IRVING, Texas — One of America’s most iconic brands has fallen victim to the poor economy and a crippling strike by unionized workers. After more than eighty years in operation, Hostess Brands Inc. has filed a motion in bankruptcy court to close its business and sell its assets.“We are sorry to announce Hostess Brands, Inc. has been forced by a bakers-union strike to shut down all operations and sell all company assets,” reads a statement on the company’s website.
The company, which had been making 500-million Twinkies and 127-million loaves of Wonder Bread annually, has been negotiating with striking members, unions, lenders and other stakeholders to reach a resolution on legacy costs and other issues. Hostess gave bakers — members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) — a 5 p.m. Thursday deadline, asking them to return to work or face a company closure.
“We deeply regret today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” says Gregory F. Rayburn, CEO, Hostess. “Hostess Brands will promptly lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”
The wind down means the closure of 33 bakeries, 565 distribution centres, more than 5,000 delivery routes and 570 bakery outlet stores throughout the United States. Delivery of products will continue and Hostess Brands retail stores will remain open for several days to sell already-baked products.
There’s hope the Texas-based company’s popular brands, including Twinkies, Cup Cakes, Ding Dongs and Sno Balls, could enjoy new life if picked up at auction and reintroduced to the market by other companies. Hostess expects great interest from bidders.