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Issue Date: Vol. 52, No. 12, December 2012, Posted On: 11/15/2012

Hostess Says Strike Could Force Liquidation, Closes Three Plants

Emily Jed
TAGS: vending, vending machine products, Hostess Brands, Hostess bakers union strike, Hostess bankruptcy, Twinkies, Ding Dong, Hostess bakery closures, Gregory F. Rayburn

IRVING, TX -- A nationwide strike by Hostess Brands' bakers union has forced the bankrupt Twinkies and Ding Dong maker to permanently close three bakeries and may ultimately lead to its demise.

The Irving, TX, baked goods company said the strike has prevented it from producing and delivering products and that it is closing bakeries in Seattle, St. Louis and Cincinnati. Hostess, which has 36 plants nationwide, said customers will not be affected by the closures.

"We deeply regret this decision, but we have repeatedly explained that we will close facilities that are no longer able to produce and deliver products because of a work stoppage -- and that we will close the entire company if widespread strikes cripple our business," said Hostess Brands chief executive Gregory F. Rayburn.

The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents 80,000 workers, began its walkout on Nov. 9 when Hostess imposed a contract, which the union rejected in September, that would cut wages by 8%, suspend pension payments and cut healthcare benefits.

"A widespread strike will cause Hostess Brands to liquidate if we are unable to produce or deliver products," Hostess said in a statement. "If that's the case, the company will move promptly to lay off most of its 18,300-member workforce and focus on selling its assets to the highest bidders. We know the concessions are tough, but it would make more sense for unhappy employees to simply leave the company voluntarily than to strike and cause the company to close down, forcing everyone to lose their jobs."

The Irving, TX, company, filed for Chapter 11 bankruptcy in January 2012, nearly three years after its predecessor, Interstate Bakeries, emerged from its own bankruptcy proceedings.

In September, after months of negotiations, Hostess made what it called its "last, best offer" to its two largest unions as part of its plan to emerge from bankruptcy. The International Brotherhood of Teamsters accepted the proposed agreement, but the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union rejected it by 92%. In response, Hostess asked the bankruptcy court to impose the Teamsters-approved changes on the bakers' union members. | SEE STORY

Hostess filed its reorganization plan with the U.S. Bankruptcy Court for the Southern District of New York last month. | SEE STORY

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