
What it took to save the Twinkie - alwillis
https://www.washingtonpost.com/news/business/wp/2016/07/05/what-it-took-to-save-the-twinkie/
======
hedora
I've seen a lot of stories that blame robots and unions for the job losses,
and praise the new managment's tough choices, but it is all a distraction.

They reformulated twinkies to have a longer shelf life. This let them fire the
distribution channel, and close all but 3 of 40 factories. I haven't tried the
new twinkies, but the consensus on slashdot (this is running there too) and
elsewhere is that they taste like cardboard.

So, they didn't really save the twinkie at all; they just slapped the brand on
a different (and vastly cheaper) product, and now they're prepping for an IPO
by running consumer (investor) facing stories like this one.

Prediction: A year or so after this fall's IPO, they burn through their brand
equity, sales tank, and the stock collapses.

------
zaroth
It's not just Hostess automating, I think baking in general is becoming
increasing automated. I was talking to a COO of a large mill, and he remarked
how customers asking for significantly tighter tolerances on the makeup of
their various flours because they've automated the whole line and need highly
predictable results.

------
seibelj
You mean the same amount of quality twinkie product was created at a fraction
of the cost? And this is why the old company went bankrupt? Sounds like a
success story to me!

------
jimjimjim
AI/learning startup idea: build an AI to do the role of middle-to-upper
management or maybe just the c-suite?

Just think of the profits. sacking a thousand blue collar factory workers
won't save much but fire the decision makers (or outsource them) and you'll
save an absolute fortune.

I'm not even joking. It's unlikely to happen soon but if this were possible
the savings would be amazing!

~~~
ryankupyn
I've always wondered how effective this would be in different industries. In
some businesses, leadership exists to make very easily quantifiable (and
perhaps therefore more automatable decisions) - answering questions like
"Should we build a new factory?; What product lines should we develop?".

Where I work, in consulting, the senior leadership exists almost solely for
the purpose of building relationships with customers and bringing in business
- really hard for AI without a radical change in the sales model (but I can
imagine a sort of Consulting-As-A-Service, given that we already bill by the
hour).

I really suspect (and worry from an own-career perspective) that the first
thing to be automated will be the number-crunchers surrounding senior
management. I spend my time doing things like calculating the marginal effects
of extra pay on employee productivity, which is hard largely because most
companies have terrible data. Once companies start implementing systems that
can effectively and automatically track complex metrics like this, around 80%
of my role won't be needed any more, and instead of paying $250/hr for a guy
to whack out some R code, companies can get the same service wrapped up in
whatever future version of SAP they're using.

~~~
RangerScience
I heard a story once about how the introduction of power tools was protested
by the set builders of Hollywood (and probably Broadway) - they said, "now it
takes fewer people to build the same set! we'll lose jobs!"

The reality turned out that people built bigger sets on the same budget, and
people with smaller budgets could now build sets.

A large part of the job of programming is automating away the job you're
currently doing, so you don't have to do it again. This frees you up to do
more, newer things.

I suspect both with hold true for you. What you currently do will be wrapped
in an automated layer, and you'll do something similar on a higher layer
previously inaccessible.

~~~
ryankupyn
Yeah, that's pretty much what's going to happen. My employer just acquired a
rival that does exactly that, so now my entire division is gradually shifting
to build on their work and automate more and more.

The biggest change internally is what kind of grad degrees people get. 10-15
years ago everyone went for an MBA when they wanted to move up, now more
people are getting their Stats PhDs, then coming back and applying their
knowledge to problems that would have been the domain of B-Schoolers just a
few years ago.

------
losteverything
Another example of why a brand matters so so much. Brand managers all over
have to use this as an example

------
ebbv
What a crock. The whole bankruptcy was just a union busting maneuver to escape
the contracts they had signed. The company was deliberately run into the
ground to restructure and now it's making the executives rich while all the
workers have been tossed aside.

To hell with Hostess and all the people profiting off this upcoming "IPO".

~~~
Ataraxic
I mean if you engage in agreements with unions that are fundamentally
impossible for the company to meet, I wouldn't exactly call that union
busting. In fact from what I remember about this bankruptcy specifically, in
order to continue operations they absolutely had to negotiate a new contract
with all the unions. Every union but the bakers agreed. Because the bakers
walked, they had to file bankruptcy.

