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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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The story is again,...CEO's granting themselves huge raises at the expense of the workers.
I say GOOD RIDDANCE to Hostess,...and any other company that is not being fair with their workers and their pay,....any company who will not bargain fairly with the labor that drives their productivity.
The workers of America need to join together in fighting this war.
YES ! There will be casualties,...jobs lost as a result of corporate leaders unwilling to be reasonable about paying their people.
We need to be a resolved and willing to sacrifice in this war against the middle/working class as we would be against foreign invaders,....willing to sacrifice,...willing to face a collapse and then re-build. To give in to the threats and fear mongering of companies such as Hostess is to offer the American worker as a sacrifice to elitism and corporate greed.
The American worker deserves better !!!!!
THE PROBLEM IS NOT RE-DISTRIBUTION OF WEALTH,...IT'S DISTRIBUTION OF THE WEALTH IN THE FIRST PLACE.
When companies turn record profits,...the few reap all of the profits and wages remain stagnant. This has been the way for the last 15 to 20 years.
The trickle down is a lie. It doesn't work,...and never has. It is a myth.
WORKERS OF AMERICA UNITE.
For YOU,...Mr GOP shill/corporate welfare specialist.
The American worker NEEDS protection from cutthroat corporate greed.
At this point,...that much is abundantly clear.
UNIONIZE THE AMERICAN WORKFORCE.
Doug,
I'm an Engineer and was never part of a Union. If you read the Wall Street piece on this you would have known it was not worth saving. There could be grounds for charges including fraud and embezzlement. Remember ENRON. Check history and find out what happened. Why might you do this???? People read Wall Street to help them see what they want to invest in. This company was a dog. If these people had brains they would come up with their own company. The Unions need to change and get more talented people with accounting and finance backgrounds. This Union just walked into dog poop.
The CEO knew that this would happen. So they intentionally hike their pay and started this mess to get out of the situation he had initiated. He pulled a Bain Capital move, get what you can and get the hell out of Dodge.
doug , where has all of your hate speeches gotten you so far ???
And how have you kept your job, Dougie? Your strident hate is generally considered unacceptable behavior in most companies. Your income does not define how far you have gotten, as there are plenty of scumbag executives making ten or more times what you do, and they only place they have gotten to is their country club, which is the only place that they can find someone who agrees with them. That's not getting far in my book.
Doug, you crack me up! You work for an AUTOMOTIVE PARTS company. Hmmm! You can thank President Obama for saving the AUTOMOTIVE industry and your JOB. If GM was to go under without help, you would have been on the UNEMPLOYMENT line along with other people in the Auto industry. And don't try to tell me your job would have been safe if that did happen. LMFAO!
RIGHT ON, SOMEONE ACTUALLY KNOWS HOW IT ALL WORKS!! It just gets so old reading these sad, pathetic rants by the rightwingnuts who seem by all rights ready and willing to get on their knees and suck the spit and related bodily fluids of the CEOs and other BIG BOYS from sea to shining sea. Yeah, that's right, instead of being patriots you tea bagging morons are actually DEEK SUCKAZ. What a bunch of lemmingnesque stooges.
Been voting with my wallet for the last 10 years against Hostess. All their @!$%#, stuff they call baked good, has been tasting like the toast in the headlines for that long and maybe more.
Except for the twinkies, which always tasted great, and are even better deep-fried!
So it looks like twinkies is down the Drain.
Romney got his butt kicked by Obama because of ignorant comments and ideology of the GOP. Our economy is recovering and with no thanks to the crazies of the GOP. We'll see what they do in the next 4 years to help our country recover...more obstructionism? Cantor, Ryan, McConnell, McCain, and Boehner are all in for a tough time and I LOVE IT! The GOP is running around bashing each other now... trying to show that they care about this country. What a bunch of BS. They could care less.
Their margins were not sustainable with the impending Obamacare tax, they would have had to make part time workers out of full time workers anyway in the not too distant future to stay competitive.
Only in government, the land of unicorns and unions can you bleed money indefinitely and stay in business. Businesses MUST make money or there is no business. Hard to grasp for many, but that's the harsh reality.
And did anybody notice that no union leaders lost their job? They're still secure in their wages despite the bloodbath. Sure was easy for them to play hardball with the livelihood of others, yet nobody whines about that.
Oh well, maybe they can hand out Obamaphones to all the laid of workers while collecting their hefty wages paid by union dues and then go home and have a nice comfy sleep.
