ONTD Political

Hostess Going Out of Business, CEO Blames Union Strike

10:14 am - 11/16/2012


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 earlier 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.

Hostess suspended bakery operations at all its factories and said its stores will remain open for several days to sell already-baked products.

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.

NBC's Savannah Guthrie read a statement on "Today" from the bakers' union that said: “Despite Greg Rayburn’s insulting and disingenuous statements of the last several months, the truth is that Hostess workers and the union have absolutely no responsibility for the failure of this company. That responsibility rests squarely on the shoulders of the company’s decision makers.”

Rayburn responded that he had been “pretty straightforward in all the town hall meetings I’ve done at our plants to say that in this situation I think there is blame that goes around for everyone.”

He denied that the decision to shut down could be a last ditch negotiation tactic to get the union back to the table.

“It’s over,” he said. “This is it.”

Rayburn, who first joined Hostess earlier this year as a restructuring expert, had earlier said that many workers 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," Rayburn told Fox Business.

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

Source
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chaya 16th-Nov-2012 05:19 pm (UTC)
Food tag!
girly123 16th-Nov-2012 05:21 pm (UTC)
NO

NOT MY OATMEAL CREME PIES
maynardsong 16th-Nov-2012 05:23 pm (UTC)
Those are little Debbie...
castalianspring 16th-Nov-2012 05:25 pm (UTC)
No! How will Egon Spengler explain the current amount of psychokinetic energy to laymen NOW?
kaelstra 16th-Nov-2012 05:59 pm (UTC)
omg dead
girly123 16th-Nov-2012 05:25 pm (UTC)
That said:
"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."

You got what the fuck was coming to you, Hostess. Good riddance.
maynardsong 16th-Nov-2012 05:26 pm (UTC)
Sucks about the loss of jobs, but THIS accounts just as much for people wanting to eat less junk food as does any perceived self-righteousness. Hostess' shenanigans? Supported by the sale of every Twinkie eaten.
Good fucking riddance to Hostess TBH
jeterluva 16th-Nov-2012 05:33 pm (UTC)
I thought they already went out of business a while ago.
tabaqui 16th-Nov-2012 05:34 pm (UTC)
Huh. Could have sworn i heard about this a couple years ago or something.... Maybe i'm thinking of something else.

Sucks for the people who work there.
ultraelectric 16th-Nov-2012 05:55 pm (UTC)
I think a year or two ago they started selling their items to other companies (for those companies to produce and sale)... that might be what your thinking of.
lone_concertina 16th-Nov-2012 05:36 pm (UTC)
8% wage cut, reduced health benefits, frozen pension payments. Good fucking riddance.
skellington1 16th-Nov-2012 06:48 pm (UTC)
Eeek, yeah.
kaelstra 16th-Nov-2012 06:01 pm (UTC)
This pics are killing me
effervescent 16th-Nov-2012 05:40 pm (UTC)
I'd say good riddance, except... that's a lot of jobs. :/ I hope those people find work.
mollywobbles867 16th-Nov-2012 05:49 pm (UTC)
+1 The owners will be fine financially, but the workers are screwed. The story of America.
little_rachael 16th-Nov-2012 05:51 pm (UTC)
Well, that sucks. Wonder Bread was my favorite bread ever since my grocery store stopped carrying Pantry Pride.

But still, good riddance to them if that's how they were treating their workers. They brought it on themselves.

I wish the union members the best of luck in finding new jobs.
butterbuns 16th-Nov-2012 05:57 pm (UTC)
Agreed. It's always been my favorite for grilled cheese, so that's a bummer.
hippie_chick 16th-Nov-2012 05:53 pm (UTC)
I don't mourn the loss of overly sugary, diabetes inducing, preservative laden snack cakes. I do think the loss of all those jobs in this is the worst thing.
satellite__eyes 16th-Nov-2012 05:54 pm (UTC)
Does this mean Drake's is going too?!

Anyways, Tastykake >>>>> all
keeperofthekeys 16th-Nov-2012 05:55 pm (UTC)
Ah yes, another union destroys a company. How dare they demand fair wages and good treatment! Workers are irrelevant to a company's success, good company management has nothing to do with them, and if a company can exist AND treat its employees like shit then they should be allowed to! If people don't like those shitty jobs, they can magically find others and the company will go under naturally. Argle bargle, etc etc.
ultraelectric 16th-Nov-2012 06:02 pm (UTC)
I might get hate for this, but I'm curious how much they were already making (the Union workers) I think unions are good in a lot of ways, but sometimes I hear these people demanding more money and they are already making a boot load an hour (at least what I would consider a boot load given I grew up lower middle class).

By the way, kinda laughing they were still doing Pensions, from what I've learned in business class they aren't the greatest way to go.

Very sad situation. Though, I have heard they are more an likely going to sale their products off to other companies so the product will still be out there just under new ownership (Little Debbie is prob jumping on that right as we speak lol)
halfshellvenus 16th-Nov-2012 06:53 pm (UTC)
The unions were protesting having their wages and benefits CUT though, not that there wasn't an increase.

I'm surprised the Teamsters agreed to it, but not surprised that the other union did not.
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