I feel like this is an example of the failure of unions. It also seems selfish
that given that if you know bankruptcy is coming, one union would bankrupt the
company when all the others were for it. If you hated the job that much, you
can leave. In the end, it didn't save jobs, it didn't protect their
livelihood, and I think it's quite possible that it delayed what is obvious
now: automation was inevitable and layoffs were necessary. Their workforce of
8000+ is now ~1200 and only now are the becoming profitable again.

~~~
ebbv
You can choose to believe that narrative, but I think that's what the Hostess
executives fed to the media. I believe they deliberately negotiated in bad
faith with the goal of declaring bankruptcy and restructuring.

 _Some_ layoffs may have been necessary, but given how much profit they are
making now I'm not sure I believe that all 6800 were. Plus, we aren't given
details about how were these layoffs distributed? Were they all at the labor
level or was anyone from corporate laid off? Did any executives take pay cuts?
Are they all getting bonuses now? How much do they stand to profit from the
upcoming public offering?

My point being; the media was fed a narrative about the union being
unreasonable and the bankruptcy and layoffs being "unavoidable" and they eat
it up uncritically, and then the public does too. I don't think it's that
simple.

Unions are human institutions and like any human institution they can have
issues, but they have served an important purpose in this country in creating
the middle class. It is no coincidence that over the last 40 years unions have
been systematically undermined, busted and halted everywhere and at the same
time middle class wages have stagnated, with benefits that could have been
expected at a middle class job in the 60s now being basically unheard of at a
middle class job today.

~~~
seibelj
What is your calculation for the proper amount of workers at the Twinkie
factory? Modern technology allowed 1200 to do the work of 8000. How many
workers would you mandate work at the Twinkie factory in your ideal vision of
the world?

~~~
ebbv
Wow the libertarians are really pushing the straw men tonight.

This is going to be my last response on this thread because I'm tired of
explaining reality to you.

Obviously my number would be the number that makes the most sense. You
obviously take the view they did that already, but my point (which I've made
all along) is that companies rarely cut into executive staffing, pay or
benefits the way they cut into labor. Labor tends to pay the price of keeping
the executive staff, pay and benefits as is even when times get tough.

Ok enough of this tedious discussion. Have a good night folks.

~~~
seibelj
Your comment is both ironic and hilarious but I'm not sure you have the
perspective to understand why. Thank you for "explaining reality" to me with
your "what makes the most sense" argument about why the successful turnaround
of Hostess is a "crock" that is ethically dubious and screwing the common man.
The bottom line is that in a capitalist society reducing costs is required to
stay competitive. The only way to artificially inflate employment is to
mandate it with regulations. I was curious what mandates you would have,
perhaps banning robots so that all baking had to be done by hand? Or if it's
not the raw employment numbers you object to, but rather the pay differential
between management and labor, how would you force a multiplier that is fairer
to without being gamed? I talk to people who argue views like your's regularly
and they collapse when logically analyzed. I am hoping you can explain it to
me better.

------
sctb
We updated the link from
[https://hardware.slashdot.org/story/16/07/10/1659250/hostess...](https://hardware.slashdot.org/story/16/07/10/1659250/hostess-
saves-twinkies-by-automating-fires-94-of-their-workforce?sdsrc=rel), which
points to this.

------
dragon_ninja
This is the future.

One way to avoid it would be to tax companies as a percentage of their net
income divided by the number of employees that exceed some salary. However,
it's not a great idea to stifle innovation and efficiency.

~~~
slyall
Tax is usually close to 30% of net income to start with and even those with
the best accountants usually pay a few percent.

So dividing their tax bill by the 10, 100, 1000 or whatever workers that
exceed some magic income level won't generate much income...

------
beedogs
Capitalism's race to the bottom continues unabated.

~~~
GauntletWizard
Communism's race to the bottom has already been won. Only, Capitalism is
racing to the bottom of 'time spent by humans doing unfun things', and
Communism's was 'human rights'

~~~
sevenless
It's not like those are the only alternatives.

We should try communism with modern IT infrastructure and AI. The big problem
with many command economies was the inability to collect and act on the data.
Call it a "just-in-time command economy" if you prefer.

~~~
api
Ultimately those systems will have to be run by people, and all the same
perverse incentives will apply.

Corporations become corrupt too, but there is more than one and you can start
new ones. In a command economy like you allude to there is only one
corporation and if it becomes corrupt there is no recourse.

~~~
brightball
That's the exact point that applies to federal government programs vs state.

------
abrown28
Fight for 15 will fix it

