Hostess Brands closes all plants amid strike
BY KYLE ARNOLD World Staff Writer
Saturday, November 17, 2012
11/17/12 at 7:47 AM
The maker of Twinkies, Ho-Hos and Wonder Bread says it's calling it quits after a one-week strike by workers at bakeries nationwide, including Tulsa.
Hostess Brands Inc. closed all 36 of its factories Friday and filed a motion in U.S. Bankruptcy Court in New York to immediately liquidate and sell its assets. The move came just hours after the company gave striking workers a hard deadline to come back to work.
A Hostess Brands spokesman said the Irving, Texas-based company's decision to shut down and liquidate is final, even if workers decide to end their walkout.
"There's nothing to come back to," Lance Ignon said. "For all intents and purposes Hostess is done."
Workers with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union continued their walkout Friday over a proposal by Hostess to cut salaries by 8 percent, reduce benefits and change overtime rules.
The Tulsa plant, at 1111 S. Sheridan Road, has 180 workers and produces bread and buns under the Wonder Bread name. The strike affects 18,500 employees nationwide at 33 bakeries, 565 distribution centers, 5,500 delivery routes and 570 bakery outlets.
The shutdown also clouds the future of some of the country's most popular and longest-produced snack food and baked goods brands, including Nature's Pride and popular Hostess snack foods such as Twinkies, Sno Balls, Ding Dongs, Donettes and Hostess CupCakes.
The company blames the shutdown on the refusal of the union to make wage and benefit concessions, while workers say they have already taken significant cuts and that a decade of buyouts and executive missteps have led to the bankruptcy.
"We've been through these kind of threats before, every step of the way," said Doyle Briggs, a 26-year employee at the Tulsa plant.
"When we rejected the contract they threatened to shut the company down. This is just more of the same."
Briggs said workers plan to continue their walkout despite what the company says.
Many workers in Tulsa hope that Hostess hurries to sell the brands and assets so that a new buyer can bring the plant back online.
Hostess Brands lost $340 million in 2011 and in January filed for bankruptcy protection. Its predecessor company, Interstate Bakeries, filed bankruptcy in 2004 and changed its name to Hostess after emerging in 2009.
This year's bankruptcy gave the company a means to renegotiate a handful of contracts with drivers, bakers and other employees, but it couldn't forge a deal with the BCTGM union.
Tulsa employee Larry Chandler said union members were already upset with the company for not funding negotiated pension contributions and for a series of wage cuts over the last decade.
"There haven't been any negotiations on this," Chandler said. "They wanted us to take the deal or they would shut everything down."
Hostess officials said the union salary and pension commitments are too much for the company.
"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Chairman and CEO Gregory F. Rayburn in a statement Friday.
A Hostess spokesman said the proposed contract with bakers would have put the company in a position to be profitable again.
With facilities shut down, retailers and consumers alike are wondering about the availability of local Hostess products. Bakery outlets and some distribution continued to operate Friday, but that likely won't continue for long.
QuikTrip Corp. spokesman Mike Thornbrugh said the convenience store chain had plenty of Twinkies and other snack cakes in stock, but there are worries about bread and buns produced at the Tulsa bakery.
He said Wonder Bread products are used for most of the Tulsa-based chain's roller grill items.
"When they went into bankruptcy, we had to put in place a plan in the event that production stopped," he said. "So we've had to go find another supply to provide for us."
Hostess Brands has filed a motion for a meeting Monday with court officials that could clear the way for a formal shutdown and liquidation of the entire Tulsa plant as early as Tuesday.
Original Print Headline: Hostess closes all plants
Kyle Arnold 918-581-8380
Henry Meredith, a 37-year employee of the Hostess bakery at 1111 S. Sheridan Road, stands with other workers on the picket line at the plant's main entrance Friday. MICHAEL WYKE/Tulsa World