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.
There are plenty of people out of work, who will gladly take thoses jobs.bakers included.
Hostess can start hiring them today.
What the hell! Come on people let just come to a happy medium and get this resolved. We dont need more americans unemployed. Fudge we cant live without Hostess. I hate Tasty Cake. Come on! This sucks. I love this all american classic snack. I am still pist that they took the choco bliss off the market. But now shutting down shop. Great punish us all. More unempolyment less good stuff on the shelves. Hey Hostess why dont you just tell Tasty Cake to buy your facility. Sure let the crappy company monopolize the market. Dont even get me started on Little Debbies. Really Hostess your gonna close your doors? Un Efffen Believable! What about the commited clients who only buy Hostess? Did you give it any thought? How about the thousands of people that will be without jobs? So after so many years you guys throw in the towel. Nice not enough lobster and filet mignons in the world for you fat cats? What about the Union how much is enough? Really Union People come back to earth **** has changed! Get with program. This eye for an eyes **** has to stop. ALL for greed. Im so disgusted!!!! My mom grew up with Hostess, I grew up with Hostess and my son too. Great another great tale for me to tell my grandkids. Hostess really you are an American Icon. Dont play hardball lets be rational! Continue the legacy. Not everybody needs to make a million dollars and jobs need to be jobs not a clock in clock out session of doing the bare minimal to get by on production.
UNIONS WAKE UP!!!! You are quickly becoming obsolete!!! UNIONS KISS MY ****! RICH EXECUTIVE FROM HOSTESS CAN KISS MY **** TOO!
And why wouldn't these Union workers rather take a pay cut to continue getting a paycheck???
Because they know they can still get a paycheck from the Dems, courtesy of King Hussein Obama!
This is an obvious case of management union busting. Better to ruin your company and destroy your income and those of your employees than shoare in the wealth that you created all by yourself. Why can't you run the company all by yourself without any workers if you are so talented? The courts should seize the assets and give them to the creditors so the CEO and President of the company cannot profit from this. 120 years of worker's progress down the drain.
Underfunding public education works: Look at all the anti-union rhetoric from these members of the 99% who do not see this systematic erosion of the middle class. It's called ECONOMIC SLAVERY.
The ultimate result is that Hostess is no more and the union broke them.
Great job unions, you did such a good job that your members no longer have jobs.
Of course there was mismanagement, but what's the bottom line?
The bottom line is that Hostess is no more.
All those union jobs are no more.
Will we miss twinkies? Probably not. I mean, it's not healthy.
But what about Ho-Ho's and Ding-Dong's? They were good.
Ironically, Union President Frank Hurt blames the crisis on "financial and operational mismanagement". The teamsters reached an agreement, but his Bakery Workers Union has not. I guess he meant to say that the Bakery Workers have killed their employer by the financial and operational mismanagement of the union.
I'm just wondering if any of the 2459 comments mention the decade or more of insane management behavior that brought Hostess to this condition.
Blaming the "union" for management foolishness is just the kind of ill considered thinking that has Wal-Mart employees working for minimum wage, while pricing on same items at Wal-Mart stays the same as unionized Grocers who pay considerably better, and have real benefits for their employees.
There isn't enough information in the article to judge either sides position, maybe some of us should withhold our "wisdom" until there is something to judge. I would think that, just possibly, the Union members have a clearer picture of conditions than the long list of anti-labor commenter's above.
but how impressive it to see the union stand-fast -
I can just hear them saying -
"it's not about the 18,500 people who are loosing their jobs -
YES - that is a real shame - it's about the principle of standing strong"
when are the "union workers" going to figure out that the unions only care about themselves -
and don't give a rat's **** about the workers - if you have any doubt - here is your proof!
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