Hostess: Firm to liquidate unless workers return Thursday

Back to TopCommentsE-mailPrintBookmark and Share

Hostess Brands Inc. says it will file for liquidation unless its unionized employees in Indiana and across the nation return to work by 5 p.m. Thursday.

The maker of Wonder bread and Twinkies said in a statement Wednesday afternoon that it did not have the financial resources to survive the ongoing strike by the Bakery, Confectionery, Tobacco Workers and Grain Millers union.

“It is now up to Hostess’ BCTGM-represented employees and Frank Hurt, their international president, 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,” Hostess CEO Gregory Rayburn said in a prepared statement.

BCTGM’s 436 members working at Hostess’ Indianapolis and Columbus plants have joined in nationwide pickets that began Nov. 9.

The company employs 288 in Indianapolis, 212 of them BCTGM members.

Irving, Texas-based Hostess this week closed plants in Cincinnati, St. Louis and Seattle and threatened additional shutdowns.

As part of its bankruptcy proceedings, the company proposed labor contracts with pay cuts.

The union has called the proposed pact the “unilateral imposition of a horrendous contract,” and 92 percent of the membership rejected the offer.

Hostess intends to file a motion Nov. 16 with the U.S. Bankruptcy Court requesting a hearing for Nov. 19. At the hearing, the company intends to ask permission to sell its assets and lay of 18,000 employees, including the 856 in Indiana.


  • Not enough Mr. Executive
    The problem is the percentage of the cuts. To the executive 5 percent doesn't change his tax bracket or class status. Meanwhile 5 percent takes a middle class person and moves him to lower. We can't continue to make class changes to the bottom two while not affecting the top.
  • Wake up America.
    People always want the lower class to give in and work for less. Why would anyone work and still not be abled to afford the cost of living. This whole system is out of whack because of the pay scale of white collars over blue collar workers. Anything top heavy will eventually crumble. If you look at the history of the company you will see that financial problems did not arise until the gap of pay scale increased ,based on the rate of inflation to cost of living. You can't run a company by taking what was once considered a good middle class job ,turning it into a lower class job, while maintaining the executives jobs at an upper class pay rate. If your going to decrease the level of pay on the bottom to a different class rate you must do the same up top. That's common business sense. I don't know why it gets lost by big corporations. People always make the argument,you won't be abled to attract the best CEOs if you don't offer a high pay scale, yet some of those so called best CEOs have given us front row tickets to the demise of some of our long standing companies. This is not a Republican or Democrat issue nor is it union vs right to work, it's a simple get your head out of the dream world, look at history and start to acknowledge the pay rate problem in America.
  • Live to Fight
    Whether you believe the points detailed by Jose Noway are valid (they where levied by creditors who were trying to get paid by a company in bankruptcy) or the the points detailed in "view from the top", the bottom line right now is the company will be shut down if the concessions are not accepted. If you are the workers, accept the concessions, then prove the excesses, and let the shareholders/creditors vote out the board that let it happen. And in the meantime, you will still have a job!
  • view from the top
    An Executive earning a large salary is NOT going to cause a company to go BK. The revenue vs expense ratio as well as stock prices are always way off thereby causing the problem. Adding a million dollars to the CEO salary (1 person) will not cause the company to go under! A Board grants extra pay in these type situations so that the CEO will stay on until the final outcome is determined rather than leave in the middle of the upheaval. The Board has a better understanding of the internal metrics as to whether the company is salvagable or not. Payroll is always the largest expense therefore workers are asked to take cuts and ultimately weak stock prices/ weak sales bring the entire organization down as they provide the infusion of $ to sustain the business in a positive way. Often times, the Executive staff has already taken cuts in their compensation before the workers are asked to. It is not something that normally gets publicized. No Executive wants to see their company fail or close as their job and salary go away as well.
    • Save the Twinkies
      Many, many companies have had substantial pay cuts and the employees took their lumps rather than have no job at all. Some of these cuts last for years, but they do come back. When I was unemployed, the vast majority of others in my boat at networking meetings were from manufacturing concerns and just COULD NOT get new jobs. More unemployment, food stamps, failed mortgages, etc. follow suit. That is followed by the government making even more citizens dependent up it. Hostess employees, don't win the battle and lose the war. (By the way, why doesn't Right to Work apply here or Hostess firing all the union workers and hire some of the unemployed masses out there? They'd be glad to accept a salary of any kind! Unions have lost their original purpose.
    • Always look to the top
      Check the facts before pointing fingers at the little guy. Most likely there are things out of line at the top. Workers on the line are not the ones walking away from this with piles of cash. However, a CEO making over $2 million and he still runs the company into Chapter 11? Had the cuts been fair across the board, I bet there wouldn't have been a strike.
    • Twinkies and Ding Dongs
      From WSJ in April 2012: "Creditors of Hostess Brands Inc. said in court papers the company may have "manipulated" its executives' salaries higher in the months leading up to its Chapter 11 filing, in what the creditors called a possible effort by Hostess to "sidestep" Bankruptcy Code compensation provisions." Also the previous March 2011 the CEO's pay increase was approved from their board from $750,000 to $2.25million, and then checked into Chapter 11 filings Jan 2012. But no.... you folks think it is greedy union workers.
      • Wonder who's worse here
        With a little research, I think the union should accept this contract. A 5% cut is hard to swallow, but as it stands, Hostess is planning on going into liquidation. In today's labor market, I think they will have a tough time finding an equivalent job. Keeping the company going is their best option, too. There are actually pay increases in the contract for coming years, although they are effectively pay cuts, as the raises are below the normal rate of inflation. Still, it is definitely better than the extended unemployment many will likely face if the company liquidates. Many companies today don't hire unemployed people, and I don't see that changing much until employment gets back to the actual 6-7% unemployment range. Just too many potential employees out there for the number of jobs.
      • Obama voters
        I suspect these union workers are all strong Obama voters.
      • Better think about your actions
        I do have mixed feelings about asking people to take deep pay cuts. However, this would be easier to accept if the management would reduce their large salaries and bonus and accept the same percentage of cuts they are asking the guys who have to live week to week trying to get by. Of course, once the plants are closed, most likely, the workers who take a hard line stance will take employment(if they can find any) doing a job for far less than they would be making by just being willing to try and work through the stalemate. It most often is the nutcakes who really do not want to work that causes all the problems. These types of employees need to be weeded out. I bet they would be the first to start whining and crying like a blubbering baby about needing a job when they are out on the street. Good employees should not allow a few bad apples to ruin their lives by allowing a plant to close.
      • Uh, Wait a Minute!
        You mean you were serious?.........uh, wait a minute......Too late now?......but I have kids to clothe and feed......what do you mean I should have thought of that?......No, really, we weren't serious........hey, come back here! I'm sure gonna miss Twinkies. I'll bet Little Debbie has something in the works though.
      • We'll Show Em!
        We'll show those management people, we'll put them out of business and all lose our jobs during the worst economic times since the Great Depression. That will show them who's really the boss!
      • 100% pay cut
        Hold out and take a 100% pay cut.....Sounds like a solid plan.
      • Hostess
        I hope hostess shuts down in Indiana too.I'm sick of the union thugs screwing things up. Especially thegovernment union crowd. They only care about themselves.