The republicans are looking for the reason they've lost to president obama ??? let me help you guys , first thing , drop MORONI , and turn back to JESUS CHRIST !!! drop the GREED , drop the LYING , drop the HIPOCRICY , drop the SELFISHNESS , drop the SELF RIGHTEOUSNESS , drop the WELFARE ENTITLEMENT FOR THE RICH , drop the ARROGANCE , drop the OFFSHORE TAX DODGING , drop the OBSTUCTIONIST. IN OTHER WORDS , '' DROP THE TEA PARTY '' , AND IT WILL GIVE YA'LL A FIGHTING CHANCE !!!!!!!
The story is again,...CEO's granting themselves huge raises at the expense of the workers.
I say GOOD RIDDANCE to Hostess,...and any other company that is not being fair with their workers and their pay,....any company who will not bargain fairly with the labor that drives their productivity.
The workers of America need to join together in fighting this war.
YES ! There will be casualties,...jobs lost as a result of corporate leaders unwilling to be reasonable about paying their people.
We need to be a resolved and willing to sacrifice in this war against the middle/working class as we would be against foreign invaders,....willing to sacrifice,...willing to face a collapse and then re-build. To give in to the threats and fear mongering of companies such as Hostess is to offer the American worker as a sacrifice to elitism and corporate greed.
The American worker deserves better !!!!!
THE PROBLEM IS NOT RE-DISTRIBUTION OF WEALTH,...IT'S DISTRIBUTION OF THE WEALTH IN THE FIRST PLACE.
When companies turn record profits,...the few reap all of the profits and wages remain stagnant. This has been the way for the last 15 to 20 years.
The trickle down is a lie. It doesn't work,...and never has. It is a myth.
WORKERS OF AMERICA UNITE.
Dougie,...your reply is intentionally shortsighted and biased. It over simplifies the situation so that you can crush all opposing viewpoints.
That is a typical conservative retort.
The facts is,...that an increasingly large percentage of America's wealth is funneling right to the upper tier of the wealthy.
How is that happening ?
THAT is the question that conservatives like you don't want people thinking about.
Corporate policy is to continually minimize their "human resource" expense,....in order to hand the profits to those at the top. Salaries and bonuses have skyrocketed and wages have remained stagnant, so for all of our hard work,....the non-management cut of that profit has shrunk by proportion.
The reason,...the need for union organization is about "CHECKS AND BALANCES". Like in many situations,...if one side holds all of the power the other side gets abused and suffers.
Go back and study your history, Doug. There are VERY good reasons why unions were formed. Abuse by the unbridled greed of top management is WELL documented.
There can be abuse on both sides as you state,...but without unions - the worker gets hosed.
I hope and pray that Obama begins to usher in a new era of labor organization. We could get a lot of good things in place in four years.
WORKERS UNITE !!!!
Let's hold the door for those J.O.s and give the country the chance to adjust to what will become the new norm.
Corporate America is just holding their breath and stomping around as if in a tantrum. Eventually,...once we string several democratic presidential terms together (Hillary '16 and '20) - they will have to face the fact that the people have wised up and there will be no returning to the middle class destroying policies of the GW Bush corporate welfare era.
The U.S.A. is still the best game in town,...and we are the greatest economic power. When we unite and work together, we change things,....we can't be ignored.
The American worker needs to unite forcefully,...and refuse to be cut out of the financially equation . Our productivity drives big business.
THE AMERICAN WORKER MAKES IT HAPPEN.
UNITE THE AMERICAN WORKFORCE.
President Obama,... we need a new era of union organization. Corporate management has grown too powerful, and is undermining the future of the American middle class with elitism and greed.
It may get ugly, but this is the time to make a stand before it gets much worse.
Doug,...we don't give a r*t's *ss what you are blabbering about - just stay out of our way.
For all you anti-capitalist fools out there, whose money and assets do you think a company's are? News flash, it's either the stockholders or the owners. Either way, the worker is but a tool to make money in the employment of those assets. In this case, workers chose to be a bit too greedy and the capital's owner decided to employ it elsewhere. End of story.
Look at Lee Iacocca at Chrysler and even Reagan with the air traffic controllers. I have plenty of jobs at $x/hour and I have none at $x+. You don't want to work for x, no problem. Bye.
Where this notion came into play that society is entitled to a piece of the entrepreneur's pie, when society did nothing to build the business (in spite of the rantings of Heir Obama), is so, well, Obama-like. A passing fad that will go down in history as the failed ideas of a disgraced socialist.
Unions do need to change. However, the two of you really don't see the whole picture. I hope Doug and America Enema never work for a company like ENRON. The new accounting laws allowed it to happen. It can happen again. That was everyone's 401K money ENRON took. The professional worker lost out as well. This company Hostess may have some real issues. In other words not a good investment. The people were stupid to stay so long.
