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Hostess Goes Under; Wonderbread, Twinkies, Ho Ho's to Leave Shelves

Hostess Brands is asking a federal bankruptcy court for permission to close its doors after a bakers strike, laying off 18,500 workers.

 

Hostess Brands, the maker of Wonderbread, Ding Dongs, Devil Dogs and Ho Hos will close its doors as it petitions a federal bankruptcy court to close its operations due to an employee strike, according to CNN Money.

As a result, the Irving, Texas company, with a plant in Philadelphia, plans to liquidate, laying off 18,500 workers and selling off assets to the highest bidder. This means some of the baked goods could return to shelves at some point, but as part of another company.

"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," said CEO Gregory Rayburn.

The company, which has struggled financially and filed for bankruptcy in 2004, offered a new contract to employees with reduced wages and benefits earlier this year. The International Brotherhood of Teamsters voted narrowly to accept the contract; the bakers did not.

"These guys gave concessions when the company came out of bankruptcy in 2004. Now (the company) comes back and wants even more drastic cuts from workers," John Howard, a union official with the bakers' union, told the PJ Star Journal.

The contract cut salaries across the company by eight percent in the first year, with a planned three percent increase in each of the next three years and one percent in the final year.

Hostess also reduced its contributions towards employee health care plans, instead offering a 25 percent equity stake for workers and including two union representatives of an eight-member board of representatives.

Read more here at CNN Money.

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