Hostess Going Out Of Business; Gov. Christie Refuses To Talk About Twinkies
NEW YORK (CBSNewYork/AP) – Twinkies may not last forever after all.
Texas-based Hostess Brands Inc., which makes Ding Dongs, Wonder Bread and other snacks, filed a motion Friday with U.S. Bankruptcy Court seeking permission to shutter its operations. The move comes after the company said striking workers across the country crippled its ability to maintain production.
Hostess had warned employees that it would file a motion in U.S. Bankruptcy Court to unwind its business and sell assets if plant operations didn’t return to normal levels by Thursday evening, CBS Chicago reported.
The closing would mean the loss of about 18,500 jobs. The company said employees at its 33 factories were sent home and operations were suspended Friday, adding its roughly 500 bakery outlet stores will stay open for several days to sell remaining products.
Hostess sent layoff notices to more than 300 workers at its facility in Wayne, N.J., according to The Record newspaper, WCBS 880′s Levon Putney reported.
Augosto Santos worked for 36 years at the plant in Wayne, where employees were carrying out their personal belongings on Friday, CBS 2′s John Slattery reported.
“They threw us out, shut us out, shut us down,” said Santos, who was laid off in 2007.
“They keep cutting, kept cutting, kept cutting and we can’t take it no more,” former employee Moses Cappard added.
WCBS 880′s Levon Putney Reports
When WCBS 880′s Putney asked N.J. Gov. Chris Christie what he thought about the job losses, Christie had a rather colorful answer:
“I’m on Saturday Night Live enough. You think you’re getting me behind this microphone, having me talk about Twinkies? This is a set up man. I know it.”
It wasn’t a setup, Putney reported, although understandable that the governor didn’t want to touch the issue given the late night comedy jokes about his weight.
“You people are the worst,” Christie continued. “You’re not getting me to do that. No way…Don’t go to devil dogs…don’t try it,” Christie said to another reporter.
The end of Hostess would also mean the loss of 200 jobs in Connecticut.
Kevin O’Toole, secretary-treasurer of Local 145 in Stratford, said Friday was the last day for mechanics, drivers and others.
Hostess has plants in Bridgeport, Cheshire, East Windsor, Norwich and Uncasville.
“We saw it coming, but we didn’t think that they would do it like that,” said Marisol Sanchez, who has worked for the company’s warehouse and store in Bridgeport for 23 years. “You know, on the holidays, it’s not fair.”
WCBS 880′s John Metaxas: Bridgeport Workers Out Of Jobs
Workers like Sanchez said they are bitter over the company’s decision to shut down and, even more so, that management is blaming the union.
1010 WINS’ Al Jones reports
“It’s really unfair. We made a lot of CEOs rich out there. They took our money. They took everything we had and now we just get slapped in the face during the holidays,” she told WCBS 880 reporter John Metaxas.
They told of giving back hundreds of dollars from their paychecks to the company to save their jobs, concessions that they said were never enough for management.
“The company, they were going to do what they were going to do anyway, and they had a plan and they didn’t give anybody a chance. We gave back, they didn’t want to listen,” another worker said.
Now, their jobs are gone.
Hostess chief executive officer Greg Rayburn said in an interview that there was no buyer waiting to buy the company. But without giving details, he said that there has been interest in some of its 30 brands, which include Dolly Madison, Drake’s and Nature’s Pride snacks.
Rayburn said the financial impact of the strike makes it too late to save the company even if workers have a change of heart. That’s because the company was operating on thin margins and stalling production meant the loss of critical sales.
“The strike impacted us in terms of cash flow. The plants were operating well below 50 percent capacity and customers were not getting products,” Rayburn said.
Brand strategist Adam Hanft told CBS 2′s Slattery that Hostess lost its way.
“The company never focused on the brands. The brands got into this death spiral,” Adam Hanft said.
After more than 80 years in business, Hostess, based in Irving, Texas, filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade, as it struggled with increased competition, Americans’ move toward healthier eating and the high pension, wage and medical costs related to its unionized workforce.
The move to liquidate comes after a long battle with its unions. Thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike last week after rejecting a contract offer that slashed wages. The bakers union represents about 30 percent of the company’s workforce.
Rayburn said the union’s leadership had misled members into believing there was a buyer in the wings who would rescue the company. He said the union hadn’t returned the company’s calls for the past month.
A representative for the bakers union did not immediately return a call seeking comment.
Although many workers decided to cross picket lines this week, the company said it wasn’t enough to keep operations at normal levels; three plants were closed earlier this week.
The company had reached a contract agreement with its largest union, the International Brotherhood of Teamsters. The Teamsters had urged the bakery union this week to hold a secret ballot on whether to continue striking.
“There’s no other alternative,” Rayburn said.
The Hostess products will stay on store shelves for as long as they last, which may be just a few days.
For people who grew up on Twinkies, Friday’s news came as a big surprise.
“My kids, they can’t bring anything sugary to school, and now they can’t have Twinkies, something we all grew up with,” Paul Maione of Wayne told CBS 2′s Slattery.
“I’ll probably go to the store and get a box and cherish the last box of Twinkees I can eat,” added Ava Kodrich of Fort Lee, N.J.
Also hurting the company is the fact that more Americans are trying to cut precisely these types of products out of their diets, CBS 2′s Dave Carlin reported.
“I’ve never had a Twinkie — never ever,” said Rob Medich of Midtown.
“I think it’s better to eat apples and bananas,” Upper West Side resident Joy Edwards added.
“I think we can do without them in this day and age,” Katie Robinson said.
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