So Long Twinkies? Hostess on Brink of Closing Amid Strike

Justin Sullivan/Getty Images(NEW YORK) -- Hostess Brands Inc., the maker of the iconic snack treat Twinkies, has been paralyzed by workers' striking over diminished health benefits and longer work days.

Striking workers formed a picket line at the company's Sacramento, Calif., plant on Sunday, two days after the walkout began when the company imposed a contract that would cut wages by 8 percent.  The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union said the contract would also cut benefits by 27 to 32 percent.

The Twinkie has become such an iconic snack food that when she was first lady, Secretary of State Hillary Clinton included it in the millennium time capsule.  But Irving, Texas-based Hostess might soon be history after workers launched the strike Friday.

Hostess CEO Grey Rayburn said the faltering company cannot handle the industrial action.

"We've been very straight forward that the business can't withstand the significant work stoppage," he said.  "If this strike continues, there is certainly a risk that Hostess will go out of business."

Although many kids across the country haven't lost their taste for Twinkies -- the cake invented in the 1930s -- some moms have.  During the 1980s and 1990s, Hostess lost market share as mothers recognized there were healthier lunchbox choices than carbohydrate-rich snack cakes and white bread.

The company, which is privately owned by two hedge funds, has struggled in recent years with two bankruptcy filings, and is locked in a battle with the bakers union.

"Hostess Brands is making a mockery of the labor relations system that has been in place for nearly 100 years," union President Frank Hurt said in a statement.  "Our members are not just striking for themselves, but for all unionized workers across North America who are covered by collective bargaining agreements."

The union, which represents more than 80,000 industry workers, maintains that the company's policies will bring its members back to workplace standards of the 1950s.

Copyright 2012 ABC News Radio

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