Nearly 18,500 workers will lose their jobs as the company succumbs to the crippling effects of a nationwide union strike.
By MSNMoney partner 4 hours ago By Tanya Agrawal, Reuters
Hostess Brands, the bankrupt maker of Twinkies and Wonder Bread, said it has sought court permission to go out of business after failing to get wage and benefit cuts from thousands of its striking bakery workers.
Hostess said a national strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union that began last week had crippled its ability to produce and deliver products at several facilities.
The liquidation of the company will mean that most of its 18,500 employees will lose their jobs, Hostess said on Friday.
The 82-year-old company said it took the decision to shut down after determining that not enough employees had returned to work by a deadline on Thursday.
The company, which filed for bankruptcy in January for the second time since 2004, said it had filed a motion with U.S. Bankruptcy Judge Robert Drain in White Plains, New York, for permission to shut down and sell assets.
The Irving, Texas, company has 565 distribution centers and 570 bakery outlet stores, as well as the 33 bakeries. Its brands include Wonder, Nature's Pride, Dolly Madison, Drake's, Butternut, Home Pride and Merita, but it is probably best known for Twinkies -- basically a cream-filled sponge cake.
"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Chief Executive Gregory Rayburn said in a statement.
"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," Rayburn added.
Union President Frank Hurt said on Thursday that the crisis at the company was the "result of nearly a decade of financial and operational mismanagement" and that management was trying to make union workers the scapegoats for a plan by Wall Street investors to sell Hostess.
Hostess said its debtor-in-possession lenders had agreed to allow the it to continue to have access to $75 million to fund the wind-down process.
"There's no way to soften the fact that this will hurt every Hostess Brands employee. All Hostess Brands employees will eventually lose their jobs - some sooner than others," Rayburn said in a letter to employees.
The company has canceled all orders in process with its suppliers and said any product in transit would be returned to the shipper.
In its filing with the court, the company said it would have incurred a loss of between $7.5 million and $9.5 million from November 9 to November 19 in lost sales and increased costs.
"These losses and other factors, including increased vendor payment terms contraction, have resulted in a significant weakening of the debtors' cash position and, if continued, would soon result in the debtors completely running out of cash," it said.
Hostess had already reached agreement on pay and benefit cuts with the International Brotherhood of Teamsters, its largest union.
I've been a Hostess fan as far back as I can remember. It's unthinkable that I will never see another Twinkies or other Hostess product ever again. For a goodie freak like me, it's enough to make a poor guy depressed.
Last night, I went to QFC and bought $32 worth of Hostess goodies. I would have bought everything in sight if I had wanted to spend more mnoney! Now I'm on a search for any store that has Hostess, so be on notice...I have dibs on any Hostess products in my area!
Just a sign of what a great jobs unions are doing for the rank and file. Pat yourselves on the back union big wigs... you hurt more Americans. You know those stubborn pricks aren't losing their jobs or any income.
candio: Just a sign of what a great jobs unions are doing for the rank and file. Pat yourselves on the back union big wigs... you hurt more Americans. You know those stubborn pricks aren't losing their jobs or any income.
Actually they are losing income, union dues. I guess those workers didn't get the memo. It's a tough job market out there.
HarleyquinnBetwixt the stix, Illinois USA1,707 posts
Bankruptcy & yet the CEO & upper management gave themselves huge raises in '10 or '11! The CEO alone went from $750,000/yr to way over 1mill/yr. Just more corporate greed, that's what killing this country, not the little man wanting a decent wage & pension. It's not like they're asking for something TOTALLY unreasonable like what the CEO & upper management have!
Don't worry they'll sell it off to another corp & pocket millions more & the laborers will get screwed out of their jobs & possibly their pensions.
But there will probably still be hostess products on the market.
This is from another board: "We have a Hostess bakery in the next town, (Biddeford, ME). Local news coverage is probably more extensive than what you read in national news reports and there's some details you're probably not getting.
For instance, workers were making the exact same wage as they did in 1999! Management has been gettin all sorts of concessions from the baker's union ever since--the union just has reached the breaking point. The company has bluffed about going Ch. 7 several times in the past, but never followed through." "What no one is mentioning is that Hostess was already in Ch. 11 bankruptcy."
It is nothing but a strategy to break the union. Hostess will be back with nearly the same leadership and they will hire back half of their employees for $7.50 an hour. In the meantime, there is still 100 years worth of Twinkees and cupcakes sitting in a warehouse somewhere. They are not biodegradable, after all.
It's sad that so many people will be out of work, there's no doubt that it's going to hurt a lot of families.
I can't remember ever having a Twinkie, never been into that sugary packaged stuff that keeps for a lifetime. I did buy a loaf of |Wonder bread once, tasted horrible. I made a couple sandwiches and headed off to work for 5 weeks. When I came back, that loaf of "bread" was on the counter, and in the same condition as it was when I left. Kinda creepy, if mould or bacteria won't grow on it, how good can it be for the human body?
KeeperofCupcakes: Nooooooo! No more twinkies! Oh well,there are generics but,wouldn't be the same though.
I'd suggest staying away from all of it, eat healthy instead. If you like sweets, make them at home where you know what's going into them.
HuggerMan4U: I've been a Hostess fan as far back as I can remember. It's unthinkable that I will never see another Twinkies or other Hostess product ever again. For a goodie freak like me, it's enough to make a poor guy depressed.
Last night, I went to QFC and bought $32 worth of Hostess goodies. I would have bought everything in sight if I had wanted to spend more mnoney! Now I'm on a search for any store that has Hostess, so be on notice...I have dibs on any Hostess products in my area!
