Strike-plagued Hostess Brands may liquidate
Hostess Brands Inc. said it will probably announce this morning whether it will move to liquidate its business, after the company had set a deadline Thursday for striking employees to return to work.
The maker of Twinkies, Ding Dongs and Wonder Bread had warned employees it would file a motion in U.S. Bankruptcy Court to unwind its business and sell off assets if plant operations didn't return to normal levels by 5 p.m. Thursday. Liquidation would result in the loss of about 18,000 jobs.
Hostess spokesman Lance Ignon said the company would likely make an announcement Friday after assessing plant operations last night.
Hostess, based in Irving, Texas, has already reached a contract agreement with its largest union, the International Brotherhood of Teamsters. But thousands of members in its second-biggest union went on strike late last week after rejecting in September a contract offer that cut wages and benefits. Officials for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union say the company stopped contributing to workers' pensions last year.
In an interview with Fox Business, Hostess chief executive Gregory Rayburn said many workers have crossed picket lines this week to go back to work despite warnings by union leadership that they'd be fined.
"The problem is we don't have enough crossing those lines to maintain normal production," said Rayburn, who first joined Hostess earlier this year as a restructuring expert.
Hostess says production at about a dozen of the company's 33 plants has been affected by the strike. Three plants were closed earlier this week.
A representative for the bakery workers union did not respond to request for comment. The company, founded in 1930, faces growing competition in snacks.