Hostess Brands (2012)

Hostess Brands' 2012 liquidation ended the company that made Twinkies, Wonder Bread, and Ho Hos—brands that had been American icons for decades. The collapse demonstrated how labor conflicts can destroy companies even when both sides lose, and how private equity ownership can weaken organizations to the point where any stress becomes fatal. The company had already filed bankruptcy in 2004, but emerged with restructured debt and union contracts that proved unsustainable. Hostess's mechanism failure was accumulated obligations exceeding operational capacity. The company supported 372 collective bargaining agreements covering 5,600 routes and 40 bakeries. This complexity created coordination costs that consumed operational margin. Hostess couldn't close inefficient bakeries, change delivery routes, or adjust workforce without negotiating with dozens of unions—path dependence on a structure designed for a different era. The final strike, by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), was called after Hostess demanded wage cuts to survive. The union calculated that liquidation was preferable to further concessions; they may have been correct for their members (who could find other jobs) but fatal for the company. When Hostess announced liquidation, 18,500 workers lost jobs. The brands were purchased by Metropoulos & Co. and Apollo Global Management, who restarted production with a non-union workforce—demonstrating that the products remained viable even when the company wasn't.