Wonder Bread and the National Hockey League (NHL) are waiting to find what the future holds.
Hostess Brands, the commercial baker that makes Wonder Bread along with Twinkies and a dozen other familiar junk-food brands, has filed a partial reorganization plan with bankruptcy court. There are large gaps in the plan that would be expected to get further court scrutiny. Probably the new plan is just a placeholder, meant to show that the bankrupt company is making progress and has a hope of getting to a comprehensive plan that would allow it to emerge from bankruptcy next year. The plan calls for an immediate 8 percent wage cut and drastic cuts in health benefits. In return, the workers become debt-holders with a $100 million bond.
The NHL team owners voted to shut down before the beginning of the season. They hope to come to a new labor agreement that would allow the league to continue operating without the risk of large losses. Talks with the union broke off, but resumed a few days ago. No one seems very confident that the outline of a deal can be reached before early January, which would be the latest that a credible shortened season could get underway. If that doesn’t happen, the league will miss a year, but the league and union surely can come up with a plan in time for a regular start for next season.
In both stories, there are reasons to be skeptical. There are reasons the old plans came up short, and those are not being addressed. Time is working against Wonder Bread, as consumers move toward real food and more respectable food ingredients. Time is also working against the NHL, whose game action doesn’t look so pretty or profound on the large-format, high-definition displays that the U.S. TV audience is moving toward. Alas, the clock keeps ticking while you stop to come up with a new plan. Time spent in bankruptcy or lockout is time not available to try to align with changing consumer tastes. The accountants at Hostess Brands and the NHL are trying to fix the gaps in the business plans that failed in 2011. But a patched-up 2011 plan may still end up losing money in the shifting market realities of 2013 and 2014.