Hostess strikers: "Do it, shut it down"

Striking workers defy Hostess' demands - Company is expected to announce Friday whether it will follow through on threats to shut down


Production at about a dozen of the company’s 33 plants, including the longtime Indianapolis plant at Shadeland Avenue and 30th Street, has been seriously affected by the strike, said Lance Ignon, a Hostess spokesman. He said a decision on liquidating the company may not come until this morning, after it’s had a chance to assess plant operations late Thursday. “Do it, shut it down,” a woman yelled at 5 p.m. Thursday from the picket line formed at the East 30th Street gate of the Indianapolis plant. As many as 45 people in the picket line chanted, “No pension, no deal,” as they walked a tight circle in the growing cold and gathering darkness.
Comment: The WSJ has complete coverage today. Ironically the brands will probably live on (perhaps Grupo Bimbo) but 18,000 workers are on the street.


  1. Brief quote from the WSJ article:

    Hostess Brands Inc., the maker of iconic treats such as Twinkies and traditional pantry staple Wonder Bread, is shuttering its plants and liquidating its 82-year-old business.

    A victim of changing consumer tastes, high commodity costs and, most importantly, strained labor relations, Hostess ultimately was brought to its knees by a national strike orchestrated by its second-largest union.

    [on future of the brands]

    A fresh owner of the intellectual property, which includes everything from names to recipes to graphics, could revitalize the Hostess brands, which Mr. Hanft sees as weakened but not lacking potential. He raised the prospect of new flavors, limited-edition Twinkies, products co-branded with independent music groups and the potential for an international reach.

    "Its nutritional emptiness in the right hands could be its core strength," he said, explaining that a buyer that embraces the brand's "kitschy," "deliciously retro" feel could be rewarded. He foresees a potentially diverse crowd of bidders for the property.

  2. NYTimes:

    Friday’s decision may spell the end of Hostess, a company that has endured wars, countless diet fads and even an earlier Chapter 11 filing. But with the national appetite for the junk food of yore on the wane, the baked-goods maker fell on hard times.

    It sought bankruptcy protection a second time — known within restructuring circles as a “Chapter 22″ — in January and attempted to reorganize its finances, principally by cutting labor costs.

    Hostess’ advisers will soon begin to shut down the company’s 33 bakeries and 565 distribution centers.

  3. And because it is based in Irving TX, the Dallas news:

    The company has been threatening for months to shut the company down. Initially, that leverage was used to persuade the company’s 12 unions, which represent more than 80 percent of the workforce, to accept a last, best, final offer that included an 8 percent wage cut, changes in work rules and a temporary break from payments to a multi-employer pension plan.

    The Teamsters, the largest union, narrowly approved the deal. More than 90 percent of the bakers who voted said no thank you. The bankruptcy judge approved Hostess’ request to implement the contract anyway, which set in motion the strike that launched last Friday.

    On Wednesday, the company gave workers until 5 p.m. Thursday to return to work or watch the company evaporate.

    “The company determined on the night of Nov. 15 that an insufficient number of employees had returned to work to enable the restoration of normal operations,” the company said.

    “Hostess Brands is unprofitable under its current cost structure, much of which is determined by union wages and pension costs. The offer to the [bakers’ union] included wage, benefit and work rule concessions but also gave Hostess Brands’ 12 unions a 25 percent ownership stake in the company, representation on its Board of Directors and $100 million in reorganized Hostess Brands’ debt.”

    “We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” said Rayburn, a turn around expert brought in this year to guide the company through bankruptcy. ”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.”

  4. On who could buy the assets: Who Could Be Bidding on Hostess Assets.

    Mentioned: Grupo Bimbo, Flowers Foods Inc, Hillshire Brands Company .

  5. False hope: Hostess Union Clings to Hope


    union President Frank Hurt said he believed there was "more than a good chance" that a buyer quickly would swoop in to buy the profitable parts of the company and give his union's members their jobs back.


    Hostess Chief Executive Gregory Rayburn had a different vision of how the bankruptcy auction process would play out.

    "Nobody wants to have anything to do with these old plants or these unions or these contracts," Mr. Rayburn said in an interview.

    Liquidation firm Great American Group Inc. and C. Dean Metropoulos & Co., the owner of beer brands including Pabst Blue Ribbon, have signaled interest in Hostess's brands. But Mr. Rayburn said potential buyers have made clear that their interest partly is because a liquidated Hostess would be free of its collective-bargaining agreements.

    "People are excited about the brands today, but I don't know how you connect the dots" to get to a full rebirth of the company, he said, especially one that incorporates the union members who had struck. "That's beyond wishful thinking. That, to me, is just misguided." Mr. Rayburn said he expected a buyer might pick a few of Hostess's plants.

    He expressed doubt that a buyer would rehire a substantial portion of unionized workers, especially not on better terms than Hostess offered. The company's last proposal included an 8% wage cut in the first year, a 17% increase in employee health-care costs and changes to workers' pension plans that could have reduced payouts. Hostess long had said it couldn't survive without cutting labor costs.


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