Twinkies maker Hostess going out of business

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Hostess Brands Inc. said Friday it had suspended operations at all of its 33 plants around the United States and is moving to liquidate assets, news sources report.

The brand is bankrupt and said it had requested court permission to go out of business after a strike of its bakery workers. The company had asked for court permission to get wage and benefit cuts for the striking workers, CNN reported.

Hostess said a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union that began last week had made it unable to produce and deliver products at several facilities and that this was the crippling blow to its struggle with bankruptcy, LA Times reported.

Hostess has about $2.5 billion in sales from a long list of iconic consumer brands of snack cakes and breads, CNN reported.

"We'll be selling the brands and as much of the infrastructure as we can," company spokesman Lance Ignon said. "There is value in the brands," Ignon said, as LA Times reported.

Hostess said the liquidation means that most of the 18,500 employees will lose their jobs, CNN reported.

Hostess had told employees that they had to return to work on Thursday, but the union did not give in, saying it had already given far more in concessions than workers could bear, LA Times reported.

Union officials blamed mismanagement for the company's problems. Hostess 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. The company's claim to fame is its cream-filled cake, Twinkies, CNN reported.

"We do not have the financial resources to weather an extended nationwide strike," Chief Executive Officer 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," LA Times reported.

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This page contains a single entry by mill3877 published on November 16, 2012 9:43 AM.

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