Hostess Brands, Inc., the largest wholesale baker in the U.S., has announced on Friday that they are shuttering their bakery business.
The producers and distributors of such iconic baked goods such as Twinkies, Wonder Bread, Ding-Dongs, Zingers and cupcakes announced they will be auctioning off their various brands after they refused to meet the demands of its bakers union following a union led strike.
Hostess has been in financial trouble for the last seven years, filing bankruptcy twice, most recently this year. While the company was able to strike a deal with its largest union, the Teamsters, they claimed to have nothing left to offer the bakers union who were faced with 4% overall paycuts over the next few years. Hostess claimed there was simply nothing left of the struggling company after a Chapter 11 restructuring.
On Wednesday, the company gave the striking bakers an ultimatum — go back to work or we will shut our doors forever leaving thousands of people out of work.
The baker’s union called their bluff and Hostess kept to their word.
Hostess management announced that they will lay off a total 18.500 people as they begin the process of going out of business.
While the various brands will be auctioned off, it is not yet known if another company will absorb them. Some of the brands may be lost forever.
Hostess posted a message today, with a sorrow filled message about the end of era:
“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.”
They further explained:
“Hostess Brands is unprofitable under its current cost structure, much of which is determined by union wages and pension costs.”
“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” said Gregory F. Rayburn, chief executive officer. “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”