Hostess Brands blames shutdown on strike

Company asks bankruptcy court permission to close business, sell off assets

Published On: Nov 16 2012 04:39:52 PM EST   Updated On: Nov 17 2012 07:45:33 AM EST
Northside Hostess strike pic
JACKSONVILLE, Fla. -

Hostess Brands has closed its north Jacksonville bakery along with dozens of other plants across the country and asked the U.S. Bankruptcy Court to allow it to go out of business and sell all its assets -- including its iconic Twinkies and Wonder Bread trademarks.

Hostess, the maker of 30 products including Ding Dongs, Ho Hos, Nature's Price and Dolly Madison, had warned employees it would move to shut down its operations and sell its brands if striking workers didn't allow plants to resume normal operations by Thursday evening. The deadline passed without a deal. Thousands of union members -- including nearly 100 in Jacksonville -- went on strike last week after rejecting a contract offer that slashed wages and benefits.

"The board of directors authorized the wind down of Hostess Brands to preserve and maximize the value of the estate after one of the company's largest unions, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, initiated a nationwide strike that crippled the company's ability to produce and deliver products at multiple facilities," Hostess said on its website.

Workers at Hostess' Dunn Avenue bakery went off the job last weekend.  They told Channel 4's Tarik Minor they weren't asking for a pay increase, they just wanted to continue receiving their current wage and blamed the company's problems on making bad investments after its previous bankruptcy in 2004.

CEO Greg Rayburn says there's no buyer waiting in the wings to rescue the company, but that there's been interest in buying some of its 30 brands.

Hostess was hurt by a consumer shift toward more wholesome, fresh products. And it was saddled with high pension, wage and medical costs related to its unionized workforce. Rayburn said the company was operating on thin margins, and that the strike was a final blow.

The closing will mean the loss of about 18,500 jobs -- almost 200 in Jacksonville.

The company's roughly 500 bakery outlet stores -- including eight in Northeast Florida -- will stay open for several days to sell remaining products.