Daily Dispatches
Associated Press/Photo by Paul Sakuma

Twinkie maker closes shop

Business

You may have eaten your last Twinkie, Ding Dong, or slice of Wonder or Nature’s Pride bread. Hostess Brands Inc., the longtime maker of these and other baked goods, is shutting down production lines and liquidating assets after a bakers union refused to accept an employee contract and end a strike on Thursday afternoon. The closure of 33 plants will result in swift layoffs for most of the company’s 18,500 workers.

Hostess filed for Chapter 11 bankruptcy in January, its second filing in a decade. After months of haggling, the company’s largest union, the International Brotherhood of Teamsters, reluctantly accepted a contract restricting wages, benefits, and pensions. A second union representing Hostess workers—the Bakery, Confectionery, Tobacco Workers and Grain Millers Union—went on strike Nov. 9 to protest the deal’s terms. Executives at Hostess issued an ultimatum: End the strike by 5 p.m. Eastern time Thursday afternoon or the company would close for good. When the deadline arrived, union strikers outside an Indianapolis Hostess plant were still chanting, “No pension, no deal!”

On Friday morning, Hostess filed a request in New York asking a judge to allow it to close its bakeries.

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“We deeply regret the necessity of today’s decision, but we don’t have the financial resources to weather an extended nationwide strike,” CEO Gregory Rayburn said in a statement. Rayburn took the reigns earlier this year, intending to reorganize the company after former CEO Brian J Driscoll resigned during bankruptcy proceedings in March.

The bakers union president, Frank Hurt, said the downfall of the 82-year-old bakery was due to “financial and operational mismanagement.” Hostess executives blamed it on burdensome pension and healthcare costs. Hostess also faced a challenge from changing consumer preferences—a shift away from fattening pastries to less sugary snacks.

It’s possible some iconic Hostess brands will stick around, though. As part of the bankruptcy outcome, another company may buy and begin making products such as Twinkies. Healthy or not, the treats have an established customer base that can’t resist a little cream-filled sponge cake now and then.

Daniel James Devine
Daniel James Devine

Daniel is a reporter for WORLD who covers science, technology, and other topics in the Midwest from his home base in Indiana. Follow Daniel on Twitter @DanJamDevine.

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