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Hostess Brands to Wind Down Company After BCTGM Union Strike Cripples Operations
Herald Online.com ^ | November 16, 2012 | Hostess Brands Inc.

Posted on 11/16/2012 4:35:56 AM PST by Vince Ferrer

RVING, TEXAS, NOV. 16, 2012 — /PRNewswire/ -- Hostess Brands Inc. today announced 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.

The Board of Directors authorized the wind down of 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 (BCTGM), initiated a nationwide strike that crippled the Company's ability to produce and deliver products at multiple facilities.

On Nov. 12, Hostess Brands permanently closed three plants as a result of the work stoppage. On Nov. 14, the Company announced it would be forced to liquidate if sufficient employees did not return to work to restore normal operations by 5 p.m., EST p.m., Nov. 15. The Company determined on the night of Nov. 15 that an insufficient number of employees had returned to work to enable the restoration of normal operations.

The BCTGM in September rejected a last, best and final offer from Hostess Brands designed to lower costs so that the Company could attract new financing and emerge from Chapter 11. Hostess Brands then received Court authority on Oct. 3 to unilaterally impose changes to the BCTGM's collective bargaining agreements.

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.

"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," said Gregory F. Rayburn, chief executive officer. "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."

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 iconic 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.

The Company said its debtor-in-possession lenders have agreed to allow the Company to continue to have access to the $75 million financing facility put in place at the start of the bankruptcy cases to fund the sale and wind down process, subject to U.S. Bankruptcy Court approval.

The Company's motion asks the Court for authority to continue to pay employees whose services are required during the wind-down period.

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.


TOPICS: Business/Economy; News/Current Events
KEYWORDS: bakery; bctgm; biglabor; dopeydems; epicfail; hostess; layoffs; losers; strike; twinkies; unions
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1 posted on 11/16/2012 4:36:02 AM PST by Vince Ferrer
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To: Vince Ferrer

The end of an era. Sadly, we will have to look for a replacement in our lives.


2 posted on 11/16/2012 4:38:17 AM PST by pepsionice
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To: Vince Ferrer

Another case of unions hanging themselves.


3 posted on 11/16/2012 4:39:12 AM PST by struggle (http://killthegovernment.wordpress.com/)
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To: Vince Ferrer

Another slice of America gone. Pretty soon, what’s left won’t be worth saving.


4 posted on 11/16/2012 4:39:42 AM PST by BigCinBigD (...Was that okay?)
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To: pepsionice

I’m stocking up now...imagine the street/barter value of Hostess Twinkies, Snowballs and cupcakes when TSHTF.


5 posted on 11/16/2012 4:40:11 AM PST by wtc911 (Amigo - you've been had.)
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To: Vince Ferrer

Reap the whirlwind, union workers.

6 posted on 11/16/2012 4:40:43 AM PST by RabidBartender (If pigs could vote, they'd vote for the guy holding the slop bucket.)
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To: Vince Ferrer

Going Galt!

I hope none of these union goons ever finds another job!
Idiots!


7 posted on 11/16/2012 4:40:57 AM PST by Bon mots (Abu Ghraib: 47 Times on the front page of the NY Times | Benghazi: 2 Times)
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To: All

they were able to strike and shut the place down because being out of work paid more than working.


8 posted on 11/16/2012 4:42:30 AM PST by newnhdad (Our new motto: USA, it was fun while it lasted.)
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To: Vince Ferrer

No more Twinkees or Snowballs...Michelle is very happy.


9 posted on 11/16/2012 4:44:11 AM PST by FES0844
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To: Vince Ferrer
The best way to payback the union and end mob rule ..er "collective" bargaining BS and prove who owns the company.

I had a brother-in-law who lost his job this way years ago. They stayed on strike for a year and a half until finally the company closed up and moved down south. 850 guys lost really great paying jobs cause they were a bunch of thugs and smart-a&&es!

10 posted on 11/16/2012 4:44:11 AM PST by wesagain (The God (Elohim) of Abraham, Isaac and Jacob is the One True GOD.)
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To: Vince Ferrer
Let all those union punks...and their families...starve! Including...no,actually,*particularly*...the punks heading the union!
11 posted on 11/16/2012 4:45:00 AM PST by Gay State Conservative (Benghazi: What Did Baraq Know And When Did He Know It?)
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To: Vince Ferrer

Unions get greedy and...POOF... 18,000 jobs are gone.

Well, union thugs.. guess you showed them, huh?


