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Published On: Fri, Nov 16th, 2012

Union strike continued, Hostess likely to be liquidated

 Hostess Brands Inc., the maker of Wonder Bread and Twinkies, announced today that it will liquidate because not enough striking employees returned to work by a Thursday evening deadline set by the company.

Twinkies photo by Mamiejeanjean

“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.”

The company said employees at its 33 factories were sent home and operations suspended Friday and its roughly 500 bakery outlet stores will stay open for several days to sell remaining products.

Hostess CEO Greg Rayburn said in an interview that there was no buyer waiting to buy the company. But without giving details, he said that there has been interest in some of its 30 brands, which include Dolly Madison, Drake’s and Nature’s Pride snacks.

Rayburn said the financial impact of the strike makes it too late to save the company even if workers have a change of heart. That’s because the company was operating on thin margins and stalling production meant the loss of critical sales.

“The strike impacted us in terms of cash flow. The plants were operating well below 50 percent capacity and customers were not getting products,” Rayburn said.

Hostess, based in Irving, Texas, filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade, as it struggled with increased competition, Americans’ move toward healthier eating and the high pension, wage and medical costs related to its unionized workforce.

 

 

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- Writer and Co-Founder of The Global Dispatch, Brandon has been covering news, offering commentary for years, beginning professionally in 2003 on Crazed Fanboy before expanding into other blogs and sites. Appearing on several radio shows, Brandon has hosted Dispatch Radio, written his first novel (The Rise of the Templar) and completed the three years Global University program in Ministerial Studies to be a pastor. To Contact Brandon email [email protected] ATTN: BRANDON

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  1. Hostess on comeback trail; Panel calls for end to World Bank ranking – Washington Post | Dailynewsupdates.org says:

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