Twinkie Maker Hostess Shutting Down

After a long battle with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) over proposed cuts to wages, Twinkie maker Hostess Brands announced this morning that it has filed a motion with the U.S. Bankruptcy Court seeking permission to close down its business and sell off its assets. In a word, the company is liquidating and moving to lay off 18,500 workers.

Bakery operations have been suspended at all plants. Delivery of Hostess products including Twinkies, Ding Dongs, Wonder Bread, and Nature's Pride bread will continue and Hostess Brands retail stores will remain open for several days to sell already baked products. The winding down means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes, and 570 bakery outlet stores throughout the United States.

Hostess is currently unprofitable and operating under Chapter 11 bankruptcy protection. The company had asked BCTGM to approve a new contract in which the workers would accept lower pay and benefits in exchange for a 25% ownership stake in the company, $100 million in reorganized company debt, and representation on the board of directors. Instead, 92% of BCTGM union members voted to call a nationwide strike against Hostess, forcing the company to suspend baking at three of its plants on Nov. 12. When management's request for employees to resume work was declined, the company says it had no option but to shut down.

"We deeply regret the necessity of today's decision," said Hostess CEO Gregory F. Rayburn in a statement, "but we do not have the financial resources to weather an extended nationwide strike. 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 its own press release, the union said: "The truth is that Hostess workers and their Union have absolutely no responsibility for the failure of this company. That responsibility rests squarely on the shoulders of the company's decision makers."


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  • Report this Comment On November 16, 2012, at 12:25 PM, Newt805 wrote:

    To me it sounds like the UNION and it's members have to share the responsibility of this failure. Times are tuff, to take a pay cut is nothing compared to unemployment and the headaches that will give you!! And why wouldn't you want 25% ownership in the company that's in chapter 11, to much work?? Come on people, you have a great product!! or had a great product....

  • Report this Comment On January 05, 2013, at 4:03 PM, mountainman0us wrote:

    Newt805, that is pure bull! It wasn't the unions alone. The CEO took something like a 300% pay increase, then he "retired". Took millions of dollars and ran like a coward. A yellow bellied coward. He bankrupted the company and not the Unions. He was wanting the Union workers to bankroll his pay increase and when they refused, he ran. The Union workers had taken their share of pay cuts, reduction in retirement payments, and other concessions. It was time for management to show their willingness to keep Wonder Bread afloat and they showed their true colors, didn't they?

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