12 posted on 11/16/2012 4:45:40 AM PST by ScottinVA (I've never been more disgusted with American voters.)
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To: Vince Ferrer

be intersting to hear the union side of the story. how did they end up reasoning that the union was better off closing the company than taking the offer?

note is said how the union was better off. not the workers. my experience with unions they could care less about the people, its about the union.


13 posted on 11/16/2012 4:47:03 AM PST by beebuster2000
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To: newnhdad
So who among the Snowball bakers said that striking in this country is a good idea for better benni’s and pay raise? The sympathy level is nonexistent as I go to Dunkin Donuts this morning. Good luck in killing your future Hostess employees. n/s
14 posted on 11/16/2012 4:48:22 AM PST by cameraeye (A happy kuffir!)
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To: ScottinVA

The union was not willing to give up 8% salary for 3 years (with built in raises thereafter) and accept a 25% ownership stake in the company

now they get 100% of nothing

except free obamacare! whee!


15 posted on 11/16/2012 4:49:44 AM PST by silverleaf (Age Takes a Toll: Please Have Exact Change)
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To: Vince Ferrer

This is a big deal in our town. Hostess started in Kansas City and still has a big bakery, on the Kansas side. Kansas is a right to work state. Hopefully someone will buy it and re-open it as a non-union shop. They interviewed this young man yesterday who was terrified of losing his job just before the holidays. I’m betting he voted O.


16 posted on 11/16/2012 4:51:58 AM PST by Mercat
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To: wtc911

17 posted on 11/16/2012 4:52:08 AM PST by Neidermeyer
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To: beebuster2000

Richard Trumka won’t miss a paycheck

guaranteed


18 posted on 11/16/2012 4:52:08 AM PST by silverleaf (Age Takes a Toll: Please Have Exact Change)
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To: wtc911

What is the shelf life of a twinkie?
About 10,000 years?


19 posted on 11/16/2012 4:53:12 AM PST by silverleaf (Age Takes a Toll: Please Have Exact Change)
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To: beebuster2000

They probably know someone is just going to get a bargain on buying the facilities and the brand and they are going to move back into their new old jobs with another contract.

I’m going to pay close attention to who is making the new Hostess products when they come back out again. If its union run, I won’t ever buy from them again.


20 posted on 11/16/2012 4:54:29 AM PST by Elyse (I refuse to feed the crocodile.)
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To: Vince Ferrer

Can somebody please explain to me why unions can’t just be FIRED and replaced by other workers?

I mean, why do we have to have unions at all?

Why are schools unionized, or rather why must they continue to be?

Why couldn’t Hostess just say to these bakers: show up by Monday or your job will go to another worker?

I really don’t understand this.

Drake’s coffee cake was the best of all coffee cakes and I will be very sad not to eat it anymore.


21 posted on 11/16/2012 4:54:41 AM PST by jocon307
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To: pepsionice

I believe a large bakery, or several such large bakeries operating currently within a few hundred feet over our Southernmost border are smiling today as they see themselves as the new owners of certain Hostess trademarks, and copyrights, and begin shipping into the U.S..

A major bakery left California with good reason (CARB Regulations) a few years ago providing the Mexican bakery Bimbo the opportunity to expand their operation, and fill the void from just over the border in Mexico. Seems to me the same will happen to fill the void when Hostess assumes the dead Cockroach position.

(Hmmmm bad analogy, but...)


22 posted on 11/16/2012 4:55:40 AM PST by rockinqsranch (Dems, Libs, Socialists, call 'em what you will, they ALL have fairies livin' in their trees.)
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To: Vince Ferrer

There will be more....just wait.


23 posted on 11/16/2012 4:56:47 AM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: Vince Ferrer

Key phrase from the write up: “Most employees who lose their jobs should be eligible for government-provided unemployment benefits.” So the government is complicit in this shut down.


24 posted on 11/16/2012 4:58:02 AM PST by Mouton (Voting is an opiate of the electorate. Nothing changes no matter who wins..)
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To: Vince Ferrer
We need to identify pro-union and pro-Obama, pro-Democrat voters and place them all on a do-not-hire list.

I met a jerk yesterday who proudly told me he sued companies (workmans comp) by pretending injury, for a living, and ticked off the many 50K+ settlements he had gotten.

25 posted on 11/16/2012 4:59:35 AM PST by Lazamataz (Abandon all hope,.)
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To: silverleaf

Wow!! THAT were Hostess` offer and the union turned it down?? In THIS economy??

