Twinkies maker: Liquidation decision expected Friday

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NEW YORK Hostess Brands said it likely won't make an announcement until Friday morning on whether it will move to liquidate its business, after the company had set a Thursday deadline for striking employees to return to work.

The maker of Twinkies, Ding Dongs and Wonder Bread had warned employees that would file a motion in U.S. Bankruptcy Court to unwind its business and sell off assets if plant operations didn't return to normal levels by 5 p.m. EST Thursday. That would result in the loss of about 18,000 jobs.

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A spokesman for Hostess, Lance Ignon, said the company would likely make an announcement Friday after assessing plant operations Thursday evening.

Hostess, based in Irving, Texas, has already reached a contract agreement 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 in September a contract offer that cut wages and benefits. Officials for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union say the company stopped contributing to workers' pensions last year.

In an interview with Fox Business, Hostess CEO Gregory Rayburn said many workers have already crossed picket lines this week to go back to work despite warnings by union leadership that they'd be fined.

"The problem is we don't have enough crossing those lines to maintain normal production," said Rayburn, who first joined Hostess earlier this year as a restructuring expert.

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

A representative for the bakery-workers union did not respond to request for comment. The Teamsters meanwhile are 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 would file the motion to liquidate Friday if needed, with a hearing scheduled for Monday. If the motion is granted, Hostess would begin closing operations as early as Tuesday.

[CathyMurphyMurphy]

http://www.facebook.com/SaveTheTwinkie My daughter had this link from Wendy Williams show (sorry if on a different network?)

[rwings1927]

While the union model may have brought forth the current working conditions we enjoy today the fact remains is that it's an outdated concept in today's global economy. The fact that Hostess was mismanaged is going to do nothing for the rank and file members that are now out of a job, meanwhile the "expertly" run management team of the union will still collect their salaries. Who is this decision to strike going to hurt, the union management? Hardly, sorry management is sorry management no matter who they work for and the quicker members realize that their management is getting fat off their work just as much as corporations are the better off we'll all be.

[Meg003]

It is disappointing to see so many young people blame average Americans for the state of the economy. Are you all planning to jump off bridges when you are over 70? I've worked since I was 15. Back then the country was prosperous and jobs were plentiful. Illegals were not sneaking in the country bringing down wages for everyone. There were no jobs "Americans would not do," except harvesting seasonal crops for almost nothing, for which temporary workers were brought in and then sent back. I worked nights and went to school in the daytime, putting myself through college with no help from anyone.

I never earned a large salary but I knew I would get a retirement pension. Paying in hundreds of dollars each month for decades, when the economy was good, the pension WAS funded well. Now there are lower profits due to government regulations, global competition where no tariffs are imposed when impoverished third worlders work for desperately low wages and the government lets those products be dumped here, where manufacturers must pay minimum wages.

You want to blame someone, blame the government that has led us here. They don't answer to you; they don't answer to me. They have abandoned the will of the people and perversely do whatever they want.

[simplerandom]

Please please please find a way to restructure and start back up without unions. Unions are crushing America!

[omnibus66]

Labor unions built America. Without them there would be no 40 hour work week, no paid vacations, no sick leave, no retirement plans, no job security, no job safety regulations, and no respect for you as a human being. But on the plus side there would be low wages, and the rich would be even richer than they now are.

[TJphoto]

Let's see, the company is in Bankruptcy and the Union is on strike because they don't like the deal. Oh yea, that's a winning combo. People today really don't get it. Reality can slap them in the face and they still look like a deer caught in the headlights. Enjoy unemployment (hint, it doesn't last forever)

[tpuhinesor]

A recent article on the web said that if you cut off a cockroach head, the body will survive for 6 hours (?) before it dies of starvation.

I have absolutely no sympathy for the greedy workers in past years who needed this and that and their unions "won" all these benefits without anyone knowing where the money would come from. The unions held a lot of companies hostage so the union management could retain their very high pay and benefits. Is there anyone out there who gave the warning that the unions were eventually going to destroy the companies?

[CDLady]

didn't you?
sad situation..

[tmittelstaed]

The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union should buy Hostess, form an ESOP then do whatever they want with the salaries

[MIO42]

Mitt should have stepped in on this one
He knows how to close em down and somebody gets RICH
eating that is

[Meg003]

He saved more companies like this than he closed. By bringing in the cash needed to retool companies, he made some competitive again. The workers kept their jobs; the companies grew in worth. Then they could be sold, yes, at a profit. Will these workers be better off without jobs than if someone like Mitt Romney had bought the company and saved it?

[hdc77494]

It's my understanding that the other major bakeries long ago spun off the delivery parts of their companies to lower costs, and Hostess tried to do the right thing and keep everyone under the union/corporate umbrella. The striking workers are just a little too greedy for their own good. This should serve as a great object lesson. A strike that actually leads to bankruptcy and liquidation might sober up the unions.

[hypnotoad72]

Too much cheaper competition?

More people no longer eating processed goo?

Or, I know, let's blame the unions, huzzah!! They're the only workers who can still afford to BUY this crap in the first place...