Awwwwww Huggie, I heard that there's a good chance another company will buy Hostess and make the same items but those little cakes with cream inside probably won't be called Twinkies....although they might buy the name too. Huggie, please Don't eat all that sugar in a short amount of time.
montemonte: Awwwwww Huggie, I heard that there's a good chance another company will buy Hostess and make the same items but those little cakes with cream inside probably won't be called Twinkies....although they might buy the name too. Huggie, please Don't eat all that sugar in a short amount of time.
Thank you for your concern, Monte. Much appreciated.
I was just in shock when I heard about Hostess giving up after being a household name for so long. Well, one way to look at it, Monte, is no more Twinkies means a better diet!
HuggerMan4U: Twinkies maker Hostess going out of business
Nearly 18,500 workers will lose their jobs as the company succumbs to the crippling effects of a nationwide union strike.
By MSNMoney partner 4 hours ago By Tanya Agrawal, Reuters
Hostess Brands, the bankrupt maker of Twinkies and Wonder Bread, said it has sought court permission to go out of business after failing to get wage and benefit cuts from thousands of its striking bakery workers.
Hostess said a national strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union that began last week had crippled its ability to produce and deliver products at several facilities.
The liquidation of the company will mean that most of its 18,500 employees will lose their jobs, Hostess said on Friday.
The 82-year-old company said it took the decision to shut down after determining that not enough employees had returned to work by a deadline on Thursday.
The company, which filed for bankruptcy in January for the second time since 2004, said it had filed a motion with U.S. Bankruptcy Judge Robert Drain in White Plains, New York, for permission to shut down and sell assets.
The Irving, Texas, company has 565 distribution centers and 570 bakery outlet stores, as well as the 33 bakeries. Its brands include Wonder, Nature's Pride, Dolly Madison, Drake's, Butternut, Home Pride and Merita, but it is probably best known for Twinkies -- basically a cream-filled sponge cake.
"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Chief Executive Gregory Rayburn said in a statement.
"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," Rayburn added.
Union President Frank Hurt said on Thursday that the crisis at the company was the "result of nearly a decade of financial and operational mismanagement" and that management was trying to make union workers the scapegoats for a plan by Wall Street investors to sell Hostess.
Hostess said its debtor-in-possession lenders had agreed to allow the it to continue to have access to $75 million to fund the wind-down process.
"There's no way to soften the fact that this will hurt every Hostess Brands employee. All Hostess Brands employees will eventually lose their jobs - some sooner than others," Rayburn said in a letter to employees.
The company has canceled all orders in process with its suppliers and said any product in transit would be returned to the shipper.
In its filing with the court, the company said it would have incurred a loss of between $7.5 million and $9.5 million from November 9 to November 19 in lost sales and increased costs.
"These losses and other factors, including increased vendor payment terms contraction, have resulted in a significant weakening of the debtors' cash position and, if continued, would soon result in the debtors completely running out of cash," it said.
Hostess had already reached agreement on pay and benefit cuts with the International Brotherhood of Teamsters, its largest union.
While listening to my guys CB during our trip to Tennessee I overheard someone say that it was all Obama's fault.So heare we go again.
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Nearly 18,500 workers will lose their jobs as the company succumbs to the crippling effects of a nationwide union strike.
By MSNMoney partner 4 hours ago
By Tanya Agrawal, Reuters
Hostess Brands, the bankrupt maker of Twinkies and Wonder Bread, said it has sought court permission to go out of business after failing to get wage and benefit cuts from thousands of its striking bakery workers.
Hostess said a national strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union that began last week had crippled its ability to produce and deliver products at several facilities.
The liquidation of the company will mean that most of its 18,500 employees will lose their jobs, Hostess said on Friday.
The 82-year-old company said it took the decision to shut down after determining that not enough employees had returned to work by a deadline on Thursday.
The company, which filed for bankruptcy in January for the second time since 2004, said it had filed a motion with U.S. Bankruptcy Judge Robert Drain in White Plains, New York, for permission to shut down and sell assets.
The Irving, Texas, company has 565 distribution centers and 570 bakery outlet stores, as well as the 33 bakeries. Its brands include Wonder, Nature's Pride, Dolly Madison, Drake's, Butternut, Home Pride and Merita, but it is probably best known for Twinkies -- basically a cream-filled sponge cake.
"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Chief Executive Gregory Rayburn said in a statement.
"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," Rayburn added.
Union President Frank Hurt said on Thursday that the crisis at the company was the "result of nearly a decade of financial and operational mismanagement" and that management was trying to make union workers the scapegoats for a plan by Wall Street investors to sell Hostess.
Hostess said its debtor-in-possession lenders had agreed to allow the it to continue to have access to $75 million to fund the wind-down process.
"There's no way to soften the fact that this will hurt every Hostess Brands employee. All Hostess Brands employees will eventually lose their jobs - some sooner than others," Rayburn said in a letter to employees.
The company has canceled all orders in process with its suppliers and said any product in transit would be returned to the shipper.
In its filing with the court, the company said it would have incurred a loss of between $7.5 million and $9.5 million from November 9 to November 19 in lost sales and increased costs.
"These losses and other factors, including increased vendor payment terms contraction, have resulted in a significant weakening of the debtors' cash position and, if continued, would soon result in the debtors completely running out of cash," it said.
Hostess had already reached agreement on pay and benefit cuts with the International Brotherhood of Teamsters, its largest union.