Twinkies maker Hostess going out of business
Nearly 18,500 workers will lose their jobs as the company succumbs to the crippling effects of a nationwide union strike.
Hostess Brands, the bankrupt maker of Twinkies and Wonder Bread, said it has sought court permission to go out of business after failing to get wage and benefit cuts from thousands of its striking bakery workers.
Hostess said a national strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union that began last week had crippled its ability to produce and deliver products at several facilities.
The liquidation of the company will mean that most of its 18,500 employees will lose their jobs, Hostess said on Friday.
The 82-year-old company said it took the decision to shut down after determining that not enough employees had returned to work by a deadline on Thursday.
The company, which filed for bankruptcy in January for the second time since 2004, said it had filed a motion with U.S. Bankruptcy Judge Robert Drain in White Plains, New York, for permission to shut down and sell assets.
The Irving, Texas, company has 565 distribution centers and 570 bakery outlet stores, as well as the 33 bakeries. Its brands include Wonder, Nature's Pride, Dolly Madison, Drake's, Butternut, Home Pride and Merita, but it is probably best known for Twinkies -- basically a cream-filled sponge cake.
"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Chief Executive Gregory Rayburn said in a statement.
"Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders," Rayburn added.
Union President Frank Hurt said on Thursday that the crisis at the company was the "result of nearly a decade of financial and operational mismanagement" and that management was trying to make union workers the scapegoats for a plan by Wall Street investors to sell Hostess.
Hostess said its debtor-in-possession lenders had agreed to allow the it to continue to have access to $75 million to fund the wind-down process.
"There's no way to soften the fact that this will hurt every Hostess Brands employee. All Hostess Brands employees will eventually lose their jobs - some sooner than others," Rayburn said in a letter to employees.
The company has canceled all orders in process with its suppliers and said any product in transit would be returned to the shipper.
In its filing with the court, the company said it would have incurred a loss of between $7.5 million and $9.5 million from November 9 to November 19 in lost sales and increased costs.
"These losses and other factors, including increased vendor payment terms contraction, have resulted in a significant weakening of the debtors' cash position and, if continued, would soon result in the debtors completely running out of cash," it said.
Hostess had already reached agreement on pay and benefit cuts with the International Brotherhood of Teamsters, its largest union.
Typical upper class 1% mentality. As long as the lower and middle class are taxed into extinction, everything is fine, but effect the chance at someone getting their $2 million bonus so they can buy their spoiled kid a sport car and it's time to cut back employees,cut pay, and cut benefits for the employees who do all the work.
The Twinkle is going no where. This is a way for the top executives to still get their golden parachutes, the rights for the twinkie, ding dongs and other hostes products will be absorbed by other companies.
The company has defaulted on its pension payments and health care payments for years. They have gotten concessions from its employees for years also. The bakeries will reopen after the current contracts with the unions expire. The top management will be working for the companies that take it over. they will reopen as non union with no benifits and low wages. Of course that has been the american way for decades now.. the only ones that will be hurt are the union and the low and middle management employees that were not high enough on the totem pole to get a planned job with the new company. The cost of production will go way down. the cost of the twinkie will stay the same. the consumer will still be foolish enough to not see what's happening and pay for that same price twinkie and bash the union worker. I for one will eat healthy and not have one.
I'm wondering when the last time Hostess re-tooled their plants? Could it be possible that they just simply ran the company into the ground using it as a cash cow and now it isn't worth saving because other businesses have modernized and taken advantage of productivity gains created by new technology that Hostess doesn't want to or cannot make?
GO ONLINE SO UNIONS WONT HAVE A SAY REHIRE W/OUT UNION OR TELL THEM WHO ARE UNION TO FIND A UNION JOB WATCH HOW FAST THAT UNION GOES BROKE WHEN NOBODY WANT TO PAY THE DUES FOR A CLUB WHO LOST YOU UR CARRIER
GO TO ONLINE AND ONLY HIRE NON UNION
F*&%K THE UNIONS
Go non-union Hostess!! There are lots and lots of people who would be happy and grateful for a good paying job in an American institution like hostess. Thank you, greedy union, for screwing another workforce and American institution! Off overseas goes another resource...
Think America!!! Keep the jobs and our products home!!!
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The Fed may start tapering in just a few months. Here are a few of the likely winners and losers.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.