Twinkies maker threatens to liquidate

Spencer Platt/Getty Images

NEW YORK The bankrupt maker of Twinkies and Ding Dongs says that if its employees don't end a nationwide strike by 5 p.m. ET Thursday, it will file a motion in U.S. Bankruptcy court to "liquidate the entire company."

Hostess Brands is reorganizing under Chapter 11 bankruptcy protection. The company announced in a statement on Wednesday that a liquidation of its business would result in losses of nearly 18,000 jobs.

The International Brotherhood of Teamsters, Hostess Brands' largest union, and the group's lenders support the company, according to Hostess. But the Bakery, Confectionery, Tobacco Workers and Grain Millers Union (BCTGM), which called the strikes on Nov. 9, has not reached an agreement with the company to settle disputes over wages, benefits and pension contributions.

BCTGM president Frank Hurt said in a statement on Thursday that "the crisis facing Hostess Brands is the result of nearly a decade of financial and operational mismanagement."

"[Hostess] sought to force the workers, who had already taken significant wage and benefit cuts, to absorb even greater cuts including the loss of their pension contributions," said Hurt.

Hostess announced on Monday the closures of three bakeries due to the nationwide strike. The facilities employ 627 workers, according to the Associated Press.

"We simply do not have the financial resources to survive an ongoing national strike," said Hostess Brands CEO Gregory F. Rayburn. "It is now up to Hostess' BCTGM represented employees and Frank Hurt, their international president, to decide if they want to call off the strike and save this company, or cause massive financial harm to thousands of employees and their families."

If employees don't meet the company's deadline to restore normal operations on Thursday, the company said in a press release the liquidation process will unfold as follows:

Lance Ignon, a spokesman for Hostess, said that production at about a dozen of its 33 plants has been seriously affected by the strike. He said that a decision on whether Hostess will have to move to liquidate the company may not come until Friday morning, after it's had a chance to assess plant operations at the end of Thursday.

The Teamsters meanwhile is urging the smaller 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 continue striking.

The Teamsters also noted that the strike put its union members in the "horrible position" of deciding whether to cross picket lines.

Hostess, a privately held company, 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 has argued that 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 space and Americans are increasingly conscious about healthy eating. Hostess also makes Dolly Madison, Drake's and Nature's Pride snacks.

Hostess said it is prepared to file the motion to liquidate Friday, with a hearing scheduled for Monday. If the motion is granted, Hostess would begin closing operations as early as Tuesday.

[yeawho]

It's all George W Bush's fault!

[1ATL1]

If your a Slave you get, food, clothing, housing and standard health care. If your an immigrant you earn enough for food and clothing, and housing if you share. If your a southern worker, you get enough for food and clothing, and with government assistants you might afford housing. If your a pet dog or cat you rule the world.

[PourpaixPourpaix]

Ohhhhh, Noooo! They closed my local Twinkie factory! What am I going to do???? Thanksgiving is ruined........ why? why? why? What if they took all the loyal employees and just reopened the Seattle plant? Everybody wants to live in Seattle. Look, I'm desperate here. I'm far too big for Hostess to fail.

[lawyertom1]

So, turn the plant over to the workers via ESOP. They get to see if they can deal with the issues better than management, and management gets a tax break.

[rwsmith29456]

All of you that say others will be glad to take the job, as soon as you are hired the company will start cutting your pay and benefits. I think it's Hostess that is using the strong arm tactics.

[daddycrc-2009]

The unions were good when Started, NOW they are BULLIES an a lot more croked than when started. Hell look at the STUPID union in NJ after Sandy, Line workers drove 1800 miles to come help, Because they were NOT UNION they were turned away. An ppl are STILL without power, The STUPID unions are running jobs overseas. hell when janitors are making 25 to 30.00 an hr work 32 hrs a wk but get paid for 40 thats BS. When the employer has to pay ALL the health ins for an employee an his family thats BS.. Quit draining the employers, The more they put out the more we pay at the stores, Thats why the goods from overseas are so dam cheap, an they also have unions there to, But they dont drain the owners pockets..

[retmw1]

When the ceo and upper management take the same pay and benefit cuts as the workers and quit draining the company. Overseas also has socialized healthcare which you are against having here in the U.S.

[imgetinrite]

I hope they continue to strike... serves them right to loose their jobs... FOOLS!

With the amount of people out of work, they are complaining about pension contributions??

I really liked Twinkies :(

[arkajun-2009]

I agree. But unfortunately, when they lose their jobs they will line up for unemployment benefits and become takers, dependent on working Americans to pay for their stupidness. I, for one, hope Hostess can break the Twinkie unions' hold on them. There are 12,000,000 people out there waiting for a chance to go to work.

[indystacey]

It's not just pension contributions. Hostess cutting their pay AGAIN. Plus benefits by a third. But not for the CEO or upper management.

[allchevy]

Bring hostess brands to Greensboro NC we will work,

[1notrub11]

There you go.

I wish all the people in Greensboro, NC all the best and good fortune in seeking work.

[paulteague89]

I am all for union rights, but on this one they may be penny wise and pound foolish. They might win the wage battle, but they will lose the war if the company goes under.

I say, let them cut your salary to save your job. This goes for the executives too.

[DJPEsq]

Never threaten ...

.


Just Do It