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Subscribe to RSSThe maker of Twinkies and Wonder Bread will wind down in three months, closing 33 plants and more than 500 bakeries. CNBC's Kayla Tauche reports.
It's official. Twinkies are toast, at least as far as being a Hostess product is concerned.
Hostess Brands Inc on Wednesday won permission from a U.S. bankruptcy judge to begin shutting down, and expressed optimism it will find new homes for many of its iconic brands, which include Twinkies, Drake's cakes and Wonder Bread.
U.S. Bankruptcy Judge Robert Drain in White Plains, N.Y., authorized current management, led by restructuring specialist Gregory Rayburn, to immediately begin efforts to wind down the 82-year-old company, a process expected to take one year.
"It appears clear to me that the debtors have taken the right course in seeking to implement the wind-down plan as promptly as possible," Drain said near the end of a four-hour hearing.
The judge authorized Hostess to begin the liquidation process one day after his last-ditch mediation effort between the Irving, Texas-based company and its striking bakers' union broke down.
Hostess CEO Gregory Rayburn testified at a bankruptcy hearing Wednesday that he will have to terminate 15,000 employees immediately. Most of the remaining 3,200 workers are expected to be let go within four months.
"This is a tragedy, and we're well aware of it," Heather Lennox, a lawyer for Hostess, told the judge. "We are trying to be as sensitive as we can possibly be under the circumstances to the human cost of this."
The union, the Bakery, Confectionery, Tobacco and Grain Millers Union, has complained it should not be forced into new wage and benefit cuts, on top of earlier give-backs, while top executives rewarded themselves with higher pay, and that it was "well aware" of the potential consequences of that stance.
The union said in a court filing that its sole objective was to leave Hostess with "a real, rather than an illusory or theoretical, likelihood of establishing a stable business with secure jobs."
Union president Frank Hurt was not immediately available for comment.
"This is truly a sad day for thousands of families affected by the closing of this company," said Teamsters General Secretary-Treasurer Ken Hall in a statement. "I want to assure our members that despite this outcome, they do not stand alone and their union will continue to work on their behalf to help them find new employment."
About 6,700 Hostess workers are members of Teamsters.
Related story: Twinkies are king of the Nile, despite US woes
After the company's announcement last week that it would need to liquidate after claiming that a strike by workers crippled its business, consumers cleared store shelves of Hostess products, especially Twinkies, out of fear they would never taste the spongy, yellow cakes again.
There could be a silver lining in this Twinkie tale. Hostess bankers testified to a "flood" of inquiries into buying Hostess brand names from other food makers, from stores and supermarkets, including Wal-Mart, and from investment interests.
According to testimony by a Hostess Brands adviser, many of the interested buyers have asked if they could keep some of the workers employed in the factories.
Speaking to reporters outside the courthouse, Rayburn said he was disappointed that the mediation failed and that he plans to move "extremely fast" to sell Hostess' assets. Asked which bidders may fare best, he said: "The one that pays the most."
Information from the Associated Press and Reuters was included in this report.
Hostess may be going out of business, but no need to despair. Giada De Laurentiis chats with the TODAY anchors about the topics making headlines today and demonstrates how you can make a homemade version of the beloved crème-filled treat.
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Union lovers berate the company for giving managers raises. This has become so typical of the current American redistribution of wealth culture. If someone is getting more than us, we demand they be torn down to our level. We have seen it over and over, unions demanding more and more, extorting business through strikes (and occasionally violence). This is happening right now in Portland, Oregon where the longshoremen are threatening the port. It wouldn't be all that surprising to see a similar outcome. Shippers just decide to go elsewhere rather than make the long trek up the river to Portland. Result? Just like Hostess and others, the companies will have to close down and many jobs will be eliminated.
Jim, So true!
Ok, Jim.
Your company says it has to lower costs.
You're asked to take a 50% pay cut but your boss gets a 100% RAISE. And use the brain - you make less and he makes more. MUCH MORE.
Yet YOU are the one doing all the work.
You tell me what's right?
Life isn't fair get a helmet, or better yet a better education.
