Stuck in a Duh-pression
When word got out last month that we had been in a recession since December 2007, I could not help but think, “Hey, what have you guys been smokin’ for the last 12 months?”
Yes, for almost a year, the nation’s economists were unable to utter the R-word without qualifying it. The economy was soft, and then we had zero growth. (Nope. Not there yet.)
Forget spiraling foreclosures. Don’t worry about those toxic derivatives. (Just don’t eat them.) Who cares about unemployment? (Job? What job? Hey, that’s my job!)
Still no word of recession.
Then, the stock market began to tumble, every financial institution became too big to fail (Uh, sorry Lehman, we goofed!), the auto industry started screaming like stuck pigs (Private jet? What jet? That’s his jet!) and Baby Boomers began having night sweats as their dreams of early retirement flushed down the toilet. (Light a match, dude. That 401-K stinks.)
Then they got nervous. They stuttered. Ruh-. Ruh-ruh-ruh. Ruh-ruh-ruh-ruh-cession. (There, I said it. Are you happy now?)
They should have just done the Stink Test. (Hmm, it looks like it. Smells like it. Even tastes like it. Good thing I didn’t step in it.)
Yes, you can all relax now. We’re officially in a recession (sponsored by your local Chevy dealer). The only remaining issue is how deep it is. I’ll give you a hint. When you spend four months wondering if we hit a bottom yet, it’s pretty dang deep.
Last month, however, the baking industry didn’t seem to get the memo that the global economy was in the dumps. How else can you explain the flurry of activity with Lance buying Archway for pennies (actually $30 million) and Kellogg’s gobbling up Mother’s? (Ours is not to reason why.) Interstate Bakeries Corp. got the green light from the courts to exit that Chapter 11 bankruptcy. (Dissolve the company? Hmm, might be tough finding another job.)
Then Grupo Bimbo, one of the world’s largest baking companies based in Mexico City, announced it had to sign an agreement to purchase the U.S. fresh-baked goods business from Toronto-based George Weston Ltd.
Daniel Servitje, Bimbo’s chief executive, called the pending acquisition the most important one in the company’s history, and he wasn’t exaggerating one bit.
With Weston’s bakery business in the United States, Bimbo will have national reach, or something very close to it, and there are tremendous potential synergies among all of the brands.
Certainly, it’s no secret that Bimbo has wanted to be a national player in the United States. Previously, it has been part of a group to buy IBC. Last year, the company explored a possible bid for producer of Wonder bread, but thought better of it. (Uh, on second thought, no.) On the face of it, acquiring Weston’s business is a much better fit. (I do, I do, I do.)
Consummating the $2.38 billion deal may take a little time, but the potential upside for Bimbo is huge. As for Weston, who am I to speculate on what it will do next since the decision will ultimately be the president’s choice? (Park it in a money market fund? No.)
Sure, these are not ordinary times, in more ways than one. For too many people, they’re downright strange. (Senate seat…going once, twice…) For some, the future looks bleak. (Yeah, what happens in Vegas, stays in Vegas, but they didn’t tell me I’d be staying here for the next 33 years.)
Now the geniuses are wondering if the economy may fall into a Great Recession or even worse, but they’re just not able to say it. Not yet.
Duh. Duh-duh. Duh-duh-duh.
Dan Malovany, editor