If average Americans would look at anything besides the interior of their own asses, they`d be stunned.


26 posted on 11/16/2012 5:00:42 AM PST by ScottinVA (I've never been more disgusted with American voters.)
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To: Vince Ferrer

The brands and trademarks will stay the same. I wouldn’t be surprised if you see Hostess off shelves for 3-6 months though.

This brand is too strong to just disappear.


27 posted on 11/16/2012 5:01:37 AM PST by PittsburghAfterDark
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To: wtc911

I love snoballs. I just had one last weekend or so. Oh, and their crumb donuts. Sad day for America.


28 posted on 11/16/2012 5:02:55 AM PST by ican'tbelieveit (School is prison for children who have commited the crime of being born. (attr: St_Thomas_Aquinas))
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To: ican'tbelieveit
Tallahassee: [discovers Hostess truck filled with Sno-Balls] Sno-Balls? Sno-Balls? SNO-BALLS? Where's the @#$%ing Twinkies -- ?!?

Columbus: I love Sno-Balls.

Tallahassee: I hate coconut. Not the taste, consistency.

Columbus: [eats a Sno-Ball] Fresh.

Tallahassee: [grimly] Oh, this Twinkie thing. It ain't over yet.

-- Zombieland (2009)

29 posted on 11/16/2012 5:04:46 AM PST by KentTrappedInLiberalSeattle ("If you're not fiscally AND socially conservative, you're not conservative!" - Jim Robinson, 9-1-10)
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To: Vince Ferrer

Bet the union idiots *still* think Hostess is bluffing and that the ‘fat cats’ will eventually ‘cave’ to the union demands.

They can go join the Studebaker workers in Indiana who are still waiting for Studebaker to knuckle under and reopen the plant.


30 posted on 11/16/2012 5:06:31 AM PST by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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It ain’t a ‘shelf life’. It’s a ‘half life’, like uranium.


31 posted on 11/16/2012 5:06:43 AM PST by PubliusMM (RKBA; a matter of fact, not opinion. 01-20-2013: Still seeking change.)
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To: silverleaf
except free obamacare! whee! <<

Don't forget a free Obama Phone....so they can call in and have their unemployment checks sent to wherever they are on vacation....for 249 weeks...

32 posted on 11/16/2012 5:07:31 AM PST by M-cubed
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To: Vince Ferrer

Greed and stupidity have destroyed many a company.


33 posted on 11/16/2012 5:08:23 AM PST by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: jocon307

A long time ago in large factories in some parts of the country, the management took unfair advantage of the workers...i.e. insisting on long hours for little pay in dangerous environments. Workers unions arose because of this, but as with any organization of human beings, corruption infiltrated the union leaders and then politicians figured out they could curry favor from unions and get re-elected etc... etc... and it all went downhill from there.


34 posted on 11/16/2012 5:09:52 AM PST by Drawsing (The fool shows his annoyance at once. The prudent man overlooks an insult. (Proverbs 12:16))
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To: Lazamataz

It is unfortunately Federally illegal to deny employment based on prior union membership. It is not, however, illegal to deny employment based on what political party they are a member of or how they voted in the last election. (It is illegal to make their continued employment after they are hired conditional on how they vote, though.)


35 posted on 11/16/2012 5:10:42 AM PST by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: RabidBartender

They own it.


36 posted on 11/16/2012 5:11:03 AM PST by Eric in the Ozarks (In the game of life, there are no betting limits)
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To: ScottinVA

You have to look hard to find out any reporting on what “draconian” cuts the union claims the company was demanding

Here are a few clues to what the unions turned down. Mind these came from a company that was already in Banrkrupcty

Here is the 8% cut- only for one year. Then raises thereafter
http://www.perishablenews.com/index.php?article=0024285

Here is restructuring to put new hires under a 401K plan, which what nonunion and management get - and to reenter Teamster pension plans on a case-by-case basis

Also some changes to wasteful featherbedding work rules

http://usatoday30.usatoday.com/money/companies/story/2012-04-14/twinkies-hostess-unions-bankruptcy/54280314/1

http://www.foodnavigator-usa.com/Business/Teamsters-says-it-cannot-endorse-Hostess-final-offer-but-puts-it-to-union-vote


37 posted on 11/16/2012 5:11:20 AM PST by silverleaf (Age Takes a Toll: Please Have Exact Change)
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To: Neidermeyer

"I could use a Twinkie."
38 posted on 11/16/2012 5:11:28 AM PST by RandallFlagg ("Liberalism is about as progressive as CANCER" -Alfonzo Rachel)
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To: wtc911

Son gets off work in 20 mins or so, telling him to do the same thing. I really like having a snoball or mini donuts from time to time. And honestly, with the way the public is behaving anymore toward things that make us “fat,” I am not sure a company will fill that void. Would it be worth the investment in the current political/social environment.


