Irving, TX – Hostess Brands Inc. says it’s going out of business after striking workers across the country crippled its ability to make its Twinkies, Ding Dongs and other snacks.
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The company had warned employees that it would file a motion with U.S. Bankruptcy Court Friday seeking permission to shutter its operations and sell its brands if plants hadn’t resumed normal operations by a Thursday evening deadline. The deadline passed without a deal.
The closing would mean the loss of about 18,500 jobs.
“I don’t know if they thought that was a bluff,” CEO Gregory Rayburn said on CNBC Friday. He said the financial impact of the strike makes it “too late” to save the company even if workers have a change of heart. That’s because the clients such as retailers decide to stop carrying products when supplies aren’t adequate.
Rayburn said he’s hopeful that the company will find buyers for its roster of about 30 brands, which include Ho Hos, Dolly Madison, Drake’s and Nature’s Pride snacks. The company books about $2.5 billion in sales a year.
Hostess, based in Irving, Texas, said its stores will remain open for several days to sell remaining products. Operations at its 33 factories were suspended Friday. The privately held company filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade.
The move comes after thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike last week after rejecting a contract offer that slashed wages and benefits in September. The bakers union represents about 30 percent of the company’s workforce.
Rayburn said the union’s leadership had misled members into believing there was a buyer in the wings who would rescue the company. He said the union hadn’t returned the company’s calls for the past month.
A union representative did not immediately return a call seeking comment.
Hostess had said earlier this week that production at about a dozen of its plants were seriously affected by the strike. Although many workers decided to cross picket lines, the company said it wasn’t enough to keep operations at normal levels. Three plants were closed earlier this week.
Hostess had already reached a contract agreement with its largest union, the International Brotherhood of Teamsters. The Teamsters had urged the bakery union this week to hold a secret ballot on whether to continue striking.
Hostess said the company is unprofitable under its current cost structure, in large part because of union wages and pension costs. Rayburn said in a statement on the company website that all employees will eventually lose their jobs, “some sooner than others.”
“Unfortunately, because we are in bankruptcy, there are severe limits on the assistance the (company) can offer you at this time,” Rayburn wrote.
Hostess, founded in 1930, was fighting battles beyond labor costs. Competition is increasing in the snack space and Americans are increasingly conscious about healthy eating.
Nicely done, you though you had it alllll figured out.. lets strike they said.. we will get better benefits that said… well, now your beloved company is kaput, and you are all out of a job, well done unions!
Thank you Mr. President – who are you going to blame now – not Bush anymore – now it’s Sandy – sandy who????
Another example of union force causing companies to go bankrupt. If obama did not bailout theunio
Another great American company going down the tubes because of those greedy unions.
Too bad for the unions that the American taxpayer isn’t going to bail out yet another union-killed company.
A perfect example of unions being so greedy as to drive a company, that’s been around since the 1930’s, out of business, the result of which is, 18,500 (or so) people, union members too boot, losing their jobs, benefits and all.
What a disgrace and tragedy!
The bigger issue is since they went on strike, they forfeited their jobs. They should not be entitled to Unemployment. If the states decide to honor and give them Unemployment, a suit should be filed in federal court against it.
You can’t walk away and then say pay me.
The nanny mayor should be quelling with q dizzying head. No more twinkies. LOL, No more jobs! How yo’all doing in the Bronx.
Better to stay on strike, and declare victory, than have a job.
Could never understand the mindset of the unions, and its membership, but then I only lasted one half a day as a union member, and told them all to go to hell, as they tried to tell me how many hours I could and could not work.
This can be viewed as good news since all they produced was junk food. Twinkies are a perfect example of what shouldn’t be eaten. Maybe Americans will eat less and thin down a little.
Unions are a huge drag on this country. They’e just little communist groups under a different banner.
At one time unions were wonderful organizations that did a tremendous job helping workers against unscrupulous companies. But they allowed their power to go to their heads and became bullies and treated even fair companies badly. As history has shown us time and again things will swing back and companies will end up with absolute power once more and workers will suffer.
who are the workers going to blame? the unions or the “greedy” bosses? until they don’t blame the right party nothing is going to change!
Can Chinese people bake? well thats what is in store, Chinese Twinkies with Dog Food to keep it fresh.hacho in the PRC
now that they have gone out of business can some other company buy the rights of the name and reopen with non union workers.
is this idea far fetched????
Thank you unions for causing a company to bankrupty and to cause 18,000 people to loose their jobs i hope this is what you wanted.
Efsher they can chopp a Hashgacha before they go out of business to allow us to be nehneh just once?
Another example of a union taking down a honest legit bussines.
Tofasta meruba lo tofasta.
Thank you elderly union shop stewards and the geriatric RAGING GRANNIES for ruining American businesses.
Wasn’t killed by the union. Remember, Hostess went belly-up in ’04 and management fought a takeover by Bimbo, the Mexican baking giant. So management said they could save the company, changed CEO a few times, raised their own wages and killed the firm. Now they are paying the bankruptcy guy $2 million.
They said the only way to save the firm was to stiff retirees the pensions the management had promised them. Fire the managers and bring in Mexican MBA who work for half.
Unions killed the goose that laid the golden twinkie.
Can someone more business savey then me, please clarify this …does this mean, all these “brands” under Hostess, like wonder bread, drakes, dolly madison, etc.. will be gone too? No more funny bones or devil dogs? And if someone buys the company & it’s assets, can’t they continue to make them?
It wasn’t cholov yisroel..no wonder (no pun intended) they went under??