PEAK PUTTERS

Hostess Brands is Closed.

We are sorry to announce that Hostess Brands, Inc. has been forced by a Bakers Union strike to shut down all operations and sell all company assets. For more information, go to hostessbrands.info. Thank you for all of your loyalty and support over the years.


HOSTESS BRANDS TO WIND DOWN COMPANY AFTER BCTGM UNION STRIKE CRIPPLES OPERATIONS

Friday, November 16, 2012 at 7:00AM

Irving, TX – November 16, 2012 – Hostess Brands Inc. today announced that it is winding down operations and has filed a motion with the U.S. Bankruptcy Court seeking permission to close its business and sell its assets, including its iconic brands and facilities. Bakery operations have been suspended at all plants. Delivery of products will continue and Hostess Brands retail stores will remain open for several days in order to sell already-baked products.

The Board of Directors authorized the wind down of Hostess Brands to preserve and maximize the value of the estate after one of the Company’s largest unions, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), initiated a nationwide strike that crippled the Company’s ability to produce and deliver products at multiple facilities.

On Nov. 12, Hostess Brands permanently closed three plants as a result of the work stoppage. On Nov. 14, the Company announced it would be forced to liquidate if sufficient employees did not return to work to restore normal operations by 5 p.m., EST p.m., Nov. 15. 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 BCTGM in September rejected a last, best and final offer from Hostess Brands designed to lower costs so that the Company could attract new financing and emerge from Chapter 11. Hostess Brands then received Court authority on Oct. 3 to unilaterally impose changes to the BCTGM’s collective bargaining agreements.

Hostess Brands is unprofitable under its current cost structure, much of which is determined by union wages and pension costs. The offer to the BCTGM 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,â€

There is still hope!

Actually, I think these things might be awesome for the next run. I need a twinkie baking pan.....

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Nothing like a big middle finger to the Unions

I think they were owned by a holding company anyway. That job loss is direct, and doesn't include affects on suppliers...

Way to go. Strike yourself right outa a job.

It's the union way...

I'm sure when the dust settles someone will buy the rights and start making them. Maybe Sunshine, or Nabisco??

Grumpy wrote:It's the union way...

Dave, Dave, Dave . . .

I knew this thread would go here eventually. If Hostess was suddenly "forced" out of business by a union strike, then why have they been in the financial toilet for so long? A guy doesn't vote to stike so he can NOT bring home a paycheck, they do it to improve working conditions, to make a decent "family" income. If a company treats their employees fairly there would be no way to get enough people to vote to strike.

That article even said "Hostess Brands is unprofitable under its current cost structure" You can't build a company on the backs of your employees. I am sad to see an icon like Hostess go under, but it is a fact of business and life, if you can't keep your head above water, your going to drowned.

The Teamsters agreed to a pay cut to save the company. The Bakers would not budge with their contract negotiations.

Everything they bake leaves a greasy film on the roof of my mouth. Maybe the Bakers should have started by fixing that!

No big loss for the product, I can't eat that junk now anyway.

But, I am sad that many will loose their jobs.

Okay, you make good points overall, but I'm still curious about some of the backstory we may not be hearing. The current cost structure comment may have as much to do with raw material costs, as with the union's possible alleged recalcitrant attitude. No, I'm not that much of a union fan for the most part, but at times they do have their place. It also could depend on just who the rapacious bastids are that have control of the holding company that's supposed to be involved. If it's a work of art like Carl Icahn, then this is down to the level I'd expect.

Seems like there is in fact two sides to the story...

The company has been in the toilet since 2005 when it was bought by a venture capitalist company. Lots of poor management over the years. EDIT: I will also add there were 6 CEO's in the last 8 years.

The union agreed to an 8% pay cut in August. The Hostess CEO raised his own pay from 750,000 yearly to 2.5 million yearly this past July.

At least nine other top executives of the company also received massive pay raises, including one who received a pay increase from $500,000 to $900,000 and another received one that brought his salary from $375,000 to $656,256.

I'm for blaming both sides equally. I'm also gonna watch which company draws up plans to buy the Hostess Brands and buy some stock.

If the 8% pay cut was across the entire 18,500 workforce, that would be $50-$75 MILLION DOLLARS! If that don't fix the hole in Yer boat, nothing will!!!

Well now, that little bit of info could affect how a guy looks at the situation BTW, Hoser, I have some not so pleasant thoughts on management as well...

I know, your just a equal opportunity Grumpster

Don't like your working conditions or pay then vote in a union and threaten to strike. Stupid people are funny. In the real world if you don't like your job you hike up your skirt and find a new job... Suck that union peter kids it works out so well so often.

Roman wrote:If the 8% pay cut was across the entire 18,500 workforce, that would be $50-$75 MILLION DOLLARS! If that don't fix the hole in Yer boat, nothing will!!!

That's right. . .NOTHING would fix it. Best thing in the World for the brand is to close up shop and sell off the IP and assets to the highest bidders. I'd imagine that Nestle' is waiting in the wings to get a bargain.

There is a formula to determine brand value and an equation to balance it with revenue. Twinkie and HoHo is worth something. . .a LOT of something. Somebody'll buy it up.

I'd buy the license to sell Twinkies in Colorado and Washington state right now. Who has the rights to Mallomars?

I completely quit buying any Hostess stuff once I found Little Debbie.

And Little Debbie is a privately held company.