Hostess to Shutter Three Bakeries Over Strike
Union says company spreading misinformation about closures
IRVING, Texas -- Twinkies maker Hostess Brands Inc. said that it is permanently closing three bakeries, in Seattle, St. Louis and Cincinnati, as a result of a nationwide strike initiated on Nov. 9 by the Bakery, Confectionery, Tobacco Workers & Grain Millers International Union (BCTGM) that has prevented the facilities from producing and delivering products.
The BCTGM said that Hostess is falsely claiming that its decision to close the bakeries is the result of the strike. The union called it "a desperate attempt to break the solidarity and resolve of striking BCTGM members across the country."
The union said that the company was planning to close at least nine bakeries as part of its reorganization plan, but that it had not specified which ones.
Hostess, which operates 36 bakeries, filed for Chapter 11 bankruptcy protection for the second time in January. Founded in 1930, it has approximately $860 million in debt. It filed its first bankruptcy in 2004, citing falling sales, rising ingredient costs, excess capacity and high labor expenses.
Hostess said in September that employee members of the International Brotherhood of Teamsters (IBT) voted to ratify changes to their bargaining agreement that, if implemented throughout the company, would enable Hostess to continue operating.
The company also said at the time that it intended to file a motion with the U.S. Bankruptcy Court to impose the same changes ratified by the IBT on employees represented by the BCTGM, which voted to reject them.
If granted, the relief, along with similar relief requested of the company's other, smaller unions, would enable the company and its employees to avoid liquidation and successfully emerge from Chapter 11.
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"Our customers will not be affected [by the three bakery closures] because we will continue to serve them from other Hostess Brands bakeries, but sadly, this action will result in the permanent closure of three facilities and the loss of 627 jobs," said Hostess Brands CEO Gregory F. Rayburn. "We deeply regret this decision, but we have repeatedly explained that we will close facilities that are no longer able to produce and deliver products because of a work stoppage--and that we will close the entire company if widespread strikes cripple our business."
The Seattle facility employs 110 people and produces Hostess cake products; the St. Louis facility employs 365 people and produces Hostess cakes, Nature's Pride and Wonder breads; the Cincinnati facility employs 152 people and produces Butternut, Beefsteak Wonder breads.
"Some employees are apparently under the misimpression that if they force Hostess to liquidate, another company will buy our bakeries and offer them employment," Rayburn said. "The fact is, the bakery industry already has far too much capacity, and there is a strong risk that many of our facilities may never operate as bakeries again once they are closed. I believe the leadership of the Bakers Union knows this fact, but is willing to sacrifice its Hostess employees for the sake of preventing other bakery companies from asking for similar concessions."
He added, "That hardest part of the decision to close any facility is knowing that it will result in the loss of jobs for those Hostess Brands employees who did not support the strike and who wanted to help revive the company. They didn't ask for these strikes, but they are paying a terrible price for them."
Irving, Texas-based Hostess' products include brands such as Hostess, Wonder, Nature's Pride, Dolly Madison, Drake's, Butternut, Home Pride and Merita. Hostess Brands has approximately 18,300 employees and operated 36 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States.