Hostess Brands shuts down bakery operations

by Eric Schroeder
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IRVING, TEXAS — Less than 24 hours after its deadline for workers to end their strike passed without word of an end to the walkout, Hostess Brands Inc. today filed a motion with the U.S. Bankruptcy Court seeking permission to close its business and sell its assets, including its brands and facilities.

Hostess said it has suspended bakery operations at all plants, while delivery of products will continue and Hostess Brands retail stores will remain open for several days in order to sell already-baked products.
On Monday, Hostess Brands permanently closed three plants (St. Louis, Cincinnati and Seattle) as a result of the work stoppage, and on Wednesday the company announced it would be forced to liquidate if a sufficient number of employees did not return to work to restore normal operations by 5 p.m., E.S.T. on Thursday. The company determined last night that an insufficient number of employees had returned to work to enable the restoration of normal operations.

“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.”

Those assets include 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States, as well as numerous brands, including Hostess, Drakes, Dolly Madison, Twinkies, CupCakes, Ding Dongs, Ho Ho’s, Sno Balls, Donettes, Wonder, Nature’s Pride, Merita, Home Pride, Butternut and Beefsteak.

Hostess said its debtor-in-possession lenders have agreed to allow the company to continue to have access to the $75 million financing facility put in place at the start of the bankruptcy cases to fund the sale and wind down process, subject to U.S. Bankruptcy Court approval.

As part of the Nov. 16 filing Hostess said it has asked the U.S. Bankruptcy Court for authority to continue to pay employees whose services are required during the wind-down period.

As of this morning, the B.C.T.G.M. and The Teamsters had not issued a response to Hostess’ announcement.

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READER COMMENTS (4)

By big mike 12/1/2012 6:24:18 PM
if u get rid of the unions yes many people don't like unions but u will work for minimum wage with no health benefits and u can get terminated at any time with no explanation yes unions give u benefits decent wages and a decent pension when u retire i support my fellow bctgm members cuse i am a union member and damm proud of it

By big mike 11/22/2012 9:27:20 PM
its not the unios its the company with corporate greed the ceo of hostess gave himself a hefty raise not to long ago they owe millions of dollars to the union pension fund did he give a crap bout it no he did not u cant blame it on the union blame it on the ceos im a member of the bctgm

By Juana M. 11/16/2012 6:07:38 PM
It is a pitty these things happend specially for all the families that we won't have a job anymore. However, this might be one of the disadvantajes of being in a union...

By Mary Meyer 11/16/2012 11:38:10 AM
If enough companies would do this, maybe we'd get rid of those unions.