(Image Source: Bloomberg)

BY JOHN O’CONNOR

ANCHOR LOGAN TITTLE

Twinkies may last forever, but the same can’t be said for the company that makes them. Hostess Brand Incorporated says it ceased all operations Friday after a long labor dispute crippled the company. MSNBC has more.

“Bakery operations have been suspended at all plants, and now the company is focused on selling its assets. That includes 33 bakeries and 565 distribution centers … ” 

The New York Times notes since filing for Chapter 11 bankruptcy protection in January, Hostess has been trying to renegotiate its labor contracts in order to cut down costs.

“The so-called liquidation will probably spell the end of Hostess, an 82-year-old company that has endured wars, countless diet fads and even an earlier Chapter 11 filing. Although the company could theoretically negotiate a last-minute deal with the union, Hostess is moving to shut factories and lay off a large majority of its 18,500 employees.” 

Hostess CEO Gregory Rayburn tells CNN at the beginning of the week, some bakers did cross the picket lines and return to work, but that it wasn’t quite enough people to keep the company afloat.

“I was hopeful that that appeal would resonate and people would understand that at the end of the day if people really didn’t want to work there they could come back and work and find another job while they have a job.”  

An economist on Fox News calls the situation an example of how many unions misunderstand their duty and purpose.

“A union that costs workers its jobs isn’t much of union. How do you tell employees ‘oh look, by the way we just cost you your job because we took a firm stand against the management bosses.’ What good does that do anyone?”

But a writer for The Washington Post explains the gap in trust between management and the union may have grown too wide for bakers to heed the company’s warnings.

“The last CEO, Brian Driscoll, had seen a big salary increase. He was abruptly replaced by Rayburn earlier this year, who was the sixth head of the company in the last decade. That kind of turnover is not typically a good environment for labor relations, in which a history of past successes between leaders and unions can be drawn upon for future goodwill.”

Aside from the loss of more than 18,000 Americans’ jobs, Forbes’ Robert Wood says Americans should cringe at the thought of losing these legendary junk foods forever.  

“Some things are sacred to American culture. Quite apart from many other Hostess products, Twinkies stand alone. Indeed, as a cultural icon—let alone as disaster foodstuffs that never spoil—Twinkies need saving.” 

And according to Businessweek, Wood may get his wish. Several rival companies are already lining up at Hostess’ door in hopes of acquiring some of its assets, including the ever-popular Twinkie. 

Hostess Ceases Operations, Looks to Liquidate Assets

by John O'Connor
1
Transcript
Nov 17, 2012

Hostess Ceases Operations, Looks to Liquidate Assets

 

(Image Source: Bloomberg)

BY JOHN O’CONNOR

ANCHOR LOGAN TITTLE

Twinkies may last forever, but the same can’t be said for the company that makes them. Hostess Brand Incorporated says it ceased all operations Friday after a long labor dispute crippled the company. MSNBC has more.

“Bakery operations have been suspended at all plants, and now the company is focused on selling its assets. That includes 33 bakeries and 565 distribution centers … ” 

The New York Times notes since filing for Chapter 11 bankruptcy protection in January, Hostess has been trying to renegotiate its labor contracts in order to cut down costs.

“The so-called liquidation will probably spell the end of Hostess, an 82-year-old company that has endured wars, countless diet fads and even an earlier Chapter 11 filing. Although the company could theoretically negotiate a last-minute deal with the union, Hostess is moving to shut factories and lay off a large majority of its 18,500 employees.” 

Hostess CEO Gregory Rayburn tells CNN at the beginning of the week, some bakers did cross the picket lines and return to work, but that it wasn’t quite enough people to keep the company afloat.

“I was hopeful that that appeal would resonate and people would understand that at the end of the day if people really didn’t want to work there they could come back and work and find another job while they have a job.”  

An economist on Fox News calls the situation an example of how many unions misunderstand their duty and purpose.

“A union that costs workers its jobs isn’t much of union. How do you tell employees ‘oh look, by the way we just cost you your job because we took a firm stand against the management bosses.’ What good does that do anyone?”

But a writer for The Washington Post explains the gap in trust between management and the union may have grown too wide for bakers to heed the company’s warnings.

“The last CEO, Brian Driscoll, had seen a big salary increase. He was abruptly replaced by Rayburn earlier this year, who was the sixth head of the company in the last decade. That kind of turnover is not typically a good environment for labor relations, in which a history of past successes between leaders and unions can be drawn upon for future goodwill.”

Aside from the loss of more than 18,000 Americans’ jobs, Forbes’ Robert Wood says Americans should cringe at the thought of losing these legendary junk foods forever.  

“Some things are sacred to American culture. Quite apart from many other Hostess products, Twinkies stand alone. Indeed, as a cultural icon—let alone as disaster foodstuffs that never spoil—Twinkies need saving.” 

And according to Businessweek, Wood may get his wish. Several rival companies are already lining up at Hostess’ door in hopes of acquiring some of its assets, including the ever-popular Twinkie. 

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