Hostess Brands, Maker of Twinkies and Ding Dongs, Going Out of Business, Blames Striking Union Workers

Hostess Twinkies Box Small Hostess Brands, Maker of Twinkies and Ding Dongs, Going Out of Business, Blames Striking Union Workers

Hostess Brands, Maker of Twinkies and Devil Dogs, Going Out of Business, Blames Striking Union Workers (Photo credit: Wikipedia)

Curtain call for Hostess, the maker of Twinkies.  The company, that also makes iconic baked goods such as Wonder Bread and Devil Dogs, said it is asking a federal bankruptcy court for permission to cease operations, blaming its problems on a strike by bakers protesting a new contract. Here’s an excerpt from its press release:

The Board of Directors authorized the wind down of Hostess Brands to preserve and maximize the value of the estate after one of the Company’s largest unions, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), initiated a nationwide strike that crippled the Company’s ability to produce and deliver products at multiple facilities.

On Nov. 12, Hostess Brands permanently closed three plants as a result of the work stoppage.  On Nov. 14, the Company announced it would be forced to liquidate if sufficient employees did not return to work to restore normal operations by 5 p.m., EST p.m., Nov. 15.  The Company determined on the night of Nov. 15 that an insufficient number of employees had returned to work to enable the restoration of normal operations.

The BCTGM in September rejected a last, best and final offer from Hostess Brands designed to lower costs so that the Company could attract new financing and emerge from Chapter 11.  Hostess Brands then received Court authority on Oct. 3 to unilaterally impose changes to the BCTGM’s collective bargaining agreements.

Hostess Brands is unprofitable under its current cost structure, much of which is determined by union wages and pension costs. The offer to the BCTGM included wage, benefit and work rule concessions but also gave Hostess Brands’ 12 unions a 25 percent ownership stake in the company, representation on its Board of Directors and $100 million in reorganized Hostess Brands’ debt.

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” said Gregory F. Rayburn, chief executive officer.  “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.”

In addition to dozens of baking and distribution facilities around the country, Hostess Brands will sell its popular brands, including Hostess®, Drakes® and Dolly Madison®, which make iconic cake products such as Twinkies®, CupCakes, Ding Dongs®, Ho Ho’s®, Sno Balls® and Donettes®.  Bread brands to be sold include Wonder®, Nature’s Pride ®, Merita®, Home Pride®, Butternut®, and Beefsteak®, among others.

 Hostess Brands, Maker of Twinkies and Ding Dongs, Going Out of Business, Blames Striking Union Workers
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 Hostess Brands, Maker of Twinkies and Ding Dongs, Going Out of Business, Blames Striking Union Workers
Janet Shan is a freelance journalist and managing editor of the Hinterland Gazette, who is working on her first novel, a mystery based in the hills on Montego Bay.
  • http://www.facebook.com/SHARK1152 Mark Taubert

    you must be one of the idiot twinkie eaters the company make a third of the bread in the country and it is going out of business the week before thanksgiving the biggest bread week of the year. shake the ding dongs and twinkies out of your brain and see the big picture.if you want bread next week coast to coast better stock up now