In 2012, Hostess, the iconic American bakery giant behind Ding Dongs, Ho Ho's and Twinkies, was bankrupt, with plans to slash more than 18,000 jobs and close its doors for good amid a crippling nationwide strike.
Then, in 2013, a snack-cake savior appeared. The Missouri-based sweets maker was bought for $410 million by a partnership between private-equity giant Apollo Global Management and C. Dean Metropoulos, a billionaire turnaround artist known as "Mr. Shelf Space" for his revival of brands like Vlasic, Hungry-Man and Chef Boyardee.
Now, the iconic dessert titan is resurgent, selling its golden, cream-filled Twinkies across the world under the name Hostess Brands and turning down $2 billion offers from a pack of hopeful buyers. On Tuesday morning, the company reached its latest peak when Reuters, citing anonymous sources, suggested Hostess would head to Wall Street with an initial public offering that would value the company at around $2.5 billion.
That's a huge turnaround, from Chapter 11 to IPO. But the true cost has been thousands of jobs.
The Hostess Brands of today, launched in 2013 under an Apollo-Metropoulos holding company, owns sweets and cakes under the Hostess and Dolly Madison brands, including Cupcakes, Donettes, Snoballs and Zingers.
But it looks and operates very differently than the chain from whence it came. The newer, thinner bakery giant kept only five of the 14 original dessert plants: Of those five, one was sold and another, an eight-decade-old bakery in suburban Chicago with 400 employees, closed in October.
The investment helped bring the classic American snack food into the 21st century. One 500-worker Kansas bakery outfitted with a $20 million Auto-Bake system, according to Forbes, now spits out more than a million Twinkies a day, doing 80 percent of the work once done by 9,000 workers across 14 plants.
From 9,000 bakery employees at 14 plants to 500 at one plant in Kansas. That's just the bakery division. Thousands of more supporting jobs were lost when the plants closed for good. This may be an extreme example of automation in the 21st century, but more of it is coming, and it's going to put a lot of people out of work very quickly.
In fact, we're seeing it now. How much of the "labor participation rate" being the lowest in 50 years is due to automation as a factor?
Do those Twinkies still taste good to you now?