Hostess to close, cites nationwide worker strike

[November 16, 2012]  IRVING, Texas (AP) -- Hostess, the maker of Twinkies and Wonder Bread, is going out of business, closing plants, laying off its 18,500 workers and putting its brands up for sale.

The Irving, Texas, company said a nationwide worker strike crippled its ability to make and deliver its products. Its brands also include Ding Dongs, Ho Ho's and Dolly Madison.

Hostess had warned employees that it would file a motion in U.S. Bankruptcy Court to unwind its business and sell assets if plant operations didn't return to normal levels by Thursday evening. The privately held company filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade.

"Many people have worked incredibly long and hard to keep this from happening, but now Hostess Brands has no other alternative than to begin the process of winding down and preparing for the sale of our iconic brands," CEO Gregory F. Rayburn said in a letter to employees posted on the company website.

He added that all employees will eventually lose their jobs, "some sooner than others."

Thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike last week after rejecting in September a contract offer that cut wages and benefits. Hostess had already reached a contract agreement with its largest union, the International Brotherhood of Teamsters.

Hostess has said that production at about a dozen of the company's 33 plants has been seriously affected by the strike. Three plants were closed earlier this week.

The company, founded in 1930, was fighting battles beyond labor costs. 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.

[Associated Press]

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