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Hostess, the maker of Twinkies, Ding Dongs and Wonder Bread, is going out of business

7:31 PM, Nov 16, 2012   |    comments
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INDIANAPOLIS -- Hostess Brands, maker of Twinkies, Ding Dongs and Wonder Bread said Friday that it has filed a motion in Bankruptcy Court seeking permission to close and sell its assets, including its iconic brands.

The company says it has suspended bakery operations, but deliveries will continue and Hostess retail stores will stay open to sell products already in the pipeline.

Hostess workers remained on picket lines across the country Thursday night, refusing a company ultimatum to return to work or face the liquidation of the national baker.

The company had warned it would file a motion in U.S. Bankruptcy Court to shut operations if enough workers didn't end their weeklong strike by 5 p.m. ET Thursday.

A shutdown would result in the loss of about 18,000 jobs.

READ: Hostess' press release

Privately held Hostess filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade. The company cited increasing pension and medical costs for employees as one of the drivers behind its latest filing. Hostess contends workers must make concessions for it to exit bankruptcy and improve its financial position.

The company, founded in 1930, is fighting battles beyond labor costs, however. Competition is increasing in the snack market, while Americans are increasingly conscious about healthful eating. Hostess also makes Dolly Madison, Drake's and Nature's Pride snacks.

The Teamsters union is urging the bakers union to hold a secret ballot on whether to continue striking. Citing its financial experts who had access to the company's books, the Teamsters say that Hostess' warning of liquidation is "not an empty threat or a negotiating tactic" but a certain outcome if workers keep striking.

Hostess, based in Irving, Texas, already has reached a contract agreement while in bankruptcy with its largest union, the International Brotherhood of Teamsters. But thousands of members in its second biggest union went on strike late last week after rejecting a contract offer that cut wages and benefits.

The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union said the company stopped contributing to workers' pensions last year, and the union wants pension benefits restored.

Production at about a dozen of the company's 33 plants has been seriously affected by the strike, said Lance Ignon, a Hostess spokesman.

"Do it, shut it down," a woman yelled at 5 p.m. Thursday from the picket line formed at the company's Indianapolis plant.

As many as 45 people in the picket line chanted, "No pension, no deal," as they walked a tight circle in the growing cold and gathering darkness.

Their picketing drew frequent supportive honks from passing drivers.

Wedrick Hollingsworth, business agent for Local 372-B of the bakers union, said union members took wage and benefit concessions four years ago and are unwilling to accept further wage cuts and reductions in health and pension benefits sought by the company. "It's just too much for these employees to accept. We gave concessions four years ago."

John Smith, a wrapper operator at the plant who has worked for Hostess for 22 years, said he's at peace with his decision to join the strikers. "You have to take a stand for what you believe in. They gave us a take-it-or-leave-it deal. We can't take the financial abuse."

Hollingsworth, warmly dressed in coveralls and a hooded sweatshirt, said union members would man the picket line outside the plant round-the-clock. Workers erected a tent and were burning wood fires in two grills to help stay warm.

Several private security officers watched the strikers from the gate of the plant, which normally runs its ovens 24 hours a day turning out bread, buns, mini-doughnuts and muffins.

The union business agent said he'd prefer to see Hostess sold.

"It's definitely got to be better than what this company's trying to implement. There are other bakeries out there looking to purchase some of these locations. These employees have the opportunity to go back in (under a new owner)."

Associated Press

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