JKLD, you have made a number of statements through out this tread, ie. 50% pay cuts and 100% raises among others. I must say that I have not read any of them in the main stream media, so I would ask you to please reference your source for your statements. Thanks
Jim, when the CEO gives himself a raise to $2.5 million/year for a company that is filing bankruptcy, and by his own words HE made decisions that were not in the best interests of the company, and the workers makes $29, 120/year, your right there is redistribution of wealth your just confused on the direction!
This country was strongest when we had a strong middle class! We had a strong middle class when people in the middle class were earning MORE money. You just needed ONE income to survive on not TWO, one person earned enough families even had some to put away. But after the stagnation of income for the middle class we no longer have that!
Over the last 30 years, the wealthy have increased their wealth by 300%, while the incomes of the middle class have stagnated!! I don't know how you think the "redistribution of wealth" is headed to the middle class. Any IDIOT can see the wealthy have been on the RECEIVING end of the wealth "redistribution"! And look where our economy is, in the tank!
It is obvious to everyone, except Fox News Watchers (stupidiest in the land) that a strong economy depends on the middle class having a majority of the wealth, not the wealthy who tend to put THEIR money in foriegn accounts in the CAYMAN ISLANDS and use their money to build OTHER economies in other countries! When the MIDDLE CLASS is stong and have money to spend we SPEND it! There by even increasing the wealth of the wealthy. When the middle class doesn't have money to spend, even if the wealthy do (1% of this country holds 90% of the wealth) the economy goes down!! You have better thank those who are trying to spread the wealth or you would be living out of a garbage can in 10 years!! If you have a job thank someone one in the middle class!
Are you so stupid that you think you see millionaires and billionaires standing in line for BLACK FRIDAY? None! It is us 99% who will SAVE the economy with our out of control spending! NOT Mitt Romney, or Bill Gates!
blue ---- you must have missed the companion article ---- that particular CEO was fired.
It's the union workers right to sit on their ass and get paid. Put those HS diplomas to work boys.
I think you have it the wrong way!! It is the CEO right to sit on his a$$ and get paid, obviously this idiot ruined an 80 year company, after voting himself a 300% raise, fired or not!
Actually, after reading that the company had 6 CEO over the recent years, the buck stops at the board of directors! They seem to repeatedly fail at hiring someone competent!
Bummer, Where was the Twinkies Bailout?
I would have supported that one.
15,000 people suffer while a Handful of 1% are rewarded for poor business ethics
The 1% Business Model at it's best.....
Actually 18,000 but whos counting?
800#,
It is so easy to post your political rhetoric, it would be so much more helpful if you could present a factual comment.
What about the BAD decisions made by the CEO who RAN the company into the ground, he doesn't have any responsiblity? I guess the buck stops at the little guy who is the baker!! CEO don't have any responsiblity for ruining companies, it is the workers!! Wow, then WHY do the CEOs get paid the big bucks? Just for sitting in their offices looking pretty? The money should go to those who have the biggest risk, right? So how does someone with a golden parachute have any risk?
Nobody here wants to talk about the real problem here that is created by the GOP and BIG BUSINESS.... why do they go belly up?... they don't have any money (before the unions).... try the sugar subsidy... we pay zillions more for sugar than you can buy it from 3rd world nations... and do you know why?.... the BIG BUSINESS BOYS (see southern states because you cannot grow sugar in New England) don't want to get hit... but we have to grow sugar beets (Google the states to see who grows sugar beets)... and you'll find every GOP governor... .so what do they think about "private industry?".... not when it helps them....
Good point. And this is also why the bakery from Mexico is considering buying the company brands. According to the reports, they have access to cheaper sugar. And ironically, it's the same company that offered $500MM to buy them years ago and they were turned down.
Kevin, look up when these subsidies were created and I think you'll find they were started under Democratic administrations in many cases.
If you want to blame subsidies, blame every member of congress over the last 70 years that were trying to get some for their constituents. I'll guarantee you that party affiliation will not matter.
All of the posters complaining about CEO pay...Do you realize what the pres of the AFL-CIO makes? Millions....and the workers share none of it, they just pay dues to pay him...
