Could it be the end to the sweet treats many have loved for decades? Friday, Irving-based Hostess announced they were going out of business after filing a motion with the U.S. Bankruptcy Court.
The maker of Twinkies, Dingdongs and Wonder Bread said the company simply couldn’t survive with striking workers still on the picket line.
“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Hostess CEO Gregory F. Rayburn said in announcing that the firm had filed a motion with the U.S. Bankruptcy Court to shutter its business. “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.”
With the shutdown, 18,5000 employees will lose their jobs. The business has officially filed for bankruptcy. Thousands of workers have just learned that they’re unemployed right before the holidays.
“This is it,” Rayburn said. "This is the end to Hostess and the iconic products people have enjoyed since 1930."
In announcing its decision, Hostess said its wind down would mean the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores in the United States.
“They’ve been around forever. They’ve been around longer than I have. My mom loved the treats, obviously I love the treats, my kids love the treats, I might love a few too many of the treats,” said Stacy Kiss, a customer at a Hostess Outlet store.
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Rayburn said he couldn’t have been more serious when he told striking members of the bakers union that they needed to get back to work by 5 p.m. Thursday, or the company would be forced to shut down.
"The bakers union, I think the leadership, made the decision that they’re willing to sacrifice these jobs,” says Rayburn.
Thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike last week after rejecting in September a contract offer that cut wages and benefits. Hostess had already reached a contract agreement with its largest union, the International Brotherhood of Teamsters.
It’s not only the 5,000 members of the bakers union losing their jobs, it’s nearly all of Hostess’ 18,500 employees across the country including about 100 workers in the Dallas-Fort Worth area.
“I don’t see why America’s going to let 18,000 jobs go out of here. With a good name like Hostess, it’s crazy. The fat cats keep getting fatter,” said Todd Moore, Hostess employee.
Hostess already shutdown three bakeries this week and will stop production at the rest of the three dozen plants immediately, lay off its workers, and put its beloved brands up for sale.
“Now we can’t even get bargain priced snack cakes,” said Kiss.
Workers say bad management is to blame for the downfall of the business. The Irving-based company filed for bankruptcy twice in the last decade. Its sales struggled, in a battle beyond labor costs, as customers have become more conscious about healthier eating.
“In this situation, there’s blame that goes around for everyone,” said Rayburn.
Right now, Hostess is working with employees on severance packages. A bankruptcy hearing is set for Monday.
The company, founded in 1930, was fighting battles beyond labor costs. Competition is increasing in the snack space and Americans are increasingly conscious about healthy eating. Hostess also makes Dolly Madison, Drake's and Nature's Pride snacks.
The sentimental snacks may not go away forever. Analysts have already started tossing around names of possible buyers of the Hostess brands including Bimbo Bakeries, Flower Foods and McKee Foods, all of which produce bakery items under a variety of brand names.