        Post a comment to this story

        We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
        You are legally responsible for what you post and your anonymity is not guaranteed.
        Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
        No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
        We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

        Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

        Sponsored by

        facebook - twitter on Facebook & Twitter

        Follow on TwitterFollow IBJ on Facebook:
        Follow on TwitterFollow IBJ's Tweets on these topics:
        thisissue1-092914.jpg 092914

        Subscribe to IBJ
        1. Here are a few candidates for this new group, "ripped from the headlines." First up, that bizzaro State Senator Brent Waltz; secondly, the unethical Todd Huston, and his contractual arrangements scheme; Finally, but not least of all, the dishonorable Eric Turner. What sayeth you Greg Zoeller?

        2. Good day. I can't hide this great testimony that take place in my life I will love everyone to know it and be partaker that is why I always place it on answer, I am Mrs,Natalie Cuttaia by name, I live in Texas, United State Of America, I want to thank (Mr.Bruce Brandon) for his kindness upon my family life. I never knew that there is still nice lender like this on internet and earth here. Just some Months Back, I was in search for a loan of $100,000,00 as I was running out of money for feeding and rent. I was scammed $6,800 Dollars and I decided not to involve my self in such business again but a Friend of my introduced me to a loan firm due to my appearance and doings. And I told him that I am not interested of any loan deal anymore but he told me that there is still a nice lender who he will recommend me to, and I made a trial and I am most grateful lucky am I today, I was given a loan amount of $100,000.00usd, by this great Company (Bruce Brandon Loan Company) managed by (Mr.Bruce Brandon) If you are in need of a genuine or legit loan or financial assistance and you can be reliable and trusted of capable of paying back at the due time of the funds I will advice you to, contact him via: ( bruce.brandon071@gmail.com ) And you will be free from scams in the internet. All thanks to Mr.Bruce Brandon You are the one who remove me and my family out of poverty. The reason why i am doing this is that, i promise Mr.Bruce Brandon that if i truly got my loan, i will advertize his company and bring customers to his company. Contact him via ( bruce.brandon071@gmail.com )for the Loan you have been looking for..

        3. Hello, We are firm Organization formed to help people in needs of helps,such as financial help. So if you are going through financial difficulty or you are in any financial mess,and you need funds to start up your own business,or you need loan to settle your debt or pay off your bills,start a nice business, or you are finding it hard to obtain capital loan from local banks,contact us today via email mrsroseberrywilkinsfunds.usa@gmail.com So do not let these opportunity pass you by because Jesus is the same yesterday, today and forever more. Please these is for serious minded and God fearing People. Your Name: Loan Amount: Loan Duration: Valid Cell Phone Number: Thanks for your understanding to your contact as we Await Regards Management Email:mrsroseberrywilkinsfunds.usa@gmail.com

        4. The question is, where could they build a new stadium? It seems in the past year, all the prime spots have been spoken for with potential projects. Maybe in the industrial wasteland area a block past Lucas Oil? I think it needs to be close to the core, if a new stadium is built.

        5. Aldi is generally a great shopping experience. Still, I'm sure YOU wouldn't want to shop there, which I consider a positive.