America'sEnema. You could not have chosen a more appropriate handle, and it is quite obvious that you have spent a lot of time as the business end of that device. The only question is whose colon you were irrigating? And the fact is that your posts truly represent the natural outcome of that.
The story is - yet again,...CEO's granting themselves huge raises at the expense of the workers.
I say GOOD RIDDANCE to Hostess,...and any other company that is not being fair with their workers and their pay,....any company who will not bargain fairly with the labor that drives their productivity.
The workers of America need to join together in fighting this war.
YES ! There will be casualties,...jobs lost as a result of corporate leaders unwilling to be reasonable about paying their people.
We need to be a resolved and willing to sacrifice in this war against the middle/working class as we would be against foreign invaders,....willing to sacrifice,...willing to face a collapse and then re-build. To give in to the threats and fear mongering of companies such as Hostess is to offer the American worker as a sacrifice to elitism and corporate greed.
The American worker deserves better !!!!!
THE PROBLEM IS NOT RE-DISTRIBUTION OF WEALTH,...IT'S DISTRIBUTION OF THE WEALTH IN THE FIRST PLACE.
When companies turn record profits,...the few reap all of the profits and wages remain stagnant. This has been the way for the last 15 to 20 years.
The trickle down is a lie. It doesn't work,...and never has. It is a myth.
WORKERS OF AMERICA UNITE.
Doug J,...the paid conservative blog watchdog has spoken.
The conservatives are still "trying" to control the message,...even though they LOST - big time 331 electoral votes to 206.
That is so sweet. "Whooped" is the word.
The people have spoken, and the movement is GAINING momentum. I would bet that Hillary Clinton will be elected in 2016 and 2020.
Here's your hat. What's your hurry ?
Nice try, Dougie.
We disagree.
I'm done with you. Go back to sleep.
Do not let these scabs scare you serfdom101.
This is an example of how going on strike can seriously backfire...now they are jobless.
Perhaps someone smart should've told them, "A pay cut is better than no pay."
Not everyone comes from Wisconsin.
No more twinkies? This is an economic catastrophe which deseves presidential attention!
Don't worry, it'll just be another Obama executive order.
Man, Doug... You and serf are both f'd up. This coming from a liberal who also thinks unions suck. It's like most of the people here look no farther than their imagination for facts.
For your part, Doug, hostess was in bankruptcy once before, in 2004. It came out in 2009 already in dire financial straits. It had nothing to do with Obama.
For your part, serf, it was taken out of bankruptcy by Ripplewood Holding, founded by Timothy Collins, a major Democratic contributor. Ripplewood was in the business of buying distressed, unionized companies with the goal of turning them around to save union jobs. They dumped hoards of money into Hostess. More financing came from two hedge funds run by Monarch and Silver Point, both debt investors. Without union concessions, they couldn't make any money on their investment. Would you invest your money in a fund with zero return? Didn't think so.
Then there's this red herring of yours about CEOs and raises. I say red herring because if you were an employee working for Hostess and the CEO gave himself a $1,000,000.00 pay raise that would translate to 0.03 cents, yes cents, per hour. Would you quit your job over 3/100ths of a cent per hour? If you would I would question your sanity. Then there was the 2 billion in unfunded pension liability. Who set the pension pay-ins? The (say it with me) uuunion.
So, you have a company whose only chance to save itself is to modernize equipment, R&D new product lines and reduce it's labor costs. The first two were out because Ripplewood and the hedge funds wouldn't loan any more money without union concessions. Hostess made some pretty good concessions and the teamsters were playing ball but, the bakers union wasn't happy. Union management had them convinced that any concessions would be a detriment to the entire union, country-wide. When that happened, Ripplewood stopped negotiating, leaving the two hedge funds. Then when the bakers went on strike, the hedge funds decided it just wasn't worth the trouble.
So, yeah, it really is the bakers union's fault that 18,500 people are going to be jobless.
Maybe you folks should drop the "typical conservative"/ "libtard" crap and pick up a financial magazine once in a while. Then the country might get someplace.
Very nice post. Thanks, it is the best one here.
I Twink I will keep my job. Now I Wonder if I have a job!!!!
good riddance to the union workers, they got exactly what they deserved. Those greedy pigs ended up former 12 different unions, TWELVE, all designed to squeeze the company. You guys are complaining about the owners of the company getting paid how about the union leaders getting millions and their members getting nothing.
Unions kill companies.
