Hostess threatened by striking bakers
The old joke among junk-food addicts is that Twinkies never expire. But the same might not be true of Hostess Brands Inc., maker of the iconic American snack.
Hostess said Thursday that the company could be forced to file a motion in U.S. Bankruptcy Court today to begin liquidating the company and start laying off 18,000 workers nationwide. Hostess has 187 workers in Connecticut, including 38 at facilities in Uncasville and Norwich.
Representatives of Hostess, based in Irving, Texas, said they expect to announce today whether the company has been able to negotiate with strikers to avoid a shutdown. Striking workers had until 5 p.m. Thursday to return to work, they said, and allow the company to resume normal operations.
The company, which makes Ho Hos, Suzy Q's, Donettes, Wonder Bread and Ding Dongs, among other products, filed a Worker Adjustment and Retraining Notification this week in Connecticut, saying that a strike by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union had crippled production at plants in Cincinnati, Seattle and St. Louis.
"We simply do not have the financial resources to survive an ongoing national strike," said Gregory F. Rayburn, the company's chairman and chief executive, in a statement.
Hostess doesn't bake any of its products in Connecticut, but it has sites in East Windsor, Cheshire and Bridgeport, along with the Uncasville distribution center and Norwich retail store. The company, which dates to the 1930s, also makes and distributes Dolly Madison, Drake's and Nature's Pride products.
Hostess, which has been battling financial problems tied to high costs and declining sales, emerged from a previous bankruptcy under the name Interstate Bakeries just three years ago. Many of its competitors do not have union employees, and the company has been fighting a market trend that has cut American's consumption of white bread and calorie-laden snacks.
Jeff Parlato, vice president of human resources and labor relations for Hostess, said in a letter to the state Labor Department that other unions had ratified modified collective bargaining agreements to help the company successfully emerge from bankruptcy.
But the bakery workers union did not ratify a new agreement, he said, instead launching strikes that would, if they continued, make it impossible to emerge from Chapter 11 bankruptcy as a viable company.
Hostess said it would be deciding overnight whether to request a hearing Monday on its possible bankruptcy court motion to begin liquidating the company. If a judge grants the motion, Hostess would begin closing all its operations Tuesday, leading to termination notices for nearly all the company's employees, except for small crews needed to secure facilities and prepare them for sale.
"It is now up to (the bakery workers union) to decide if they want to call off the strike and save this company, or cause massive financial harm to thousands of employees and their families," Rayburn, the Hostess CEO, said in a statement.
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