate because of the similarities in OAM services to OCB services. The individuals involved in the production of OCB content will also be involved in OAM services. For additional information about OAM, including its services and fees, send for the firm’s disclosure brochure using the contact information contained herein or visit advisorinfo.sec.gov.

Hostess Brands has made a lot of headlines recently. To the outside observer, it seems as though the unions are forcing the company into liquidation. What is the real story? Are unions really to blame?

Hostess’ management is correct when it says the company has to slash sales, marketing, and administrative costs (SG&A) to keep the doors open. After all, the company seems to be in and out of bankruptcy. On the flipside, the bakery union has a point when it argues poor management decisions and massive debts are the real reasons the company is in trouble, not the workers.

Who is most right? Frankly, as in most cases like this, it doesn’t really matter. Finger pointing is a no-win situation, particularly when the real problem is this: Hostess Brands sells low margin products for which there is elastic demand in a highly competitive industry. That is a fancy way of saying, you don’t really need Twinkies, Ho-Ho’s, or even Wonder Bread, particularly when there are other options available….  http://on.mgmadv.com/WxrYyu

As previously published in the Montgomery Advertiser on 11/25/12