IBJNews

Hostess says liquidation decision expected Friday

Back to TopCommentsE-mailPrintBookmark and Share

Hostess Brands said it likely won't make an announcement until Friday morning on whether it will move to liquidate its business, after the company had set a Thursday deadline for striking employees to return to work.

The maker of Twinkies, Ding Dongs and Wonder Bread had warned employees that would file a motion in U.S. Bankruptcy Court to unwind its business and sell off assets if plant operations didn't return to normal levels by 5 p.m. Thursday. That would result in the loss of about 18,000 jobs, including hundreds in Indiana.

A spokesman for Hostess, Lance Ignon, said the company would likely make an announcement Friday after assessing plant operations Thursday evening.

Hostess, based in Irving, Texas, has already reached a contract agreement with its largest union, the International Brotherhood of Teamsters. But thousands of members in its second-biggest union went on strike late last week after rejecting in September a contract offer that cut wages and benefits. Officials for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union say the company stopped contributing to workers' pensions last year.

The BCTGM unions’s 436 members who work at Hostess’ Indianapolis and Columbus plants joined in nationwide pickets that began Nov. 9.

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

In an interview with Fox Business, Hostess CEO Gregory Rayburn said many workers have already crossed picket lines this week to go back to work despite warnings by union leadership that they'd be fined.

"The problem is we don't have enough crossing those lines to maintain normal production," said Rayburn, who first joined Hostess earlier this year as a restructuring expert.

Hostess says that production at about a dozen of the company's 33 plants has been seriously affected by the strike. Three plants were closed earlier this week.

A representative for the bakery-workers union did not respond to request for comment. The Teamsters meanwhile are urging the smaller union to hold a secret ballot on whether to continue striking. Citing its financial experts who had access to the company's books, the Teamsters say that Hostess' warning of liquidation is "not an empty threat or a negotiating tactic" but a certain outcome if workers continue striking.

The Teamsters also noted that the strike put its union members in the "horrible position" of deciding whether to cross picket lines.

Hostess, a privately held company, filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade. The company cited increasing pension and medical costs for employees as one of the drivers behind its latest filing. Hostess has argued that workers must make concessions for it to exit bankruptcy and improve its financial position.

The company, founded in 1930, is fighting battles beyond labor costs, however. Competition is increasing in the snack space and Americans are increasingly conscious about healthy eating. Hostess also makes Dolly Madison, Drake's and Nature's Pride snacks.

Hostess said it would file the motion to liquidate Friday if needed, with a hearing scheduled for Monday. If the motion is granted, Hostess would begin closing operations as early as Tuesday.

ADVERTISEMENT

  • Idea
    I dont see why Hostess doesnt just rehire a bunch of people..Plenty of people will take the jobs at 11 an hour because it sure beats nothing they are making now. Great thing about being an at-will state..company can fire you for any reason that is not protected by law... in other words they can fire you just because they want to.
  • hostess
    heard one guy on strike say he was living on 16 an hour and just couldn't make it on 11. now he has to make it on 0 or 300 a week unemployment.not sure if you can get that when you chose to strike and stop work....

Post a comment to this story

COMMENTS POLICY
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
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Really, taking someone managing the regulation of Alcohol and making himthe President of an IVY Tech regional campus. Does he have an education background?

  2. Jan, great rant. Now how about you review the report and offer rebuttal of the memo. This might be more conducive to civil discourse than a wild rant with no supporting facts. Perhaps some links to support your assertions would be helpful

  3. I've lived in Indianapolis my whole and been to the track 3 times. Once for a Brickyard, once last year on a practice day for Indy 500, and once when I was a high school student to pick up trash for community service. In the past 11 years, I would say while the IMS is a great venue, there are some upgrades that would show that it's changing with the times, just like the city is. First, take out the bleachers and put in individual seats. Kentucky Motor Speedway has individual seats and they look cool. Fix up the restrooms. Add wi-fi. Like others have suggested, look at bringing in concerts leading up to events. Don't just stick with the country music genre. Pop music would work well too I believe. This will attract more young celebrities to the Indy 500 like the kind that go to the Kentucky Derby. Work with Indy Go to increase the frequency of the bus route to the track during high end events. That way people have other options than worrying about where to park and paying for parking. Then after all of this, look at getting night lights. I think the aforementioned strategies are more necessary than night racing at this point in time.

  4. Talking about congestion ANYWHERE in Indianapolis is absolutely laughable. Sure you may have to wait in 5 minutes of traffic to travel down BR avenue during *peak* times. But that is absolutely nothing compared to actual big cities. Indy is way too suburban to have actual congestion problems. So please, never bring up "congestion" as an excuse to avoid development in Indianapolis. If anything, we could use a little more.

  5. Oh wait. Never mind.

ADVERTISEMENT