39 posted on 11/16/2012 5:14:17 AM PST by ican'tbelieveit (School is prison for children who have commited the crime of being born. (attr: St_Thomas_Aquinas))
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To: Mouton
Agree. Unemployment benefits should not be available in these situations where the employees essentially decided not to work.
40 posted on 11/16/2012 5:14:32 AM PST by JIM O
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To: Vince Ferrer
Same thing happened at my first job after I got married. Buckeye Iron and Brass. The foundry that cast the Wright Bros engine and invented the automatic shutoff for gasoline nozzles.
Two strikes in 3 years and Mr. Huffman said, “enough was enough”. shut it down and sold the patents.
Sad day. Fifty years ago this past summer.
41 posted on 11/16/2012 5:18:30 AM PST by Tupelo (Republican, a national party no more.)
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To: struggle

“Another case of unions hanging themselves.”

The union here was idiotic, but there’s more to this story than the union’s stupidity. Hostess was ALREADY in bankruptcy, largely on account of $700 million of debt it had accumulated in recent years.

This looks like one of those ‘perfect storm’ cases, with mismanagement and union stubbornness leading to the collapse of an iconic American brand.


42 posted on 11/16/2012 5:19:40 AM PST by Conscience of a Conservative
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To: jocon307
Can somebody please explain to me why unions can’t just be FIRED and replaced by other workers?

Because the union has a contract with the company. Because the union is forcing the company into bankruptcy, the union employees are basically firing themselves.

By getting rid of the union contracts, the value of the company will increase dramatically.

For the most part, management employees will be retained by the "new" company and only the best "former employees" will be offered jobs with the "new" company.

Once the company is sold, which could happen by the end of the month, production will be up and running by the end of the year.

43 posted on 11/16/2012 5:20:36 AM PST by SeaHawkFan
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To: Bon mots

-——I hope none of these union goons ever finds another job!
Idiots!-——

Having Hostess on a resume should mean automatic rejection for an hourly worker .


44 posted on 11/16/2012 5:21:58 AM PST by bert ((K.E. N.P. N.C. +12 ..... Present failure and impending death yield irrational action))
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To: SeaHawkFan

There isn’t going to be a “new” company.

Management probably have several deals in hand to sell the brands and recipes to Frito-Lay or some other such company who will use other non-union bakeries for production and their own drivers for distribution.

Hostess bakeries and drivers are now out-of-business.


45 posted on 11/16/2012 5:24:52 AM PST by jimbo123
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To: Spktyr
It is unfortunately Federally illegal to deny employment based on prior union membership.

Hey, we're just offering a list. What employers do with it is their business. They might find a more qualified employee.

46 posted on 11/16/2012 5:34:41 AM PST by Lazamataz (Abandon all hope,.)
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To: silverleaf
You have to look hard to find out any reporting on what “draconian” cuts the union claims the company was demanding

It's my understanding from a thread yesterday that these terms were ordered (or agreed upon) by a bankruptcy court, so it's not like the company arbitrarily gave the union an ultimatum of some kind.

47 posted on 11/16/2012 5:35:21 AM PST by MamaTexan (In Propria Persona)
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To: jocon307

Unions = Organized Crime but tries to appear as an element that is for the good of the workers. They exist to collect union dues and act as liasons between the crime bosses and government for a cut of course.


48 posted on 11/16/2012 5:35:21 AM PST by jsanders2001
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To: Vince Ferrer

Another boneheaded, stupid-assed move by a union. 18,000 jobs lost.

Congratulations for looking out for the working man. I bet the union heads still have their jobs, though.

What abject morons.


49 posted on 11/16/2012 5:36:03 AM PST by reagan_fanatic (You are not now, and will never be my President, Mr. Obama.)
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To: RabidBartender

They should all be branded with a scarlet U, which will identify them as a pariah and never be employable again.


50 posted on 11/16/2012 5:37:55 AM PST by mindburglar (It must be noon, because I'm drunk somewhere.)
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