Hostess to close, cites nationwide worker strike
by AP News Now
November 16, 2012 09:05 AM | 1106 views | 5 5 comments | 4 4 recommendations | email to a friend | print
This Tuesday, Jan. 10, 2012, file photo, shows, Hostess Twinkies in a studio in New York. ( AP Photo/Mark Lennihan)
This Tuesday, Jan. 10, 2012, file photo, shows, Hostess Twinkies in a studio in New York. ( AP Photo/Mark Lennihan)
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Hostess, the maker of Twinkies and Wonder Bread, plans to go out of business, lay off its 18,500 workers and sell its snack cake and bread brands.

The Irving, Texas, company said a nationwide strike crippled its ability to make and deliver its products, which also include Ding Dongs, Ho Ho's and Home Pride bread.

Hostess suspended bakery operations at all its factories and said its stores will remain open for several days to sell already-baked products.

The company had warned employees that it would file a motion in U.S. Bankruptcy Court to unwind its business and sell assets if plant operations didn't return to normal levels by Thursday evening. The privately held company filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade.

"Many people have worked incredibly long and hard to keep this from happening, but now Hostess Brands has no other alternative than to begin the process of winding down and preparing for the sale of our iconic brands," CEO Gregory F. Rayburn said in a letter to employees posted on the company website.

He added 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.

Thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike last week after rejecting in September a contract offer that cut wages and benefits. Hostess said Friday the company is unprofitable "under its current cost structure, much of which is determined by union wages and pension costs."

A union representative did not immediately return a call from The Associated Press seeking comment on the company's announcement.

Hostess has said that production at about a dozen of the company's 33 plants has been seriously affected by the strike. Three plants were closed earlier this week.

Hostess had already reached a contract agreement with its largest union, the International Brotherhood of Teamsters.

The company, founded in 1930, was fighting battles beyond labor costs. Competition is increasing in the snack space and Americans are increasingly conscious about healthy eating. Hostess also makes Dolly Madison, Drake's and Nature's Pride snacks.



Copyright 2012 The Associated Press.

Comments
(5)
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Watcher...
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November 16, 2012
"Twinkies" and the other Hostess brand names will be bought by competitors and they will be manufactured in non-union facilities.
Gringo Bandito
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November 16, 2012
Wow. The thought of an 8% pay cut was so bad they would rather be unemployed. I guess they got their wish.
anonymous
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November 16, 2012
Unions have their way and management is fighting back. Notice how Mitt Romney had nothing to do with these 18,500 families losing their livelihood, but the fault lies on President Obama, his support of unions, his agitating on behalf of the unions, his lack of leadership on saving American jobs and the economy,

Obama loves this. It's what Alinsky envisioned before he died. Complete chaos, agitating the people, organizing the unions, creating an atmosphere of contempt for the bosses..all in order to re-structure the shape of things in favor of a less capitalistic, more communist outcome.

How's that all working out for you just before Christmas, Hostess employees? You ungrateful union bubbas.
Watcher...
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November 16, 2012
Great Post!
Watcher...
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November 16, 2012
18,500 jobs lost!

Thank God that Georgia and many other States are "Right to Work" States!
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