Twinkie maker Hostess to wind down ops, lay off 18,500 workers, put brands up for sale
POSTED BY: Geezer
UPDATED: Saturday, November 24, 2012 18:01
VIEWED: 12327
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Hostess, the maker of Twinkies and Wonder Bread, plans to go out of business, lay off its 18,500 workers and sell its snack cake and bread brands.
The Irving, Texas, company said a nationwide strike crippled its ability to make and deliver its products, which also include Ding Dongs, Ho Ho’s and Home Pride bread.
Hostess suspended bakery operations at all its factories and said its stores will remain open for several days to sell already-baked products.
The company had warned employees that it would file a motion in U.S. Bankruptcy Court to unwind its business and sell assets if plant operations didn’t return to normal levels by Thursday evening. The privately held company filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade.
“Many people have worked incredibly long and hard to keep this from happening, but now Hostess Brands has no other alternative than to begin the process of winding down and preparing for the sale of our iconic brands,” CEO Gregory F. Rayburn said in a letter to employees posted on the company website.
He added that all employees will eventually lose their jobs, “some sooner than others.”
“Unfortunately, because we are in bankruptcy, there are severe limits on the assistance the (company) can offer you at this time,” Rayburn wrote.
Thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike last week after rejecting in September a contract offer that cut wages and benefits. Hostess said Friday the company is unprofitable “under its current cost structure, much of which is determined by union wages and pension costs.”
A union representative did not immediately return a call from The Associated Press seeking comment on the company’s announcement.
Hostess has said that production at about a dozen of the company’s 33 plants has been seriously affected by the strike. Three plants were closed earlier this week.
Hostess had already reached a contract agreement with its largest union, the International Brotherhood of Teamsters.
The company, founded in 1930, was fighting battles beyond labor costs. Competition is increasing in the snack space and Americans are increasingly conscious about healthy eating. Hostess also makes Dolly Madison, Drake’s and Nature’s Pride snacks.
http://www.washingtonpost.com/business/hostess-to-wind-down-operations
-lay-off-18000-workers-and-sell-brands-following-labor-strike/2012/11/16/0e5a13f8-2feb-11e2-af17-67abba0676e2_story.html?hpid=z4
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The new contract cuts salaries across the company by 8% in the first year of the five-year agreement. Salaries then bump up 3% in the next three years and 1% in the final year.
Hostess has also reduced its pension obligations and its contribution to the employees' health care plan. In exchange, the company offered concessions including a 25% equity stake for workers and the inclusion of two union representatives on an eight-member board of directors.
http://money.cnn.com/2012/11/14/news/companies/hostess-liquidation-thu
rsday/index.html
Given that the company has been in bankruptcy twice since 2004, is a billion bucks in debt, and is losing market share as folks look for healthier snack options, did the bakers union push them too hard? The Teamsters did agree to the new contract, but now their members will be out of work as well.
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There's been much baking industry consolidation going on for decades. Hostess brands are too powerful to ever disappear entirely. I grew up on Devil Dogs, Twinkies, Yodels, and Snowballs. Back in Jr. HS thru HS those items sold for 5-10 cents, and often my friends and I didn't have the money.
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Eh, it's just run-of-the-mill fodder for our bitter right-wingers like Rap and Geezer, not even worth paying attention to. While I hate that people are losing their jobs, it's been going on all around us since America got driven into the ditch, and it will continue to go on in ever aspect of manufacturing until we're back to where we were before the crash (if we ever are).
Geezer's getting like Rap: Find something, find something, ANYTHING I can blame on Obama/dems/unions/liberals...Ooo, hey, I FOUND something!!! I'll put a post up about it and blame...SOMEBODY!!
Let him have his fun, it keeps him busy.
Twinkies are a food-like substance that will go the way of the Dodo Bird as people seek healthier food. How long have they been doing that now? I think it's pretty amazing Hostess' non-food foods have hung around this long! They're probably quietly diversifying somewhere over under the covers, preparing for the time their old-style crap becomes extinct.
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Quote:
Originally posted by Jongsstraw:
There's been much baking industry consolidation going on for decades. Hostess brands are too powerful to ever disappear entirely. I grew up on Devil Dogs, Twinkies, Yodels, and Snowballs. Back in Jr. HS thru HS those items sold for 5-10 cents, and often my friends and I didn't have the money.