Years ago Mrs. Hostess became a widow; her late husband was a baker, and ran a good bakery business on the back of property, that had been inherited from long line of family bakers. Mrs. Hostess wanted to have the children take over the business someday in the future. The home and back property were long since paid off, and she had no debts, and was always careful to set aside pensions for the day when her long and loyal employees needed to retire. However none of the children wanted to be bakers, or managers, and she had the family name and inheritance.
As time went on it was needed to take on a manager, but he had other ambitions, he wanted to taste NY style caraway rye with dill, but knew that if he varied away from the tasty sweet treats the company was famous for that revenues would suffer. Then seeing that the house and assets paid for and that future liabilities were all but perfect he convinced Mrs. Hostess to take out a home mortgage for his rye bread venture. Unfortunately the bread was tasteless because he adapted the same baking process used in what customer wanted 'tasteless white' bread that children teething and old great grandpa could eat with his dentures in. Taking this loss he got in touch with the NY lender who made the loan and even earlier thought of would be nice if he could get a NY style caraway rye with dill bread made. After going over the books, the NY lender came up with an even bigger loan, by padding the first loan as a risk free venture, including the funds that covered the future liabilities, and the capital assets of the corporation and even the home estate. Mrs. Hostess getting on in years forgot she had children, and agreed to the corporate takeover, her manager even retired suddenly. By this time the corporation has so much debt that the only out was to repackage the assets, and negotiate with the workers to draw down wages, benefits, heath care and work for wages low enough that they could qualify for food stamps. This worked, and the company was sold and the lender paid well and left the scene. Once the new company took charge, it realized that it had more debt that could ever be paid, could not find another buyer, or count on the employees any more.
Because the laws make bad management a god given right to exist and not to be liable, because bankruptcy laws are used to leverage more loans, and because the Judge cannot rule against the existing laws. It is not possible to stick the lender with making a bad loan, just as you cannot expect to stick your inflated unsecured mortgage holder with the loss because the same mortgage holder did not assess you property correctly.
This happened 'because it can', there is no law against making bad loans, and the law protects the lender no matter how stupid the loan or business decision was. The Mrs. Hostess case merely means that good business decisions, good loans, good investments and good auditing are the hard ware to make money. Out and out legalized robbery, is made legal and that is all …
Im sorry , but a job is a job, they are considered unskilled assembly workers , Just because a company make money and they pay them min wage and above, that should be fine. alot of people beleive thier worth more than actually are, if you actually had a an important skill do you think they would have worked there?
Who really f$^#ing cares? There's plenty other turds for you pigs to eat. Try zingers, or sno-balls, or whatever other sugar laden pastries with wax based frosting and insecticide right in the batter.
The entire US is just becoming one big Bain Capital.....and making owners and stockholders rich at the expense of American jobs.
"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 greedy American business man strikes again. "Imported Twinkies" Has a certain ring to it,don't you think?
Good riddance to a crappy company, making crappy products, managed by crappy idiots, and finally put in the ground by crappy unions. I don't care at all about them going out of business, as it is to me the same as a toxic coal mine going out of business. One less danger to humanity, and we are all better off for it. It is to laugh. And I do. Die, Hostess, die!
Thank you to the union leaders. How do you plan to find new jobs for all the displaced workers? Your members were already paid more than most bakery workers. Greed when it is hard times doesn't usually work. You proved that by telling your worker-members to stand strong and picket. See how it turned out? Hey, I'm just saying . . .
Greed in hard times certainly seems to work well for management, though. Or haven't you noticed? I don't see any of them starving. Do you?
The union members have ensured their children will never work for Hostess.
Unionism has always been about stealing from children for the benefit of adults. Seniority rules are all about forcing the young to act as employment shields for the benefit of the old.
Child labor laws were not passed to protect children from the hazards of the factory but rather to protect grownups from competition. What those laws really did for children was to force them to their "Next Best Option" which back in the 1930's was often fates far worse than their lives in the factories.
Unions have done nothing but degrade the general human condition. Unions are to companies what communism is to nations.
good riddance twinkies. even as a kid i hated them! i was strictly a funny-bones or yodels kinda boy. and wonderbread? the extra long family loaf i would squeeze into a softball, and put it back on the shelf.
in seriousness, a typical shame of the scum of capitalists that are destroying america. mitt romney probably feeling proud, making some big bucks off it.
Funny Bones and Yodels are going too. Hostess owned several brand names - all gone!
Thanks to Prez Obummer, the liberal progressives and the piggish mega-Unions, Ayn Rand's prophetic novel "Atlas Shrugged" is coming to life. Yes, keep blaming the rich and the greedy Wall Streeters as our country and its economy continues sliding into oblivion faster and faster.
Read the book, folks. It won't all fit on Twitter.