Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

Tween Titans Tween Titans

Twinkies going the way of the Dodo?

Posted by on Nov. 16, 2012 at 9:56 AM
  • 11 Replies

http://money.cnn.com/2012/11/16/news/companies/hostess-closing/index.html


Hostess Brands has asked permission of the bankruptcy court to shut down its business.

NEW YORK (CNNMoney) -- Hostess Brands -- the maker of such iconic baked goods as Twinkies, Devil Dogs and Wonder Bread -- announced Friday that it is asking a federal bankruptcy court for permission to close its operations, blaming a strike by bakers protesting a new contract imposed on them.

The closing will result in Hostess' nearly 18,500 workers losing their jobs as the company shuts 33 bakeries and 565 distribution centers nationwide, as well as 570 outlet stores. The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union represents around 5,000 Hostess employees.

"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," said CEO Gregory Rayburn in a statement.

Hostess will move to sell its assets to the highest bidder. That could meannew life for some of its most popular products, which could be scooped up at auction and attached to products from other companies.

A letter that Hostess sent to its network of stores that carry its product said it expects "there will be great interest in our brands." But it said it could not give a time frame for when the sales would take place and its products would be available again.

But even if those brands are bought and restarted, the Hostess workers will not get their jobs back.

"The industry has overcapacity. We're overcapacity. Our rivals are overcapacity," said Rayburn in an interview on CNBC. Asked if the shutdown decision could be reversed if the Bakers' union agreed to immediately return to work, he responded, "Too late."

While approval of the bankruptcy court is needed before the company can start selling its assets in liquidation, the company said production at all of its bakeries has ceased effective Friday, and that stores will no longer receive products from Hostess Brands. But products that are already in stores can be sold, and the outlet stores will remain open for several days to sell the products they already have.

Related: Cake Wreck -- From icon to bust

Hostess had annual sales of about $2.5 billion. The company said it had been making 500 million Twinkies and 127 million loaves of Wonder Bread annually before Friday's shutdown.

Its bread brands, including Wonder Bread, Nature's Pride and Butternut, make the company the No. 2 bread baker in the country, according to Symphony/IRI Group. Bimbo Bakeries, maker of the Arnold and Stroehmann brands, is the No. 1 bread baker.

The company had given a 5 p.m. ET Thursday deadline for the bakers to return to work or face a shutdown of the company. The unions at Hostess could not be reached immediately for comment on the decision.

Hostess filed for bankruptcy in January, its second trip to bankruptcy court since 2004. It previously emerged from restructuring in 2009 after a four-and-a-half year process.

Related: The history of labor battles at Hostess

The company is now controlled by a group of investment firms, including hedge funds Silver Point Capital and Monarch Alternative Capital.

In September, one of its major unions, the International Brotherhood of Teamsters, voted narrowly to accept a new contract with reduced wages and benefits. The Bakers' union rejected the deal, however, prompting Hostess management to secure permission from a bankruptcy court to force a new concession contract on workers.

The Teamsters union, which represents 7,500 Hostess workers, has been sharply critical of the smaller Bakers' decision to strike, saying it was forcing the company to the cusp of liquidation. The Teamsters said Thursday that the Bakers' union should hold a secret ballot on the company's offer, rather than the voice votes that were held in union halls around the country that authorized the decision to strike.

Related: How brands can survive bankruptcy

"It is difficult for Teamster members to believe that is what the [Bakers' union] Hostess members ultimately wanted to accomplish when they went out on strike," said the Teamsters' statement.

The Bakers' union has made several statements earlier in the week saying management is to blame for the condition of the company, not the strike.

The new contract cut salaries across the company by 8% in the first year of the five-year agreement. Salaries were then scheduled to bump up 3% in the next three years and 1% in the final year.

Hostess also reduced its pension obligations and its contribution to the employees' health care plan. In exchange, the company offered concessions, including a 25% equity stake for workers and the inclusion of two union representatives on an eight-member board of directors. To top of page

Do you work for Hostess? We want to hear from you. E-mail us and your story might be included in our coverage. 

Wenchmommy381, International Wenches Guild

"I know that something very strange Is happening to my brain.
I'm either feeling very good Or else I am insane.
The seeds of doubt you planted Have started to grow wild
And I feel that I must yield before The wisdom of a child.
And it's love you bring,
No, that I can't deny
With your wings,
I can learn to fly,
Sweet young thing."
--M Nesmith
by on Nov. 16, 2012 at 9:56 AM
Add your quick reply below:
You must be a member to reply to this post.
Replies (1-10):
TempestRayne
by on Nov. 16, 2012 at 11:27 AM
I will miss.you, twinky.
Posted on the NEW CafeMom Mobile
psych_mom
by on Nov. 17, 2012 at 10:47 PM

Last night DH and I went and bought one last Hostess product- I got the chocolate cupcakes and he went with Twinkies. Good bye yumminess.

M4LG5
by Valeri on Nov. 18, 2012 at 12:55 PM
I will be honest....I don't think I have ever bought one for my kids. Bad mom.
Posted on CafeMom Mobile
Barabell
by on Nov. 18, 2012 at 1:41 PM


Quoting M4LG5:

I will be honest....I don't think I have ever bought one for my kids. Bad mom.

My son finally had a Twinkie when he was in school, and he didn't like it. I don't think I've ever bought a box. I could take them or leave them, and so if I was buying treats, I'd rather get something I really enjoy. If we do get those kinds of snacks, typically it's Little Debbie brand.

wenchmommy381
by on Nov. 18, 2012 at 5:32 PM

I get Drake's Cakes-- Devil Dogs, to be precise. 

I can't say as I'll miss them, but it is kind of sad from a nostalgia point of view. I don't like licorice or Necco wafers, but it would sad to see them no longer available.

wakymom
by Silver Member on Nov. 18, 2012 at 5:54 PM

 I was looking at all the empty shelf spaces today in Marsh (grocery store) and Walmart where the Hostess used to be. Such a sad sight : (

 

 

 

 

 

kmrtigger
by Kandice on Nov. 18, 2012 at 7:54 PM

While I will miss some of the things, it's not something we buy very often. Most of the things I have found homemade versions of that are much healthier and tastier.

bleumonster
by on Nov. 18, 2012 at 9:37 PM

Someone will end up making them. They are too popular to not although I have no idea why. You can also make your own twinkies minus all the preservatives. It isn't even hard. There are easy recipes online. It wouldn't bother me a bit if they disappeared.

Lorelai_Nicole
by Lorelai on Nov. 19, 2012 at 1:01 AM

I saw on the news tonight that the Twinkies, at least, will likely continue on.

Alexis Emma 10-13-1999 - 13 years old
Kirsten Leslie 03-14-2004 - 8 years old
Sarah Mackenzie 08-14-2007 - 5 years old
Charlotte Amelia & Harmon David 04-12-2012 - 7 months old

wenchmommy381
by on Nov. 19, 2012 at 10:46 AM

I saw that... apparently a Mexican company. Twinkies won't taste the same, though... Mexico doesn't allow things to be made with HFCS. 

Quoting Lorelai_Nicole:

I saw on the news tonight that the Twinkies, at least, will likely continue on.


Wenchmommy381, International Wenches Guild

"I know that something very strange Is happening to my brain.
I'm either feeling very good Or else I am insane.
The seeds of doubt you planted Have started to grow wild
And I feel that I must yield before The wisdom of a child.
And it's love you bring,
No, that I can't deny
With your wings,
I can learn to fly,
Sweet young thing."
--M Nesmith
Add your quick reply below:
You must be a member to reply to this post.
Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)