Reap the whirlwind, union workers.
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.
The end of an era. Sadly, we will have to look for a replacement in our lives.
Another case of unions hanging themselves.
Another slice of America gone. Pretty soon, what’s left won’t be worth saving.
I’m stocking up now...imagine the street/barter value of Hostess Twinkies, Snowballs and cupcakes when TSHTF.
Reap the whirlwind, union workers.
Going Galt!
I hope none of these union goons ever finds another job!
Idiots!
they were able to strike and shut the place down because being out of work paid more than working.
No more Twinkees or Snowballs...Michelle is very happy.
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!
Unions get greedy and...POOF... 18,000 jobs are gone.
Well, union thugs.. guess you showed them, huh?
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.
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!
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.
Richard Trumka won’t miss a paycheck
guaranteed
What is the shelf life of a twinkie?
About 10,000 years?
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.
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