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Hostess, the maker of Twinkies and Wonder Bread, plans to go out of business, lay off its 18,500 workers and sell its snack cake and bread brands.

The Irving, Texas, company said a nationwide strike crippled its ability to make and deliver its products, which also include Ding Dongs, Ho Ho’s and Home Pride bread.

Hostess suspended bakery operations at all its factories and said its stores will remain open for several days to sell already-baked products.

The company had warned employees that it would file a motion in U.S. Bankruptcy Court to unwind its business and sell assets if plant operations didn’t return to normal levels by Thursday evening. The privately held company filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade.

“Many people have worked incredibly long and hard to keep this from happening, but now Hostess Brands has no other alternative than to begin the process of winding down and preparing for the sale of our iconic brands,” CEO Gregory F. Rayburn said in a letter to employees posted on the company website.

He added that all employees will eventually lose their jobs, “some sooner than others.”

“Unfortunately, because we are in bankruptcy, there are severe limits on the assistance the (company) can offer you at this time,” Rayburn wrote.

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 said Friday the company is unprofitable “under its current cost structure, much of which is determined by union wages and pension costs.”

A union representative did not immediately return a call from The Associated Press seeking comment on the company’s announcement.

Hostess has said that production at about a dozen of the company’s 33 plants has been seriously affected by the strike. Three plants were closed earlier this week.

Hostess had already reached a contract agreement with its largest union, the International Brotherhood of Teamsters.

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.

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The new contract cuts salaries across the company by 8% in the first year of the five-year agreement. Salaries then bump up 3% in the next three years and 1% in the final year.

Hostess has also reduced its pension obligations and its contribution to the employees' health care plan. In exchange, the company offered concessions including a 25% equity stake for workers and the inclusion of two union representatives on an eight-member board of directors.

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Originally posted by Jongsstraw:
There's been much baking industry consolidation going on for decades. Hostess brands are too powerful to ever disappear entirely. I grew up on Devil Dogs, Twinkies, Yodels, and Snowballs. Back in Jr. HS thru HS those items sold for 5-10 cents, and often my friends and I didn't have the money.

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Originally posted by Jongsstraw:
There's been much baking industry consolidation going on for decades. Hostess brands are too powerful to ever disappear entirely. I grew up on Devil Dogs, Twinkies, Yodels, and Snowballs. Back in Jr. HS thru HS those items sold for 5-10 cents, and often my friends and I didn't have the money.

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Hostess is in bankruptcy for the second time in recent years. Workers took concessions just a few years ago and this year the company has stopped making its contractually obligated contributions to their pensions. Meanwhile the company's CEO got a 300 percent raise, from $750,000 to $2,250,000, while other top executives got raises of hundreds of thousands of dollars apiece.

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Originally posted by CaveTroll:
But think of the poor, poor stoners!!!

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Originally posted by Jongsstraw:
There's been much baking industry consolidation going on for decades. Hostess brands are too powerful to ever disappear entirely. I grew up on Devil Dogs, Twinkies, Yodels, and Snowballs. Back in Jr. HS thru HS those items sold for 5-10 cents, and often my friends and I didn't have the money.

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Those rat bastards at Hostess took over Drake's Cakes. I'll never forgive them for what they did to Funny Bones!

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Oh, Suzy Q! Don't Be A Ding Dong And Believe The Ho Hos!


As the gentle reader most likely knows by now, the executives of Hostess has decided that they sucked all the money they could out of the company and the workers and shut down all of their operations immediately.

Just like that, more than 18,000 were put out of work.

The failure of a CEO, Gregory F. Rayburn, immediately blamed the unions in his announcement of the shutdown.

The corporate media ran with it. Radio squawkers parroted this. The echo chamber mindlessly repeated it as gospel truth.

Of course it was easier for those without critical thinking skills to repeat the talking points that unions are bad instead of actually looking at the facts for themselves. That might lead to some inconvenient and uncomfortable truths.

Things like the unions were not the only problem, or even the primary one:
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.

Click to embiggen
Of course, while union members were being told - not even asked, but told - to make even greater concessions than they already had made, the executives were completely blameless. Well, not really:
Over the past eight years since the first Hostess bankruptcy, BCTGM members have watched as money from previous concessions that was supposed to go towards capital investment, product development, plant improvement and new equipment, was squandered in executive bonuses, payouts to Wall Street investors and payments to high-priced attorneys and consultants.

BCTGM members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.

Over the past 15 months, Hostess workers have seen the company unilaterally end contractually-obligated payments to their pension plan. Despite saving more than $160 million with this action, the company continues to fall deeper and deeper into debt. A mountain of debt and gross mismanagement by a string of failed CEO's with no true experience in the wholesale baking business have left this company unable to compete or survive.
The clearest story of the real course of events comes from who else but a worker that lived through this nightmare roller coaster:
The company of course used it's 'oops' letter to justify asking for concessions from the Union. We gave nothing and gained nothing that year after a 45 minute strike. The status quo continued and I proudly joined the middle class for the first time in my life. I made $14 an hour and had insurance. I even went on vacations for the first time. I had great pride in my job, and the products. We bought a new car for the first and only time in my life. In 2003 I transferred to the Lenexa, KS bakery.