I am by no means a fan of Scott Walker, but one thing he has done for me as a teacher in WI is that I have the choice to keep my $78.00 a month in union dues. Union once were needed for worker safety, hey still are in some jobs, but most are useless.
No offense sir, but public unions are the most damaging and useless unions of them all. Just ask FDR
That's why my choice was not to pay the dues. I belonged to the union because I chose to teach and did not have a choice to belong and pay dues. So I do not disagree with you or FDR. I long to be able to get rid of the dead wood in my district and get paid for what I accomplish.
Walmart is going to come to the rescue!!!!!
These jobs will be added retroactively to the unemployment numbers after the 2014 midterms.
Union Schmunion. It's time to clone Walker.
So you think that a crappy CEO should give themselves a 300% raise and then file bankruptcy on the company? That to you is better than employees being able to stand together and bargain for wages and benefits!!
Are slaves okay in your book? Should all of us in the middle class just give up and GET NO pay from our employers would that make you happy? That is going to happen if idiots continue to push unions out!! Read history!! See what the working world was like before Unions.
Oh, and tomorrow when you stuffing your face with turkey, THANK A UNION THAT YOU HAVE THE DAY OFF!
They were already in bankruptcy and the court was the power doing the negotiating and making the decisions.
Vulture capitalism. How is this different than someone embezzling from a company? CEO Gregory Rayburn and his henchmen stole money from the company in the form of exorbitant raises, and now say they have to close because there is no money. We need a House of Representatives that will represent the people, not the corporations (Texas still hasn't executed one).
I'm pretty sure that mean old CEO stole his compensation. No way it was negotiated prior to his employment with the board of directors. As was the rest of management and just like you libs always say.....don't be haters!
Ozzie check your facts, the CEO voted to give himself and the top execs raises just weeks BEFORE filing bankruptcy! In fact they may face criminal charges for doing so!
The CEO will make out just FINE. Too bad for all the regular employees. They are expendable as usual. And a few less terrible products out to help ruin our health.
Way to go Bakery and whatever else unions involved. Brilliant idea to not just go on strike, but to have over 18,000 of you own union payers laid off, like we don't have enough people laid off in this country. The people that belong(ed) to the union, should have walked across the picket lines and kept your families with food on the table, and a roof over your head, but did you do that? No, because you're stupid and got lead around by your union bosses like a sheep with a ring in it's nose being lead around a petting zoo. You deserve what you get. Oh before anybody tries, ya can't pin this on Obama, just stupid people. Now they don't have a job, the people that drove and delivered don't have a job, the stores have less products to sell. Yup....sounds like a win/win to me. NOT! hahaha
And another U.S. factory gone maybe to another country. And there will be those that will say the greedy companies are the ones to blame for the exodus's. Hopefully the Mexicans or Chinese can make the Twinkies as good a s before.
Happy thanksgiving Hostess executives,I hope U enjoy your millions in ill gotten gains in this life,THERE WILL BE NO MONEY OR REST IN HELL!!!!
Tyler, when businesses make bad decisions it shouldn't be the workers who are help responsible! The CEO (#6, I believe) said that BAD decisions were made! So why are YOU and other cons blaming the uions and the workers!
It is not that we believe that, "you believe non-skilled US workers should be paid at a much higher rate than their peers simply because they are part of a union." We believe that workers in general should be paid much more than they are currently getting. If you cut unions out of the picture businesses will drop the wages on workers to next to nothing! It has already been happening!
Over the past 30 years, the wealthy have increased their wealth by 300%. While the working class income has stagnated! The "businesses" owners realized that they could INCREASE their personal profits by employing workers at lower and lower salaries. The standard "raise" 30 years ago, 10%, now the standard raise is 2-3% allowing more money to stay at the top. Meanwhile they economy has tanked in large part because those of us who spend money, don't have money to spend. What once a single person could afford, a home, a car, food on the table now takes most families 2.5 salaries to afford.
The working class has been a victim of "wealth redistribution". The money has gone up and never seen again. Take Mitt Romney. He off-shored millions of dollars which means that money is NOT in the economy, it is in the CAYMAN Islands. 90% of the wealth of this country is Dammed up in the accounts of 1%. That is why the economy is failing, NOT because of Obama or any other stupid reason Cons come up with.
