Hostess Foods in Liquidation after Labor Dispute

Hostess Brands is now going out of business and 18,500 workers are unemployed after six days of striking at more than 20 plants. With the company in Chapter 11 (for the second time since 2004), Hostess had asked employees to make concessions in order to stay in business, giving workers until 5:00pm yesterday to resume work. In court, they won the right to make these changes. “We simply do not have the financial resources to survive an ongoing national strike,” Hostess Chief Executive Gregory Rayburn said in a statement. The Teamsters have accepted Hostess’ offer for their workers, but the bakers’ union was completely unwilling to do so.

The company, which is now 82 years old, has been battling the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union The union employs around 5,000 Hostess‘ 18,500 employees. The 300 plus workers who are on strike were been told that, if they did not return to work by 5:00 yesterday, they would be out of a job.  In that case, work would cease as early as Tuesday for some companies.  

These 300 workers have now forced all Hostess workers to become unemployed. Before liquidation, Hostess had already been forced to close 36 bakeries due to the strike, leaving 627 workers unemployed in Seattle, St. Louis, and Cincinnati. Bakers’ union president Frank Hurt is unwilling for the union to take responsibility for their actions “Our members are on strike because they have had enough,” bakers’ union president Frank Hurt said. “They are not willing to take draconian wage and benefit cuts on top of the significant concessions they made in 2004 and give up their pension so that the Wall Street vulture capitalists in control of this company can walk away with millions of dollars.” As a privately held company, financial information is not publicly available. 

Hostess saw things very differently. “We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Chief Executive Gregory Rayburn said. “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.”  

However, Hostess fans need not despair completely. it is possible that popular names such as Twinkies, Ding Dongs, and Wonder Bread will still live on as they would likely be bought by another company.