Hostess strike leads to company liquidation; fans scoop up snacks
November 16, 2012 (SCHILLER PARK, Ill.) (WLS) -- Hostess Brands announced Friday that it is winding down operations and has filed a motion with the U.S. Bankruptcy Court seeking permission to close its business and sell its assets, including its iconic brands and facilities.
Bakery operations have been suspended at all plants. Delivery of products will continue and Hostess Brands retail stores will remain open for several days in order to sell already-baked products.
Eighteen-thousand-five-hundred employees are affected, including 1,400 in Illinois who work at the company's Schiller Park, Peoria and Hodgkins facilities. The 82-year-old company had filed for bankruptcy twice in the last decade.
The Board of Directors authorized the wind down of Texas-based Hostess Brands to preserve and maximize the value of the estate after one of the company's largest unions, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, initiated a nationwide strike that Hostess says crippled the company's ability to produce and deliver products at multiple facilities.
On Monday, Hostess Brands permanently closed three plants as a result of the work stoppage. On Wednesday, the company announced it would be forced to liquidate if sufficient employees did not return to work to restore normal operations by 4 p.m., CST.
The BCTGM in September rejected a what Hostess called its " last, best and final offer."
"Hostess Brands is unprofitable under its current cost structure, much of which is determined by union wages and pension costs. The offer to the BCTGM included wage, benefit and work rule concessions but also gave Hostess Brands' 12 unions a 25 percent ownership stake in the company, representation on its Board of Directors and $100 million in reorganized Hostess Brands' debt," a Hostess press release said.
In addition to dozens of baking and distribution facilities around the country, Hostess Brands will sell its popular brands, including Hostess, Drakes and Dolly Madison, which make cake products such as Twinkies, CupCakes, Ding Dongs, Ho Ho's, Sno Balls and Donettes. Bread brands to be sold include Wonder, Nature's Pride, Merita, Home Pride, Butternut, and Beefsteak, among others.
The wind down means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States.
For employees whose jobs will be eliminated, additional information can be found at www.hostessbrands.info. The website also contains information for customers and vendors. Most employees who lose their jobs should be eligible for government-provided unemployment benefits.
Hostess fans buy up snacks
With word that the iconic snack brand was closing, there was a run on anything Hostess.
"Sad. The end of an era," said Bev Anderson, Hostess customer.
The company's bakery outlet store in southwest suburban Burbank was busier than usual as People stocked up by the bagful.
"Crazy, crazy all day, from the moment we opened the door," said Bonnie, a cashier.
On Friday afternoon, the shelves where the iconic products sat empty.
"We're going to basically go on. Take one day at a time and see what happens," said Marye Willis-Houston, Hostess worker.
"We have not yet heard anything officially & so we are going to stay out here till we hear that. Once we hear that, then we'll come out here and tell our people that it's over, then we're going to go home and do what we need to do for our families," said Don Woods, Union Local One president.
"It's a sad day. We had to stand strong and do what we had to do," said Lamont Watson, Hostess worker.
Meanwhile, a new White House petition wants President Obama to nationalize the Twinkie industry, saving the popular junk food from possible extinction.
national/world, evelyn holmes
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