Twinkies maker Hostess may liquidate after labor strikes
Bankrupt Twinkies maker Hostess Brands Inc. has some hard choices to make after spending the weekend dealing with worker strikes.
On Friday, Hostess-employed members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union began to strike nationwide, blaming a “horrendous contract” that they claimed could cut wages and benefits up to 32%.
Workers picketed or honored the strike in Sacramento, Los Angeles, Oakland and Seattle and in states such as Ohio, Tennessee, Illinois and Montana. Hostess said in a statement that the walk-offs could lead to layoffs for most of its 18,300-member workforce and a sale of its assets “to the highest bidders.”
“A widespread strike will cause Hostess Brands to liquidate if we are unable to produce or deliver products,” according to the statement. The Irving, Tex.-based company, which was founded in 1930, acknowledged that “the concessions are tough.”
Over the weekend, consumers such as Matthew McCarthy took to Twitter over the issue.
“heading to the supermarket to stock up on ding dongs,” he tweeted. “i suggest you do the same. #hostessstrike”
The union claims that the contract will cut wages by 8% immediately and that Hostess is imposing “draconian cuts” in health benefits and eliminating the eight-hour workday. Picketing workers also claim that Hostess stopped making contributions to worker pensions last year and that 92% of union members voted in September to reject the new contract.
The Ho Hos and Wonder Bread maker filed for Chapter 11 protection in January, less than five years after emerging from its last bout of bankruptcy.
Striking workers accuse the company of diverting funds intended for capital investment, product development, plant improvement and new equipment into executive bonuses and Wall Street investors instead.
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