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Blog: Hostess Shrugged

Hostess Brands closing its doors.

Hostess Brands, maker of such iconic products such as Twinkies, Wonder
Bread, Ding Dongs and Drake's Devil Dogs has asked Federal Bankruptcy Court for permission to close all its operations.  In September the teamsters union accepted a new contract with reduced wages.  The baker's union, however, rejected a new contract offer which would have reduced their salaries by 8% in the first year, increased wages by 3% for the next three years and increased them by 1 % in the final year.

CEO Gregory Rayburn claimed the company does not have enough assets to
endure a protracted strike by the bakers despite annual sales of $2.5 billion.
Hostess currently employs 18,500 workers, 33 bakeries, 565 distribution
centers and 570 outlets.  Frank Hurt, representing the baker's union charged that the company has been mismanaged but offered no compromise or solution.  Undoubtedly parts of the company, certain brands, will be sold at auction in the
future.

For now, time to say goodbye.

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Bob Blanchard November 17, 2012 at 09:13 AM
What a bummer. I love all their products including the oft overlooked orange cupcakes. Sadly, as the State of California can testify, the cost of meeting union contract demands has created such a burden on companies and governments that they are going broke. Can't blame the unions, they took advantage of negotiating boffo deals and now they are coming home to roost. As Mr. Bauer said, there will be others, but in the meantime what am I going to do for my sweet tooth? Nobody made goodies like Hostess.
Ilona Saari November 17, 2012 at 07:22 PM
I have to laugh at Hostess' claims - if management hadn't mismanaged, there'd be no problem from all I've read re: the financials, etc... but hey, look at the bright side - everyone's health will benefit. A teacher I know has had an unwrapped twinkie in her classroom for 30 years and it's still soft to the touch. That's saying something very scary about that product. ;o)
Irene DeBlasio November 18, 2012 at 05:38 AM
@William @Bob @Ilona I must admit I've never been a big fan of Hostess. None of their products were in my home when I was growing up. My next-door neighbor's Mom used Wonder Bread (she cut off the crust) when she made lunch for my best friend Audrey and me. She opened a small can of deviled ham, mixed in a little mayo and give us a small platter of sandwiches for lunch -- with two glasses of milk. My lament is not about the products. It's about the jobs being lost. Hostess Brands closing down means 18,500 people are out of a work. The related job losses (bakeries, outlets, distribution) are a tragic story in a bad economy. I suppose if I had a job at Hostess I would probably be willing to take a pay cut in order to keep the job.
Fritzi November 18, 2012 at 03:00 PM
I've always loved Hostess as has my entire family and extended family. It's such a shame! What will my son-in-law ever do without his Twinkies? I agree, however, that I would rather take a pay cut than lose my job. Sad!
Irene DeBlasio November 18, 2012 at 03:12 PM
@Fritzi Sadly, the economic forecast looks bleak. More big companies are considering closing down -- laying off a percentage of the work force is not saving them enough money for expansion. There's no clarity and unless something is done about the taxcode, business will suffer. Unions may strike but companies can't just print more money. "Fiscal cliff" will probably be another case of kicking the can down the road. Our grandchildren will be stuck with the bill.

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