Dont write a Twinkies obituary yet. The snack cake and some other popular Hostess Brands are expected to be bought by other companies in the wake of Hostess bankruptcy liquidation.
By DIANE STAFFORD
The Kansas City Star
More likely lost for good, though, are thousands of jobs, even if some Hostess plants, including one in Lenexa, are reopened by eventual buyers.
For now, theres no timetable for any Hostess product to return to production, and some stores are reporting a run on favorite products as consumers stock up.
Any orders in process are cancelled immediately. Any product in transit will be or has been returned to the shipper, Hostess said Friday in a letter to suppliers.
Hostess said the wind down period the time it takes to dispose of company assets through bankruptcy proceedings could take a year.
Hostess on Friday shuttered all 33 of its remaining bakeries it closed three earlier in the week and said it is firing most of its 18,500-member workforce. Only skeleton shut-down crews remain on the job.
The company requested a liquidation hearing for Monday in U.S. Bankruptcy Court in New York.
Hostess moved to end business and sell off operations piecemeal after members of the Bakery, Confectionery, Tobacco Workers and Grain Millers Union began a strike last week in protest of the companys unilaterally imposed wage and benefits cuts.
We do not have the financial resources to weather an extended nationwide strike, said Hostess CEO Gregory Rayburn.
The two remaining baking industry giants in the United States, Flowers Foods and Bimbo Bakeries USA, are mentioned most often as possible suitors for some of the Hostess brands or plants.
Baking industry observers say the Hostess bread plant in Lenexa, which has been making Home Pride and Wonder breads and buns, and the Twinkies plant in Emporia, Kan., should be attractive properties compared with some less efficient Hostess locations.
The shutdowns affect 196 employees in Lenexa and 536 in Emporia, Kan., a Hostess spokesman said. A bread plant in Boonville, Mo., had between 80 and 100 workers, according to different sources.
This wont be easy, said James Jones, chief shop steward for the bakery union in Lenexa. We hope to go back to work. But we had to go out. Wed given and given concessions, including no raises for five years. But they told us take it or else If you dont like it, quit.
The union rejected a final offer from Hostess in September, and the company received bankruptcy court permission in October to unilaterally impose changes in the collective bargaining agreement.
Workers at the Lenexa and Emporia bakeries participated in the strike. Those in Boonville did not.
The bakery unions walkout at about two-thirds of the Hostess plants incurred the ire of many other Hostess workers who blame the union for losing their jobs.
But our members, nationally and locally, felt like wed given and given enough concessions over the years, and nothing we did seemed to benefit the company, said Conrad Boos, Missouri business representative for the union. Were hoping theres a market out there for the quality product we make.
Boos said the local union represented about 100 employees at the Lenexa plant. About a dozen of the bakery union members crossed the Lenexa picket line, members said.
Rayburn, the Hostess CEO, blamed the unions national leadership for planting false hope in its members that a buyer would save the company as a whole.
National bakery union president Frank Hurt countered that the Wall Street investors, restructuring experts, third-tier managers from other non-baking food companies and currently a liquidation specialist hadnt intended to revive the company and were using the bakers strike as an excuse to shut it down.
Other Lenexa plant employees were members of the Teamsters union, representing the drivers, the Operating Engineers union, representing the maintenance crew, and non-union members in management and other front office jobs.
Teamster drivers in Lenexa continued delivering product during the bakers strike, and Internet chat pages reflected considerable anger at the bakery union leadership for directing the walkout.
Some workers said they are upset that the company said they will not be paid for unused vacation time.
Others said they didnt know if theyd be able to collect unemployment benefits, but Hostess said most employees should be eligible for government-provided unemployment benefits.
The exception, the company said, would be for employees who went on strike in some states. The legal staff at the Kansas Department of Labor said that under state law, employees generally arent qualified for benefits while on strike, but each persons situation is considered on a case-by-case basis ....
Hostess filed for its second bankruptcy reorganization in eight years in January. In its first reorganization, begun in 2004, it closed 21 plants in an attempt to become viable.
Debts exceeded assets by about $448 million, according to the companys second reorganization filing, which came three years after emerging from the first reorganization.
In a letter to suppliers, Hostess senior vice president Rob Kissick said that it is unknown at this time what will happen to unpaid vendor invoices.
In information for consumers posted on the Internet, Hostess said all products already on store shelves will remain for sale and will not be picked up by the company.
As to when potential buyers might resume production of any product, the company said, We anticipate there to be a lot of interest in our brands but do not have a specific time frame for the sale of those brands.
In a more extensive Q&A for employees, Hostess said liquidation would not affect funds already invested in their 401(k) accounts but that the defined-benefit pension plan sponsored by the company does not have sufficient funds to cover all liabilities. The plan will be terminated and the Pension Benefits Guaranty Corporation will assume its liabilities, the statement said.
Hostess Brands dates to 1930. It formerly was known as Interstate Bakeries and was based in Kansas City until 2009.
Its sad to see whats happened to the company, said Dick Cook, who retired as Hostess/Interstate vice president of labor relations in April 2010, having negotiated more than 500 labor contracts during a long work tenure. The employees of the company were extremely hard working, and I feel very bad for them.
To reach Diane Stafford call 816-234-4359 or send email to email@example.com.