In 2005 it was another contract year and this time there was no way out of concessions. The Union negotiated a deal that would save the company $150 million a year in labor. It was a tough internal battle to get people to vote for it. We turned it down twice. Finally the Union told us it was in our best interest and something had to give. So many of us, including myself, changed our votes and took the offer. Remember that next time you see CEO Rayburn on tv stating that we haven't sacrificed for this company. The company then emerged from bankruptcy. In 2005 before concessions I made $48,000, last year I made $34,000. My pay changed dramatically but at least I was still contributing to my self-funded pension.

In July of 2011 we received a letter from the company. It said that the $3+ per hour that we as a Union contribute to the pension was going to be 'borrowed' by the company until they could be profitable again. Then they would pay it all back. The Union was notified of this the same time and method as the individual members. No contact from the company to the Union on a national level.

This money will never be paid back. The company filed for bankruptcy and the judge ruled that the $3+ per hour was a debt the company couldn't repay. The Union continued to work despite this theft of our self-funded pension contributions for over a year. I consider this money stolen. No other word in the English language describes what they have done to this money.

After securing our hourly cash from the bankruptcy judge they set out on getting approval to force a new contract on us. They had already refused to negotiate outside of court. They received approval from the judge to impose the contract then turned it over to the Union for a vote. You read that right, they got it approved by the judge before ever showing to the Union.

What was this last/best/final offer? You'd never know by watching the main stream media tell the story. So here you go...
1) 8% hourly pay cut in year 1 with additional cuts totaling 27% over 5 years. Currently, I make $16.12 an hour at TOP rate of pay in the bakery. I would drop to $11.26 in 5 years.
2) They get to keep our $3+ an hour forever.
3) Doubling of weekly insurance premium.
4) Lowering of overall quality of insurance plan.
5) TOTAL withdrawal from ALL pensions. If you don't have it now then you never will.

Remember how I said I made $48,000 in 2005 and $34,000 last year? I would make $25,000 in 5 years if I took their offer.
It will be hard to replace the job I had, but it will be easy to replace the job they were trying to give me.
That $3+ per hour they steal totaled $50 million last year that they never paid us. They sold $2.5 BILLION in product last year. If they can't make this profitable without stealing my money then good riddance.

I keep hearing how this strike forced them to liquidate. How we should just take it and be glad to have a job. What an unpatriotic view point. The reason these jobs provided me with a middle class opportunity is because people like my father in law and his father fought for my Union rights. I received that pay and those benefits because previous Union members fought for them. I won't sell them, or my coworkers, out.
The story of Hostess is nothing but an example of capitol vultures pulling a Bain job on the company and its workers, then blaming the unions for their treachery and theft.

This is the kind of life that Mitt Romney and Paul Ryan was promoting and Scott Walker is still pushing. This is their idea of being successful and being business friendly.

Hostess would have shut down whether the unions capitulated or not. In fact, it was only the huge concessions the unions had already made that kept it around as long as this. Without those concessions, the executives would have taken the money and ran years ago.

I feel bad for the 18,000+ workers that are now without work, just before the holidays. But I don't blame them. People have to draw the line somewhere. It's just sad that there are so many so-called "patriots" that are still willing to sell out their fellow Americans for this and blame them for standing up for themselves.

For those 18,000 plus that got screwed over by the excessive greed of the executives, know that we still love you and support you.

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I don't know where he got the "Bush" thing tho'...who blamed Bush? C'mon, raise you hand(s), Rap says you blamed Bush so stand up and take your punishment like men!

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But to completely put an entire company under, because you can't take a small pay cut ? Selfish + greedy.

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Grupo Bimbo, a Mexican company that is the world's largest bread baker, might hold the key to saving the Twinkie from extinction in a Hostess liquidation.

Though other companies have shown interest in buying some of Hostess' iconic brands, Bimbo might have the inside track, according to the Christian Science Monitor.

A $10 billion sales business, Bimbo has pushed its way into the baked-goods big leagues through smart acquisitions under the leadership of CEO Daniel Servitje Montull.

In 2010, Bimbo bought the North American fresh-baked unit of Sara Lee for $959 million, according to the Associated Press, and with it, well-known brands like Entenmann's and Thomas' English Muffins.

And this isn't the first time Bimbo has tried to save Twinkies. Bimbo in conjunction with a few others made a bid for the Twinkie-maker during its first bankruptcy 2007, but Bimbo ultimately backed out, according to Forbes.

Bimbo's access to cheap Mexican sugar might also give the company an upper hand. Hostess struggled with high sugar prices in the U.S., which were tied to trade tariffs, according to NBC News. Mexican sugar could help avoid those additional costs, but would also take production -- and manufacturing jobs -- south of the border.

