Hostess, maker of Twinkies, to go out of business; strike cited

NEW YORK — Twinkies may last forever, but the same can’t be said for the company that makes the cream-filled sponge cake. Hostess Brands Inc., the company that makes Twinkies and Wonder Bread, has asked a judge for permission to go out of business and lay off 18,500.

The company is blaming its decision to shut down on a labor strike by members of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, but Americans’ appetite for junk food has been waning in recent years. The company has filed for bankruptcy twice this decade, the last time in January.

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Gregory F. Rayburn, Hostess’ chief executive, said in a statement.

Many businesses have faced labor unrest in the recovery from the recession as they try to dial back benefits and wages and unions resist. In 2011, for example, there were 19 major strikes and lockouts involving more than 1,000 workers, according to the Bureau of Labor Statistics, up from 11 in 2010. The 2011 strikes accounted for 1.02 million lost workdays.

The union said in a statement that Hostess made unreasonable demands, including wage and benefit cuts of around 30 percent for workers, while top executives of the company received large pay increases.

“The crisis facing Hostess Brands is the result of nearly a decade of financial and operational mismanagement that resulted in two bankruptcies, mountains of debt, declining sales and lost market share,” said union President Frank Hurt. “The Wall Street investors who took over the company after the last bankruptcy attempted to resolve the mess by attacking the company’s most valuable asset — its workers.”

Hostess, based in Irving, Texas, has 565 distribution centers around the country, as well as 33 bakeries and 570 bakery outlets. The union says 24 production facilities are currently on strike.

It said it had filed a motion with U.S. Bankruptcy Judge Robert Drain in White Plains, N.Y., for permission to shut down and sell assets.

The company’s brands include Twinkies, Drake’s and Nature’s Pride. It also makes Wonder bread, which was America’s first sliced bread, according to the company’s website.

It plans to sell its assets to the highest bidders.

More in Herald Business Journal

An Alaska Airlines Embraer 175. The carrier plans to use this model on routes to and from Paine Field in Everett. (Alaska Airlines)
Alaska Airlines hopes to be a decent neighbor in Everett

Diana Birkett Rakow shared aspects of the company’s philosophy as keynote at an Economic Alliance event.

Aerospace supplier MTorres is taking off in Everett

Spanish company has received nearly $40 million in new projects since opening near Boeing in Everett.

US manufacturers have produced 150 million guns since 1986

The vast majority of all U.S.-produced firearms were sold domestically.

Safe saves Everett Office Furniture’s future after fire

The business was able to reopen because vital paperwork was preserved.

Economists: Trump’s infrastructure math off by 98 percent

One study found that states increase total spending by $1.06 for every federal dollar received.

More than 60 Boeing 737s per month: Can suppliers keep up?

There was lots of talk this week about the prudence and pressures of soaring production rates.

Developer proposes an 18-story building in Lynnwood

It would be the second-tallest in the county and include apartments with retail space.

Snohomish County business licenses

PLEASE NOTE: Business license information is obtained monthly from the Washington Secretary… Continue reading

New Everett mayor speaks out about business in city, region

Q&A: Cassie Franklin on what can be done to get Boeing to build the 797 here and attract new industries.

Most Read