Home / Articles / Commentary / National - Jim Hightower / A death in the family – and the question is: whodunit?
Print this Article
Thursday, Dec. 6, 2012 06:14 pm

A death in the family – and the question is: whodunit?

Born in 1930 in Schiller Park, Ill., the deceased was 82 years old at the time of passing, which ironically was the day before Thanksgiving.

Having long enjoyed the sweet life, the end was a bit bitter, for the dearly departed’s estate had been mercilessly plundered in recent years by unscrupulous money managers. This left 18,500 surviving family members in dire straits. Indeed, the family contends that the octogenarian’s death was not due to natural causes, but to foul play – a case of corporate murder.

The Twinkie was the best-seller of Hostess Brands, a conglomerate purveyor of some 30 nutritionally challenged (but moneymaking) brand-name food products, ranging from Wonder Bread to Ho Hos. In the past year, Hostess racked up $2.5 billion in sales – yet it suffered a staggering $1.1 billion in losses. Thus, on Nov. 21, Ripplewood Holdings, the private equity outfit that had taken over the conglomerate in 2009, pulled the plug, solemnly announcing that Hostess simply couldn’t survive.

Why? Because it was burdened with overly generous labor contracts, the firm’s executives declared, adding that greedy union officials refused to save the company by taking cuts.

Wait a minute. They claim that the bereaved loved ones of the Hostess family killed the Twinkie? Holy Agatha Christie, that can’t be right.

Remember the horrible murders in 1978 of San Francisco Mayor George Moscone and Supervisor Harvey Milk? At the killer’s trial, his lawyer argued for leniency on the grounds that his client subsisted on a steady diet of junk food, which had addled his brain. This claim entered the annals of American jurisprudence as the “Twinkie Defense.”

Even less defensible is the campaign by Ripplewood financial manipulators to lay the death of Hostess at the feet of loyal, longtime employees who, after all, need the jobs. In fact, far from greedy, Hostess workers and their unions have been both modest and faithful. Their wages are decent but not at all excessive – only middle class. And the charge that unions would not make sacrifices to help the company is a flat-out lie, for they had previously given back $100 million in annual wages and benefits to help it survive.

The true perfidy in this drama is not in the union, but inside Ripplewood’s towering castle of high finance in New York City. After buying Hostess in a bankruptcy sale, these equity hucksters proceeded to feather their own nests, rather than modernize Hostess’s equipment and upgrade its products, as the unions had urged. For starters, these profiteers piled an unbearable debt load of $860 million on Hostess, thus diverting its revenues into nonproductive interest payments made to rich, absentee speculators. Also, they siphoned millions of dollars out of Hostess directly into their corporate pockets by charging “consulting and management fees” that did nothing to improve the snack-makers financial health.

But it was not until this year that their rank managerial incompetence and raw ethical depravity fully surfaced. While the Ripplewood honchos in charge of Hostess were demanding a new round of deep cuts in worker’s pay, healthcare, and pensions, they quietly jacked up their own pay. By a lot! The CEO’s paycheck, for example, rocketed from $750,000 a year to $2.5 million.

Like a character in a bad Agatha Christie whodunit, Ripplewood – the one so insistently pointing the finger of blame at others – turns out to be the one who killed the Twinkie. Along with the livelihoods of 18,500 workers.  

Jim Hightower is national radio commentator, columnist and author.
Log in to use your Facebook account with
IllinoisTimes

Login With Facebook Account



Recent Activity on IllinoisTimes

Calendar

  • Thu
    31
  • Fri
    1
  • Sat
    2
  • Sun
    3
  • Mon
    4
  • Tue
    5
  • Wed
    6