For Hostess Brands Things Are Tough All Over

And it’s getting tougher. At least for thousands of folks who work hard at baking, distributing, delivering, and selling Hostess Brands of foodstuffs.

The Wall Street Journal is reporting that Hostess, already in near collapse, will close and petition the bankruptcy court to allow sales of all inventory, equipment, facilities, and any other assets such as brand names.

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In a letter to employees, CEO Gregory F. Rayburn said this.

To All Hostess Brands Employees:

I have very disappointing news. Hostess Brands must immediately begin to wind down all operations and conduct an orderly sale of all company assets. Many people have worked incredibly long and hard to keep this from happening, but now Hostess Brands has no other alternative than to begin the process of winding down and preparing for the sale of our iconic brands.

As you know, for many months the Company has been working with our unions, lenders and other stakeholders to reach a consensual resolution to legacy costs and labor contracts. Despite everyone’s considerable efforts to move Hostess out of its restructuring, when we began implementing the Company’s last, best and final offer, the Bakers Union chose to stage a crippling strike. This affected Hostess’ ability to continue to make products and service its customers’ needs and pushed Hostess into a Wind Down scenario. As a result, we are forced to proceed with an orderly wind down and sale of our operations and assets. We deeply regret taking this action. But we simply cannot continue to operate without the ability to produce or deliver our products.

There’s no way to soften the fact that this will hurt every Hostess Brands employee. All Hostess Brands employees will eventually lose their jobs – some sooner than others. Unfortunately, because we are in bankruptcy, there are severe limits on the assistance the Company can offer you at this time. We have attached a Question and Answer document and certain contact information related to employee issues, which provide all the information that we currently have available to help guide you through this difficult time. It includes information on how to contact state unemployment agencies and contact information for other resources. You can also find all available information on the Internet at

I wish each of you the best.
Gregory F. Rayburn

Hostess has been in very rocky shape for years, including one previous bankruptcy case.

WSJ reports “The specter of liquidation has loomed large since the bankruptcy case, Hostess’s second in recent years, kicked off in January. From the start, the company has warned that labor cuts were its only chance to survive and said the only other possible outcome was a full shutdown of the business. Both Hostess and its largest union, the International Brotherhood of Teamsters, have long agreed a widespread strike would spell the end of the company.

While the prognosis was never good, all the unions were working toward a compromise that could save the company and a bunch of jobs.

All but one. It’s second largest union behind the Teamsters is the Bakery, Confectionery, Tobacco Workers and Grain Millers Union. They refused to go along, even though they had been told the company could not survive in the current situation.

The Bakery, Confectionery, Tobacco Workers and Grain Millers Union went on strike, forcing the immediate closing of three plants, and with thirteen operating below 50%.

Mr. Rayburn addressed the company’s struggles to the Wall Street Journal reporter.

Mr. Rayburn blamed a host of factors, from years of mismanagement to a lack of capital investment to legacy labor costs, for the demise of the company, founded in 1927 as Schulze Baking Co.
“I think there’s blame to go around everywhere,” he said. “There’s almost nowhere you can look that didn’t play a role in the company ending up in this position.”

The flagship product line is a pretty hefty asset and will quite likely be sold easily enough. So you should soon see Twinkies®, CupCakes, Ding Dongs®, Ho Ho’s®, Sno Balls® and Donettes® confections back on your shelves. And the bread aisle will eventually feature Wonder®, Nature’s Pride ®, Merita®, Home Pride®, Butternut®, brands we all are familiar with.

Not much to console your local Hostess truck delivery guy though right here at Christmas time. The wind down means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States.

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