Bye Bye Twinkies, Ho-Hos, Ding Dongs and Wonder bread !!!!
Hostess Brands Inc. said Friday it will close all of its plants, leading to the loss of hundreds of jobs in Indiana and thousands more nationwide.
The Irving, Texas-based maker of Twinkies, Ho-Hos, Ding Dongs and Wonder bread said in a prepared statement it will file for liquidation because an “insufficient number” of striking employees returned to work. The decision will mean the firing of 18,500 workers, including nearly 300 in Indianapolis.
Indiana is home to two Hostess plants—one in Indianapolis and one in Columbus—with outlet stores and distribution centers in 19 other cities.
“Companies in bankruptcy don’t have any margin for error,” CEO Gregory F. Rayburn said Friday. “We just didn’t have enough workers crossing the picket line.”
The 82-year-old maker of Hostess Cupcake's, Ding Dongs and Ho Hos was undone by the strike after changes in American diets led to years of declining sales while ingredient costs and labor expenses climbed. The decision to liquidate capped a week long standoff between the company, once the largest U.S. wholesale baker, and a union that called its proposed labor contract “horrendous.”
Rayburn said Hostess will dismiss most of its 18,500 employees and focus on selling assets. Shipments of bread, snack cakes and other products will continue until supplies run out, he said. While Hostess has fielded interest in pieces of the business, its labor contracts and pension obligations have deterred any bids for the whole company, he said.
“Hopefully, someone will buy the brands, and some of the brands can live on, but that’s a pretty small consolation for people who are out of work,” Rayburn said. The company’s brand names include Dolly Madison, Drake’s, Merita and Butternut.
Flowers Foods Inc., the Thomasville, Ga.-based baker of Nature’s Own bread and Tastykake snacks, may be interested in buying some Hostess assets, William Chappell, an analyst for SunTrust Robinson Humphrey, wrote Friday.
“This is an unfortunate situation and we are very sad for all those impacted,” Keith Hancock, a spokesman for Flowers Foods, said in an e-mailed statement. “We are staying focused on making sure our consumers and customers have the baked foods they need –- and on serving the market.”
The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents about 5,000 Hostess workers, went on strike Nov. 9 after a bankruptcy judge in White Plains, N.Y., imposed contract concessions opposed by 92 percent of the union’s members.
“The crisis facing Hostess Brands is the result of nearly a decade of financial and operational mismanagement that resulted in two bankruptcies, mountains of debt, declining sales and lost market share,” BCTGM International President Frank Hurt stated in a Thursday message on the union’s website. “The Wall Street investors who took over the company after the last bankruptcy attempted to resolve the mess by attacking the company’s most valuable asset: its workers.”
The BCTGM union represents about half of Hostess’ employees in Indiana. A May letter to the Indiana Department of Workforce Development said the company would lay off 856 Hoosiers if the company ceased operations.
Union members walked out Nov. 9 over proposed labor contracts with steep cuts, including an 8-percent wage reduction. Hostess told the union on Wednesday that members had until 5 p.m. Thursday to get back to work or else the company would liquidate.
The BCTGM unions’s 436 members who work at Hostess’ Indianapolis and Columbus plants joined in nationwide pickets.
The company employs 288 in Indianapolis, 212 of them BCTGM members.
Corporate management has pinned the responsibility for the company’s financial woes on the union’s unwillingness to concede wages the company says it cannot afford.
Hostess closed three of its 36 plants permanently Nov. 12, blaming the strike. Hostess said it determined Thursday night that not enough employees had returned to work to restore normal operations. The wind-down will close the remaining 33 bakeries and 565 distribution centers, Hostess said.
Rayburn said this week the company would seek authorization to shut down entirely on Nov. 20. It will ask the judge to hold a liquidation hearing Nov. 19, he said.
Hostess, based in Irving, Texas, filed under Chapter 11 for a second time in January, listing assets of $982 million against liabilities totaling $1.43 billion.
Rayburn, who previously helped to guide companies including Syntax-Brillian Corp., Indianapolis Downs LLC and Sunterra Corp. through bankruptcy, said Thursday that Hostess lacked the financial strength and manpower to sustain operations during a strike.
“When you get to a certain point, customers are going to say, ‘Hey, you know, I’ve been as supportive as I can be, but I can’t be out of stock,” Rayburn said.
Some workers will be retained to clean plants and mothball equipment, Hostess said.
Officials at the International Brotherhood of Teamsters, which represents Hostess’s drivers, were “incredibly disappointed” and “angry” about the shutdown, Rayburn said. The Teamsters had urged the bakers’ union to have members decide by secret ballot whether to continue the strike.
Hostess drivers represented by the Teamsters ratified a new contract with 8 percent in wage concessions and 17 percent in benefit reductions.
Teamsters officials in Washington didn’t immediately return a voice-mail message seeking comment on the liquidation.
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2007 Yukon, 1981 CJ7 Laredo, 2002 Honda CRV, 1955 Thunderbird, 1952 Pontiac Sedan Delivery, 1952 Ford 8N, 1958 Airstream, 1959 Glasspar 16' Avalon, Cabin in the Woods........what will I work on next
"“What’s happening with Hostess Brands is a microcosm of what’s wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor,” Trumka said in a public statement. “Crony capitalism and consistently poor management drove Hostess into the ground, but its workers are paying the price.”
I'm not sure if this is just passing the blame or what? I think they are all Cronies! This Trumka guy is a millionaire off the dues paying workers and I would have to believe if Hostess goes under folks on both sides of the isle loose. This becomes a another major embarrassing blow to the union. The whole thing has corporate and Union greed written all over it just like our medical system and "We the People" take it in the shorts.
