cdj
11-16-2012, 07:50 AM
Stock up now, boys!
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Twinkies Maker Hostess Going Out of Business
Hostess, the makers of Twinkies, Ding Dongs and Wonder Bread, is going out of business after striking workers failed to heed a Thursday deadline to return to work, the company said.
“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Hostess CEO Gregory F. Rayburn said in announcing that the firm had filed a motion with the U.S. Bankruptcy Court to shutter its business. “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.”
Hostess Brands Inc. had warned employees that it would file to unwind its business and sell off assets if plant operations didn't return to normal levels by 5 p.m. Thursday. In announcing its decision, Hostess said its wind down would mean the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores in the United States.
The Irving, Texas-based company had 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, CEO Gregory Rayburn said many workers had 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 said that production at about a dozen of the company's 33 plants had been seriously affected by the strike. Three plants were closed earlier this week.
The 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 had argued that workers must make concessions for it to exit bankruptcy and improve its financial position.
The company, founded in 1930, was 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.
If the motion is granted, Hostess would begin closing operations as early as Tuesday.
"Most employees who lose their jobs should be eligible for government-provided unemployment benefits," Hostess said.
Copyright Associated Press / NBC 5 Dallas-Fort Worth
LINK (http://www.nbcdfw.com/news/national-international/NATL-Twinkies-Maker-Hostess-Going-Out-of-Business-179643161.html)
:(
Twinkies Maker Hostess Going Out of Business
Hostess, the makers of Twinkies, Ding Dongs and Wonder Bread, is going out of business after striking workers failed to heed a Thursday deadline to return to work, the company said.
“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Hostess CEO Gregory F. Rayburn said in announcing that the firm had filed a motion with the U.S. Bankruptcy Court to shutter its business. “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.”
Hostess Brands Inc. had warned employees that it would file to unwind its business and sell off assets if plant operations didn't return to normal levels by 5 p.m. Thursday. In announcing its decision, Hostess said its wind down would mean the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores in the United States.
The Irving, Texas-based company had 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, CEO Gregory Rayburn said many workers had 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 said that production at about a dozen of the company's 33 plants had been seriously affected by the strike. Three plants were closed earlier this week.
The 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 had argued that workers must make concessions for it to exit bankruptcy and improve its financial position.
The company, founded in 1930, was 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.
If the motion is granted, Hostess would begin closing operations as early as Tuesday.
"Most employees who lose their jobs should be eligible for government-provided unemployment benefits," Hostess said.
Copyright Associated Press / NBC 5 Dallas-Fort Worth
LINK (http://www.nbcdfw.com/news/national-international/NATL-Twinkies-Maker-Hostess-Going-Out-of-Business-179643161.html)