Hostess to Shut Down After Failed Strike Deal
About 18,500 people will lose their jobs as Hostess, the bankrupt manufacturer of Twinkies and Wonder Bread, closes its doors upon failing to make a deal with striking bakery workers.
Representatives blame a series of incompetent executives for the company’s collapse. Thirty-three bakeries, 565 distribution centers and 570 bakery outlet stores will close around the United States. Individual product names, such as Twinkies and Ding Dongs, are likely to be auctioned by a bankruptcy court and be produced by new owners.
Workers at 24 of the company’s facilities went on strike this month as management sought to cut wages and benefits and end payments to pension plans. Workers held out through the company’s Thursday night deadline.
— Posted by Alexander Reed Kelly.
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The troubled baker’s latest owners, a collection of hedge fund investors including Ripplewood Holdings and Silver Point, blamed a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union for its decision to end its effort to emerge intact from bankruptcy court.
“We deeply regret the necessity of today’s decision, but we don’t have the financial resources to weather an extended nationwide strike,” Gregory Rayburn, chief executive, said Friday. He said the company will “promptly” lay off most of its employees and focus on “selling its assets to the highest bidders”.
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