Hostess Brands and Bakers Union Fail To Reach Agreement, Company Moves To Liquidate Assets
Hostess Brands, the manufacturer of Twinkies, Ding Dongs and Wonder Bread, announced, that even with a mediator’s help, it was unable to come up with a new labor agreement with its bakery workers union. Union officials say the company indicated it would move forward with its plans to liquidate the business.
Bakers Union secretary-treasurer David Durkee said the mediation was over.
Hostess, which has been in business for 82 years, said it would not comment further on the matter until after an 11 am. hearing in bankruptcy court in New York. On Monday, Judge Robert D. Drain told the parties he wanted the two sides to get together with a mediator, hoping the company and the union narrow their difference, thereby saving 18,500 jobs.
The announcement from Hostess came four days after the company announced it would reduce its operations after the Nov. 9 strike involving the bakery workers at two-thirds of its 33 bakeries.
Hostess first filed for bankruptcy in January, and has been stipulating since then that the labor costs are not supportable and the company would have to reduce costs in pensions, health and wages to keep its doors open. However, the bakery workers’ union disagreed with the company, saying it was not being managed well and it would face liquidation in a couple of years even if they were to accept the new agreement.
What does that mean for Hostess now? It means consumers can say good-bye to their favorite snack foods and Wonder Bread for now. Although Hostess is going out of business, these favorites are likely to get a reprieve from buyers. Hostess said there are several possible buyers for the brands. Despite a decline in sales the last several years, the company still generates $2.5 billion annually. To date, Twinkies has made $68 million.
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