From what I've been reading, the company may sell off the brand names and other businesses will sell other stuff as Twinkies, HoHos, etc.
I never was that fond of Hostess stuff, liking Little Debbie and Moon Pies more, but its a shame to see them go.
Too bad the indefinite shelf life stories are bogus, or you could stock up and eat Twinkies for years.
http://www.snopes.com/food/ingredient/twinkies.asp
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But think of the poor, poor stoners!!!
Quote:
Originally posted by Jongsstraw:
There's been much baking industry consolidation going on for decades. Hostess brands are too powerful to ever disappear entirely. I grew up on Devil Dogs, Twinkies, Yodels, and Snowballs. Back in Jr. HS thru HS those items sold for 5-10 cents, and often my friends and I didn't have the money.
Those rat bastards at Hostess took over Drake's Cakes. I'll never forgive them for what they did to Funny Bones!
Kwindbago, hot air and angry electrons
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Hello,
Twinkies may have a shelf life of 25 days, but I'm fairly sure I've eaten some from vending machines that had gone on quite a bit longer.
--Anthony
Note to Self:
Raptor - woman testifying about birth control is a slut (the term applies.)
Context: http://tinyurl.com/d6ozfej
Six - Wow, isn't Niki quite the CUNT? And, yes, I spell that in all caps....
http://tinyurl.com/bdjgbpe
Wulf - Niki is a stupid fucking bitch who should hurry up and die.
Context: http://tinyurl.com/afve3r9
“The stupid neither forgive nor forget; the naive forgive and forget; the wise forgive but do not forget.” -T. S. Szasz
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I'm fairly certain some company will buy the rights and recipes for them. I am a big fan of the Twinkie, though, and am sad to see this happen. Especially, that so many people are going to loose their jobs because the unions couldn't/wouldn't (that's speculating, mind you) come to an agreement on a deal. It is my understanding from a Wall Street Journal article (copied and pasted from a friend - I don't have a subscription to their site and thus can't show the link here) that the upper management rolled their salaries back to $1/year and others took big pay decreases to try and divert this from happening.
Hopefully, I'll still be able to find some Twinkies at the store when I get off work :)
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"I supported Bush in 2000 and 2004 and intellegence [sic] had very little to do with that decision." - Hero
"I was wrong" - Hero, 2012
Mitt Romney, introducing his running mate: "Join me in welcoming the next President of the United States, Paul Ryan!"
Rappy's response? "You're lying, gullible ( believing in some BS you heard on msnbc ) or hard of hearing."
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Another victory for labor. I wonder if Obama will bail them out.
H.
Hero...must be right on all of this. ALL of the rest of us are wrong. Chrisisall, 2012
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Quote:
The workers had taken concessions to help the company survive a previous bankruptcy, and this time around when the call for cuts came, members of the Teamsters narrowly accepted them while members of the Bakery, Confectionery, Tobacco Workers, and Grain Millers union overwhelmingly said no and went on strike.
Blaming the unions for everything is typical by those who don't know the details and are biased against unions.Quote:
Of course, Hostess management had already claimed that the strike would be responsible for the closings of specific plants—when it had already planned to close plants even if the workers accepted the cuts and stayed at work. ( http://stlouis.cbslocal.com/2012/11/13/slay-i-was-told-months-ago-abou
t-hostess-closure/])
As to people taking "cuts" in their pay,Quote:
Hostess is in bankruptcy for the second time in recent years. Workers took concessions just a few years ago and this year the company has stopped making its contractually obligated contributions to their pensions. Meanwhile the company's CEO got a 300 percent raise, from $750,000 to $2,250,000, while other top executives got raises of hundreds of thousands of dollars apiece. http://bctgm.org/2012/11/hostess-in-current-condition-because-of-faile
d-management/
For the past eight years management of the company had been in the hands of Wall Street investors, "restructuring experts", third-tier managers from other non-baking food companies and then a "liquidation specialist". Six CEO’s in eight years, none of whom with any bread and cake baking industry experience, was the prescription for failure.
Not the way to run a business, so no surprise they've finally failed.
Saddens me; unhealthy as they are, I'll miss my Hostess Cupcakes, which now and again I do enjoy. When I was in high school, my "lunch" almost always consisted of Hostess Cupcakes, potato chips and milk...it's a miracle I lived to the ripe old age I have!
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