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.
Years ago, when my spouse was in a union (running heavy equipment for an earthworks construction company), he was the only one who hadn't dropped out of that union. His boss was just waiting for him to slip up somehow so he could fire him. When my spouse called the office to inquire about one item on his paycheck, only needing clarification, not complaining, he was fired. The union did nothing to help him with grievance. After all those years of paying union dues, all he got was a kick in the pants and a "don't let the door hit you in the rear on the way out" from the union.
Unions are a blight on the land. The time for unions has come and gone. My dad ( a poor farmer on a small farm) used to say the unions would someday strangle the US economy. Well, well, well... looks like he was rather prophetic....
Now we will have to pay for another 18,000 unemployed simply because of thier short sighted greed.
I think if you strike and close a company - then you should not be entitled any unemployment assistance.
Way to go Teamsters. Thanks to you D---A---s, and your d---a-- members, over 18,500 more people will now join the unemployed in this country, while your crazy schemes for more money control of our government go unnoticed or purposely unreported by the media and your paid for government representatives in DC. You can be sure, you have already chased too many big money holders to go overseas for their investment dollars, so now, if Hostess is purchased, it will be by China, or some other Capital take over group who will end up owning all our country soon. There was a day when unions were needed, and they filled the bill, but like our elected officials in DC and throughout the US, once they realized the personal gains that could be made, the honest care and concern for the people who depended on them has went out the window. I remember as far back as in the early 70's how the Teamsters let our employees down when I was workiing for ITT continental baking (Wonder Bread) at the time. We wanted the same thing the employees had in a neighboring city 10 times our size, which was a 2 day weekend instead of Wednesdays and Sundays off. We were ignored totally. No union rep ever even answered a call from our local about a consideration or why. Many of us quit after that, and we all swore we woould never work under a Union corrupted by money from the employer again. Well, after these kinds of eppisodes over the years progressed, you started to scheme with our government officials to get more money and more power, and finally, you now own our US President, by his own admission. And soon, you will run this poverty headed country all together under your need for socialism. And the so-called majority seem to be willing to let it happen. So, 'Congratulations!' I guess. Hope you enjoy ruling over the nation of poor people we are destined to become, and a large part of that will be attributed to your 'Caring about the working man.'
Thank you President Obama and the stinking back stabbing unions 4 more years oh ya baby
God Bless All That Are Losing Jobs Over This. Once companys sign with Unions that is it the unions own the companys and management loses control of all.
No Profit-No Jobs. I wonder why unions don't understand this concept.
I reget that so many will be out of work, but I'll bet the big union bosses don't miss a paycheck.
Which is, by the way, larger than most management positions or CEOs.
Unions are making it so we continue to sell our country to foreign countries.
How much more made in China can we take?
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