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Rayburn blamed Hostess' problems on high pension and labor costs that led to insufficient investment in the company and new products. Rayburn said he doesn't buy the healthy-diet explanation. "If that were the case and that was sort of the downfall, there wouldn't be any chocolate companies out there either," he said. "There's a market for Twinkies and Ho Hos and Ding Dongs." Workers represented by the Teamsters and the bakery and confectionary workers' unions voted in February to authorize a strike. Rayburn said that if workers walk off the job, the company will be forced to shut down and liquidate. Hostess wants to raise at least $400 million from current lenders or new investors or by selling brands. Rayburn said he has talked with a potential buyer of one of its small, regional brands. Before the company filed for bankruptcy protection, eight top executives got pay raises of up to 80 percent. This month, Rayburn and three others agreed to take $1 a year until the company comes out of bankruptcy or Dec. 31, whichever comes first, while the other four agreed to give up their pay raises.
[Associated
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