(IRVING, Texas) — Hostess Brands Inc., the maker of the iconic snack Twinkies, announced Friday morning that it will liquidate the entire company because not enough striking employees returned to work by a Thursday evening deadline set by the company.
“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Hostess CEO Gregory Rayburn said in a statement. “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”
Hostess said it will seek bankruptcy court permission to close its business and sell its assets, “including its iconic brands and facilities.”
The company said “bakery operations have been suspended at all plants,” but already-baked products will continue to be delivered and sold.
On Wednesday, Rayburn said in a statement that “if sufficient employees do not return to work by 5 p.m., EST, on Thursday to restore normal operations, we will be forced to immediately move to liquidate the entire company.” The deadline came and went without enough striking workers returning.
The strikes began on Nov. 9, when Hostess imposed a contract that would cut workers’ wages by eight percent. The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) said the contract would also cut benefits by 27 to 32 percent.
Hostess, which is privately owned by two hedge funds, has struggled in recent years with two bankruptcy filings. The company said it “has done everything in its power to pursue a reorganization of its business as a going concern, including spending the better part of 18 months negotiating with its key constituents to obtain a consensual agreement.”
“It is now up to Hostess’ BCTGM-represented employees and Frank Hurt, their international president, to decide if they want to call off the strike and save this company, or cause massive financial harm to thousands of employees and their families,” Rayburn said Wednesday in announcing the deadline.
“Hostess Brands is making a mockery of the labor relations system that has been in place for nearly 100 years,” BCTGM President Frank Hurt said in a statement earlier this week. “Our members are not just striking for themselves, but for all unionized workers across North America who are covered by collective bargaining agreements.”
Friday’s announced decision means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States, the company said.
Copyright 2012 ABC News Radio
Paul Menser, BizMojo Idaho
Ivaylo Vezenkov and Lauren del Valle, CNN
Nate Eaton, EastIdahoNews.com