It’s a report that is sure to rankle both adult members of the Obama family — Mister because it is another reminder that unemployment has remained at or above 7.5% for 54 straight months, Missus because it mocks her personal crusade to drive manufacturers of junk food out of business.
Read it and weep: According to CNNMoney (via Fox 8 Cleveland), of the 18,500 people employed by Hostess Brands when the company went bankrupt in November, between 20% to 25% will be reporting for work now that the popular snack cakes are back in production.
Natalie Everett, a bread and snack industry analyst with IBISWorld, notes that Apollo Global Management and Metropoulos & Co. — the two companies that jointly acquired the Hostess imprimatur — will be automating production, replacing workers with equipment and machinery.
When Hostess announced plans to liquidate in November, some 6,600 employees were members of a bakers’ union, while another 7,500 were drivers who belonged to the Teamsters. It was the bakers’ reluctance to negotiate a new contract with reduced wages and benefits that prompted the company to fold up its tent.
Hannah Arnold, a spokeswoman for the Apollo-Metropoulos venture, said that the reduction in jobs is partly due to the new owners’ different business model. Instead of using truck drivers as salesmen to deliver the product and stock the shelves of about 50,000 stores, Apollo-Metropoulos will hire outside trucking firms to deliver trailers full of the product to retail distribution centers. This arrangement will enable the company to reach even more stores.
Another factor in the loss of jobs is the permanent shuttering of nearly 600 outlet stores used by the old Hostess Brands to sell products directly to consumers.
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