So, we move on again and again until we run out of addresses.............. Oh, I forgot some of us do that in our coaches anyway......
These comments followed the above referenced story. I am not affiliated with these events. Dean
The other side of the storyexhostess bakerNovember 16, 2012 12:32 PM
I "was" a non-union employee at Hostess Brands until this happened. The BCTGM and the striking workers are only telling the media one side of the situation so here is some of the other... Yes the company stopped paying into the MEP (multi employer pension) fund last fall, but since I've been in the workforce, going on 3 decades, I have rarely seen any company even offer a pension fund option. Usually it's just a 401k. Hostess offered the 401k to employees but it would not start for a couple years. These people expected the company to totally bankroll their "retirement". Many would retire after reaching the criteria then move along and work elsewhere. Yes the company was instituting an 8% 1st year pay cut, but everyone was getting the cut. I was not happy about it so I began looking for another job instead of sabotaging the one I had without having another to fall back on. These idiots will tell you they would rather make zero than $14/hr, which would have been the wages with the cut. Yes the company increased insurance costs, but the union doesn''t tell you that the employees contribution is in line with all other employers these days. Previously, the union workers only had to pay a few dollars a week for coverage which was a great deal for them but times have changed and they were lucky to have had it at that cost for so long. Most of the employees were lazy and entitled. They would sit in the break room and get paid if their machine was down for any reason. The sanitation crew would sit outside all day long preaching about how the company is stupid and failing without realizing that they have a hand in it by sitting there not doing their jobs and collecting pay. This was a set up job by the International Union from the word go. At the local information meetings prior to the strike, the International rep flatly stated that the strike purpose was to cause liquidation. They did not want any demands met because they wanted the company to go under. They sold this to the highly uneducated workforce by claiming a buyer was waiting. What buyer would want to buy the unions outrageous demands and have to deal with a militant workforce that would rather force a company under than work for more than fair wages/benefits? None I tell you. Someone will buy the branding, someone may even buy some of the facilities, but do not think that a company will want this workforce. These fools were suckered. The ones who weren't suckered were threatened and intimidated by union officials if they support their agenda. These people instead of peacefully exercising their right to strike, instead committed violence and threatened violence of the peple who were showing up to work. What kind of person would bring their small children to a picketline and have them stand in the entrance trying to prevent a tractor trailer from entering? Are these the kind of employees anyone would want? Nope. Soon these people will regret their actions, if they haven't already. Most openly spoke about collecting 99 weeks of unemployment and going on goverment subsidies instead of working a job. By the way, all of those who did not cross in my state will be denied unemployment because they refused work. Why would the union do this to it's employees? Well it wanted to set a precedent to other companies not to expect concessions during negotiations. They sacraficed 18,000+ jobs at Hostess for this. The union did not even go to the bargaining table, instead it agreed to accept the negotiations of the Teamsters in the matter. The BCTGM then would not even return phone calls from the company to even discuss the situation. The plan was in place and the sold it to the mostly G.E.D. educated workforce. Call me a company man or whatever else you like, but the facts are the facts. Hostess management in thepast screwed things up but this was the last chance to try and pull itself together. The BCTGM just had other ideas. I will survive and move along. I have a college degree and a work record of performing my job even if I was unhappy about my wages/benefits. I guess this was just a thinning of the herd because alot of these fools who already live paycheck to paycheck will lose what little they have now and expect the rest of our taxes to support their lazy dumba$$es. The company should have asked Judge Drain to void the contract and then terminate the employees who did not return. The employees who were working (new hires and temps)
1993 Newell 45'#316, 1976 Trans Am 455, 1967 GTO, 1953 Chevrolet 3105 (panel truck),1952 Chevrolet 3600,1969 Airstream Overlander. Always fixing something!
[h=1]Bankruptcy judge approves Hostess liquidation[/h]
It's official. Twinkies are toast, at least as far as being a Hostess product is concerned.
Hostess Brands Inc on Wednesday won permission from a U.S. bankruptcy judge to begin shutting down, and expressed optimism it will find new homes for many of its iconic brands, which include Twinkies, Drake's cakes and Wonder Bread.
U.S. Bankruptcy Judge Robert Drain in White Plains, N.Y., authorized current management, led by restructuring specialist Gregory Rayburn, to immediately begin efforts to wind down the 82-year-old company, a process expected to take one year.
"It appears clear to me that the debtors have taken the right course in seeking to implement the wind-down plan as promptly as possible," Drain said near the end of a four-hour hearing.
The judge authorized Hostess to begin the liquidation process one day after his last-ditch mediation effort between the Irving, Texas-based company and its striking bakers' union broke down.
Hostess CEO Gregory Rayburn testified at a bankruptcy hearing Wednesday that he will have to terminate 15,000 employees immediately. Most of the remaining 3,200 workers are expected to be let go within four months.
"This is a tragedy, and we're well aware of it," Heather Lennox, a lawyer for Hostess, told the judge. "We are trying to be as sensitive as we can possibly be under the circumstances to the human cost of this."
The union, the Bakery, Confectionery, Tobacco and Grain Millers Union, has complained it should not be forced into new wage and benefit cuts, on top of earlier give-backs, while top executives rewarded themselves with higher pay, and that it was "well aware" of the potential consequences of that stance.
The union said in a court filing that its sole objective was to leave Hostess with "a real, rather than an illusory or theoretical, likelihood of establishing a stable business with secure jobs."
Union president Frank Hurt was not immediately available for comment.
"This is truly a sad day for thousands of families affected by the closing of this company," said Teamsters General Secretary-Treasurer Ken Hall in a statement. "I want to assure our members that despite this outcome, they do not stand alone and their union will continue to work on their behalf to help them find new employment."
About 6,700 Hostess workers are members of Teamsters.