Attempts To Broker Deal At Hostess Crumble, Company Officially Closing After 82 Years
Irving, TX (WIBX) – Hostess Brands and the Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) failed to reach an agreement after being order by a United States Bankruptcy Judge to give it one more try.
Through a statement on its website company officials blamed the shutdown on BCTGM, saying it “…initiated a nationwide strike that crippled the (c)ompany’s ability to produce and deliver products at multiple facilities.” The statement included that “Hostess Brands is unprofitable under its current cost structure, much of which is determined by union wages and pension costs.”
For its part the union released a statement as well from BCTGM International Union President Frank Hurt. The statement begins with the following: “Hostess’s announcement that it is liquidating the company is a deep disappointment for all of our Hostess members. While Hostess management wants to blame our members for the demise of the company, the truth is that had it not been for the valiant efforts of our members over the last eight years, including accepting significant wage and benefit concessions after the first bankruptcy, this company would have gone out of business long ago.”
A final attempt at negotiation was made on November 21, 2012. After talks failed United States Bankruptcy Judge Robert Drain gave the company the go-ahead to liquidate, a process which the company says could take up to a year.
Approximately 18,500 jobs will be lost as a result of the shutdown, with 33 bakeries, 565 distribution centers, 5,500 delivery routes, and 570 bakery outlets expected to close. Many small, local outlets have already closed their doors for good.
Whether any of the brands associated with Hostess continue remains to be seen. Hostess has identified representatives to oversee prospective bids on both its brands as well as its assets.