Hostess Foods announced today that after being unable to come to an agreement in their ongoing labor dispute, they’re going to have to start liquidating everything. Does mean the end of Twinkies?
Hostess Brands Inc., which makes Ding Dongs, Wonder Bread and other snacks, filed a motion Friday with U.S. Bankruptcy Court seeking permission to shutter its operations. The move comes after the company said striking workers across the country crippled its ability to maintain production.
The closing would mean the loss of about 18,500 jobs. The company said employees at its 33 factories were sent home and operations suspended Friday and its roughly 500 bakery outlet stores will stay open for several days to sell remaining products.
Hostess CEO Greg Rayburn said in an interview that there was no buyer waiting to buy the company. But without giving details, he said that there has been interest in some of its 30 brands, which include Dolly Madison, Drake’s and Nature’s Pride snacks.
Rayburn said the financial impact of the strike makes it too late to save the company even if workers have a change of heart. That’s because the company was operating on thin margins and stalling production meant the loss of critical sales.
“The strike impacted us in terms of cash flow. The plants were operating well below 50 percent capacity and customers were not getting products,” Rayburn said.
Hostess, based in Irving, Texas, filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade, as it struggled with increased competition, Americans’ move toward healthier eating and the high pension, wage and medical costs related to its unionized workforce.
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