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Workers, company react to Hostess going out of business

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November 16, 2012|By Chris Durden & John Boyd | KWCH 12 Eyewitness News

(EMPORIA, Kan.) — Hostess is going out of business. The company, which has a bakery in Emporia, is the maker of long-standing brands such as Twinkies, Ding Dongs and Wonder Bread.

According to a post on a company website, Hostess Brands, Inc. says it is winding down operations and has filed a motion with the U.S. Bankruptcy Court asking for permission to close its business and sell its assets. 

Bakery operations are suspended at all plants.

Former workers at the plant in Emporia say they're okay with how things turned out.  They tell us the company betrayed them by taking away their pensions.  They say they passed up on pay raises in the past in exchange for building their retirement pay.

They hope a new company buys the plant and hire them back. 

The company says delivery of products will continue and Hostess Brands retail stores will remain open for several days so they can sell off already-baked products.

The Board of Directors authorized the wind-down in order to preserve and maximize the value of the estate after one of the company's largest unions initiated a nationwide strike.


The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike last weekend.  The company shut down three plants and said it would liquidate if they didn't have enough employees return to work by Thursday afternoon. 

"We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike," said Gregory F. Rayburn, chief executive officer. "Hostess Brands will move promptly to 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 centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the US.

Hostess Brands says it will sell its popular brands, including Hostess, Drakes and Dolly Madison, which make iconic cake products such as Twinkies, CupCakes, Ding Dongs, Ho Ho’s, Sno Balls and Donettes. Bread brands to be sold include Wonder, Nature’s Pride, Merita, Home Pride, Butternut, and Beefsteak.

The company set up a website for workers whose jobs are being eliminated and says most employees who lose their jobs should be eligible for unemployment benefits.


Original Story, November 15

Hostess Brands CEO warned the company will liquidate unless striking workers returned to the job by the end of the day on Thursday. Now, that four o'clock Central Time deadline has come and gone.

"We simply do not have the financial resources to survive an ongoing national strike," Gregory Rayburn said in a statement on Wednesday.

Hostess has not made any official announcement beyond the CEO's statement. Any update on liquidation would come on Friday.

Eyewitness News has learned insurance, health and welfare benefits for striking workers have been canceled.

Workers are protesting a contract imposed by a bankruptcy court. The contract calls for an 8 percent pay cut in addition to health care and pension changes. The bakers union has called the contract "outrageous."

A liquidation would result in some 18,000 workers losing their jobs and an uncertain future for American icons Twinkies, Ding Dongs and Wonder Bread.

Over the weekend, workers in the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, or BCTGM, went on strike at Hostess-owned plants in several states. The strike includes workers at the Dolly Madison plant in Emporia, Kansas.

Hostess filed for bankruptcy in January, the second time it has done so since 2004.

Union employees in Emporia say in August of last year the company stopped giving them their pension earning. They say it now wants to cut wages by eight percent.

"You put in the time, you put in the years, I mean, we all have dedicated our lives to the company and they just don't appreciate it," said one striking worker.

Steven Blakey says he he was looking forward to retiring from the company. He says what's going on now hurts not just him, but his family as well.

"I spent 30 years of my life, missed a lot of time with my family, now it's time for me to enjoy that time and I have to keep working, I'm missing out on a lot." said Blakey.

The Dolly Madison plant in Emporia is one of the city's largest employers.

On Tuesday, Hostess said it will permanently close bakeries in Seattle, St. Louis and Cincinnati. Those three plants employ 627 people combined. The strike is impacting 24 of Hostess' 33 plants.

If a resolution is not reached, Hostess said it will file the motion to liquidate Friday followed by a hearing on Monday. If the bankruptcy court approve the liquidation, Hostess could begin closing operations on Tuesday.

Hostess has been around since 1930. In addition to labor issues, the company also faces ever-growing competition and an American public who are becoming more health conscious.

Hostess brands include Wonder, Nature's Pride, Dolly Madison, Drake's, Butternut, Home Pride and Merita.

Hostess' future in jeopardy.
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