If you have 10 cookies and 10 people, and one person holds nine of the cookies and doesn't give anyone else a cookie, 9 people will starve! That is what is happening your just to married to Fox News to get it!
There are some great bakery shops in Mexico that have free reign to ship their goods to the U.S.
Bet you dollars to Twinkies (Don't know what the exchange rate is.) that happens.
Hay, go ahead feed your kids the stuff made in Mexico!! I am sure when they die from food piosoning, because they put rat poison in the filler, you have the comfort of knowing that your kids died so that some CEO could make millions more!
With no regulation on what ingredients are used those "great" bakeries in Mexico could pour rat poison in your kids Twinkie and they would be dead before you know it. But you would have the satisfaction of knowing that a CEO made millions while YOU child lays in the ground! So go ahead feed your kid Twinkies from Mexico!
Happy Thanksgiving and Merry Christmas! ~regards Greedy Unions
94% of something is still a lot better than 100% of nothing!
Good Job Union!!!!, Good Job
Do the layoffs include Cream Injectors Local #501? Or Icing Squigglers #664?
Yep they can take pay-cuts. Most of us are. Pay cuts, benefit cuts - crazy working conditions.
That's the global economy. Union? Well they have their issues. The Middle Class? Being decimated.
So what's the freaking answer? We are quite literally going to be a third-world Nation and very soon.
How does labor receive a larger piece of the pie? I would love to know anyone's ideas.
The current administration has the answer....Wait....Wait for it .........Redistribution!
labor can go out and earn it, not steal it by legalized extortion. If they aren't happy with their lot in life, let them change it.
Ozzie, wealth redistribution already happened, The Wealthy now have all the wealth and you and I have to fight over the crumbs the rich let us have! Except you want to give them even more power and wealth! I guess your looking forward to the day when, like the Aussie lady said, workers are paid $2/day! Look at India, do you want to live in a tin sided shack with no running water and garbage for food? That is what you are aiming for!
The Hedge Funds run Hostess, The Top guy takes a major bonus and 15,000 working stiffs get their Thanksgiving and Christmas present by losing their livelihoods.
Great, the Race to the Bottom in America continues while the Big Boys feast on their carcasses.
Their biggest union, the Teamsters, were able to make a deal. The smaller union held out. The Teamsters even suggested secret ballot vote for the smaller union, as many workers crossed the picket lines, to keep the plant running. You can blame management and execs all you want because they are paid so much and today that's the politically correct group to blame, but in the end as mediation failed. it was indeed the union that caused Hostess to close. They would rather live on unemployment with Cobra insurance over the holidays than go to work. I can't help but wonder how all those people who were willing to make a deal and keep their jobs feel about unions now.
Poor union workers.....do you really think any company that comes in to take over the Hostess brands is going to give them what they are asking for? Heck no! this is still about the cost of goods sold.
You can say alll you want about greedy executives and an inflexible union, you can also criticize who did what or didn't do what, in the end they all got what they deserved! Now the American public can pay the unemployment benefits, Hooray!
When I see people on this forum talking about how great the unions are, keep drinking the cool aid....and for those who compare this to something like Bain capital and corporate raiders...Do your research.
No one wants to take personal resonsibility for anything anymore, all they want is what they can get for nothing and to kick the can to someone else
"Globalization will float all boats", but no one said a lot of boats would have to sink right here at home to make it happen.
Prior to this "Hostess is going out of business" hysteria when was the last time you bought a Hostess anything? Enough said.
I hope the first one to get a pink slip is Gregory "I failed at running a snack cake company" Rayburn.
Now where's my Top Pot doughnut...
Welcome to Globalization, Mexico will now make Twinkies and sooner or later we will become Mexico, then Jobs will come back to America but not until that happens.
This is fantastic news. This is exactly how all union negotiations should end.
I guess you will be working tomorrow since you hate the unions, after all it is the unions who negotiated having the holidays off for their employees so now most of us all have it off to!!
Humm, how many holidays do the Chinese get off? None? Oh that's right no unions in China!
Another part of American down the drain, should make the libby's and socialist very happy. Good for them...