Hostess Brands Shutting Down After Nationwide Strike

Hostess Brands announced Friday it is going out of business after strikers did not return to work Thursday.

9 a.m. update

A press release posted on Hostess Brands’ website blames members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union for the company-wide shutdown, saying picketing workers “…crippled the Company’s ability to produce and deliver products at multiple facilities.”

Workers had complained the company was asking for too many wage and benefit concessions and said they could find comparable pay elsewhere, so they were willing to hold out for a better offer from Hostess brass.

Friday’s release says since the company’s “last, best and final offer” to the union was rejected and since “an insufficient number of employees had returned to work to enable the restoration of normal operations,” the company will go forward with plans to file for the liquidation of all its assets in U.S. Bankruptcy Court under Chapter 11 of the Bankruptcy Code.

Company CEO Gregory Rayburn also penned a letter to employees calling the news of the company’s demise “disappointing” and laying the blame squarely on the union and its members.

All told, the company says the shutdown means “…the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States,” according to the release.

8 a.m. update

Protestors stood outside past five o’clock Thursday evening holding signs and waving as cars drove by the Columbus Hostess factory.  Company officials had said they would take court action to liquidate the whole company if workers didn’t return to their jobs by 5 p.m.

Hostess employees have been protesting outside the Columbus factory for almost a week.  They say a new contract makes unfair cuts to their wages and benefits.  Union Local 132 business agent, Larry Duncan has been employed with Hostess for more than 30 years.  Even though he’s unsure what’s next, he says employees can’t afford another pay cut.

“They say the company says that nobody wants to buy this plant. We’ve heard there’s buyers out there, but we don’t know. But one thing about it is if you continue to take wage concessions and concessions, we can go anywhere and make what they want to give us here. So we can just start over.”

In a statement issued Wednesday, Hostess said it plans to file a motion with the U.S. Bankruptcy court Friday to “wind-down the Company and sell all of its assets.”

Provided the motion is granted, Hostess says it could begin to close all of its operations as early as Tuesday.

Hostess did announce plans earlier this week to close plants in St. Louis, Cincinnati and Seattle because of protestors who refused to return to work.

Many Columbus employees say they think liquidation of the company could likely lead to a buyout of the brand and that the new owner would re-hire former employees.

Stan Jastrzebski contributed to this report.

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