Tasty Baking Co. deserves a bailout because it’s important to Philadelphia and the company’s employees.
Imagine a world without Tastykake Butterscotch Krimpets. Get rid of the cream-filled chocolate cupcakes and those handheld apple pies; no glazed honey buns, Chocolate Kreamies or Peanut Butter Kandy Kakes, either.
Unfortunately, this horrible Tastykake-less nightmare may be a reality. Tasty Baking Co. has been walking on financial eggshells and risks defaulting if it can’t work out a deal with its creditors soon. On Jan. 5, the Philadelphia Inquirer reported Tasty’s debt at $100 million.
Luckily, I am not the only one horrified by this terrible news. Gov. Ed Rendell is determined to make sure Tasty can come up with the dough it needs to survive by orchestrating a bailout for Tasty.
He’s absolutely right to do so. Tasty is too important for Philadelphia to lose. Everyone, from government officials to potential investors to the average consumer, should ban together to keep Tasty alive.
“We are trying to find a way to keep Tastykake on its feet,” Rendell told the Inquirer in a Jan. 7 article. “It’s an important Pennsylvania company and a significant employer.”
Although Rendell’s term ends Jan. 18, he should still go ahead with the bailout plan. Gov.-elect Tom Corbett will be sworn in and have the power to undo any deal Rendell is able to work out; it’s a power he will likely use. If Corbett does so, it is up to us to persuade Corbett otherwise.
If Tasty goes under, a piece of Philadelphia’s culture will go with it. Tastykakes are staples of Philadelphian cuisine. It may not get the same respect as the soft pretzel or water ice, but that doesn’t make it any less important. If Pat’s or Geno’s was in trouble, we’d help them out, right?
There would be a physical loss if Tasty disappeared. In the Jan. 7 article the Inquirer reported Tasty employed 315 people at its factory in March, which means the company’s foreclosure would leave those same people unemployed.
A Tasty bailout would do more than just keep its delicious products on the shelves – it would keep 315 people at their jobs.
These aren’t high-paid investment bankers. These are blue-collar factory workers who would be thrown to the back of the unemployment line.
Some may get queasy at the mention of the word “bailout.” That’s because the word has been elevated to the status of vulgarity. It has become synonymous with corporate greed and excess. However, Tasty is different.
It isn’t a coast-to-coast corporation. Tasty’s products are only found locally; the products are made in one factory making it easier to monitor Tasty’s expenses to make sure no loans were being abused. The money couldn’t simply disappear into thin air like in some national bailouts.
Besides, logistics – not greed – has put Tasty in this predicament. Tastykake products have a shelf life of about two weeks, so exporting them to different parts of the country is nearly impossible without new factories. The company has looked into the possibility, but expansion hasn’t exactly been a piece of cake.
Efficiency is also a concern. Until last year, Tasty had been operating in its Nicetown factory, originally opened in 1922. The factory became outdated, but Tasty didn’t want to leave the Philadelphia area.
Eventually it relocated inside the city limits, spending a reported $78 million in the process. Tasty hoped for at least $13 million worth of returns on the investment this year, but is now expected to manage about $10 million.
Tasty was reliant on those few million dollars for its next loan payment. Without it, the baking company may require outside help. That’s where the state and Rendell’s bailout would come in.
For nearly a century, Tasty has provided us with delicious treats and has always remained loyal to the Delaware Valley sweet tooth above all else.
Tasty deserves its loyalty to be repaid and this is our opportunity to do it.
Zachary Scott can be reached at email@example.com.