Fear not for the Twinkie. In all likelihood it will outlive us all.
The same cannot be said for Hostess Brands, the bankrupt baker responsible for Twinkies, Wonder Bread and other goods. The company said Friday it has asked a bankruptcy judge for permission to go out of business and lay off 18,500 workers, blaming a labor strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.
In the Chicago area, Hostess employs about 300 workers making CupCakes, HoHos and Honey Buns in Schiller Park. Hostess also has a bakery in Hodgkins, where 325 workers make Beefsteak, Butternut, Home Pride, Nature's Pride and Wonder breads. The company's connection to Chicago is more than crust or frosting deep: the Twinkie was invented in the Chicago area in 1930.
"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Gregory Rayburn, Hostess' chief executive, said in a statement.
Texas-based Hostess, which has about $2.5 billion in sales, said it had suspended operations at all of its 33 plants around the United States as it moves to start liquidating assets. The expectation is that other baking companies or investors will scarf down the brands, giving its products a good chance at a new life under different ownership.
"We'll be selling the brands and as much of the infrastructure as we can," said company spokesman Lance Ignon. "There is value in the brands."
Gary Stibel, founder of the New England Consulting Group, said "the jury's still out," on the company's future, adding that the firm may be able to "work something out in the eleventh hour."
"There's a lot of activity going on," said Stibel, who added that his firm is involved in the conversations, but not representing Hostess. "Let's just say there are a lot of folks who are going to be working over the weekend."
Stibel said the only thing for certain is that "these brands aren't going anywhere."
"In the final analysis, these brands will return," he said. "Tylenol came back, Coke came back, and many of (the Hostess brands) will do better once this is over with."
Among the company's other brands: Ho Hos, Ding Dongs, Sno Balls, Donettes, Dolly Madison Zingers and Drake's snack cakes.
The closure of Hostess plants creates a complication for other companies, including Supervalu Inc., parent of the Jewel supermarket chain. Hostess was the contract baker for Supervalu's private label Essential Everyday breads, sold in Jewel.
"It is possible that in some markets there may be some shortages of Essential Everyday, but we are quickly working to implement our contingency plan," spokesman Mike Siemienas said.
The dispute that closed Hostess focused on cost-cutting efforts by a company that has been in bankruptcy for all but three of the past eight years. Plagued by high labor and pension expenses, the company had sought numerous concessions from workers and needed more.
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