Labor talks between Hostess and the unions that represent most of its 19,000 workers had gone on for months before the company's decision to liquidate Friday.

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Originally posted by Kwicko:

What was this last/best/final offer? You'd never know by watching the main stream media tell the story. So here you go...
1) 8% hourly pay cut in year 1 with additional cuts totaling 27% over 5 years. Currently, I make $16.12 an hour at TOP rate of pay in the bakery. I would drop to $11.26 in 5 years.
2) They get to keep our $3+ an hour forever.
3) Doubling of weekly insurance premium.
4) Lowering of overall quality of insurance plan.
5) TOTAL withdrawal from ALL pensions. If you don't have it now then you never will.

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The new contract cuts salaries across the company by 8% in the first year of the five-year agreement. Salaries then bump up 3% in the next three years and 1% in the final year.

Hostess has also reduced its pension obligations and its contribution to the employees' health care plan. In exchange, the company offered concessions including a 25% equity stake for workers and the inclusion of two union representatives on an eight-member board of directors.

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Originally posted by AURaptor:

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I don't know where he got the "Bush" thing tho'...who blamed Bush? C'mon, raise you hand(s), Rap says you blamed Bush so stand up and take your punishment like men!

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Actually, as I said from the start, Niki, YOU blamed Bush, though w/ out actually saying him by name.

"... it's been going on all around us since America got driven into the ditch"


"The workers " are only suppose to take pay cuts for as long as they want to work there. If not, they're more than free to seek other employment. Like now, since they killed off the entire company. Bravo, " workers ". The jobs don't belong to the employees, they belong to the company. ( Or did ) If you're not keen with getting paid 30 to 40 K a year watching baked goods fly by you on a conveyor belt, then hey, maybe Hostess wasn't a job for you in the first place. But to completely put an entire company under, because you can't take a small pay cut ? Selfish + greedy.

" I do not love the bright sword for its sharpness, nor the arrow for its swiftness, nor the warrior for his glory. I love only that which they defend. "

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Originally posted by Kwicko: while you fuck them out of their jobs and pensions.

Truly a typical dick move by yet another bunch of greedy vulture capitalists.

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Originally posted by AURaptor:
Excuse me.. WHOSE jobs ? They're not the worker's jobs, they belong to the company, NOT the employees.

Don't like working for greedy vulture capitalists ? Fine. Go work for the govt. Go work for yourself. But don't for a second buy into the fairy tale that the jobs BELONG to the employees.

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Originally posted by AURaptor:
The union killed Hostess, not the employees. The company does not exist for the benefit of the unions. No company does.

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Originally posted by Jongsstraw:
This is a case where one union took down another union. Most of the 18,500 were Hostess Teamsters who were ready to go back to work, but they got screwed out of their jobs when the Bakers union refused to do the same. I guess they'll all be holding hands in union brotherly love on the unemployment line, or they'll kill each other.

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Originally posted by AURaptor:
The union killed Hostess, not the employees. The company does not exist for the benefit of the unions. No company does.

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Originally posted by Jongsstraw:
This is a case where one union took down another union. Most of the 18,500 were Hostess Teamsters who were ready to go back to work, but they got screwed out of their jobs when the Bakers union refused to do the same. I guess they'll all be holding hands in union brotherly love on the unemployment line, or they'll kill each other. Jimmy Hoffa must be rolling over in his cement pillar.

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Originally posted by Niki2:
Aside from which, the idea that the unions wouldn't concede yet again, given the facts presented by the article Mike posts, isn't logical. To see one's salary cut again and again, while forced to accept higher and higher investments on the worker's part (which is essentially a FURTHER pay cut), isn't logical.

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Originally posted by Jongsstraw:
The days of exploitive robber barons like Carnegie, Mellon, Rockefeller, and others are long gone.

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Originally posted by Jongsstraw:

The days of exploitive robber barons like Carnegie, Mellon, Rockefeller, and others are long gone. Unions had a purpose and were necessary back then, but over time the Federal Govt. took on that role and became the protector and enforcer of workers' rights. Today there are Federal and State laws protecting workers in regards to child labor, overtime pay, maternity leave, equal opportunity, worker's comp. disability, racial bias, pay parity, OSHA safety, minority bias, sexual harassment, etc etc etc.

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Originally posted by m52nickerson:

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Originally posted by AURaptor:
The union killed Hostess, not the employees. The company does not exist for the benefit of the unions. No company does.

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...and who makes up the unions?

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Originally posted by Kwicko:
Do you have any cites to back your claim that unions are "forcing employees to join"?

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Originally posted by Kwicko:
Do you have any cites to back your claim that unions are "forcing employees to join"?

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Originally posted by AURaptor:
Your tedious claim of 'cites', is nothing more than a clear attempt to distract from the issue at hand.

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