Hostess Brands Inc., the maker of Twinkies and Wonder bread, said it filed a motion with the U.S. Bankruptcy Court this morning seeking permission to close its business and sell its assets, including a 128-job bakery in North Jacksonville that it already lists as closed on its Hostessstrike.info website.
Hostess employs more than 18,000 workers nationwide, including 185 in Jacksonville employed at the bakery and eight area bakery outlets.
It employs 340 around the state, according to a Worker Adjustment and Retraining Notification filed in May about potential layoffs.
The maker of Ding Dongs, Ho Hos, Nature's Pride and other iconic brands said delivery of the products will continue and Hostess Brands retail stores will remain open for several days to sell the remaining inventory.
"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 site.
Hostess, based in Irving, Texas, lists all 36 plants as closed, including three that it announced Monday it was closing because of the work stoppage.
A Hostess spokesman said the Jacksonville plant makes Wonder bread, Nature's Pride and Merita products.
Members of the Bakery, Confectionary, Tobacco Workers & Grain Millers International Union Local 103 striking at the Jacksonville plant in Imeson International Industrial Park remained on-site early this morning.
They said they would stay until told by union leaders to leave. Members said they could not speak on the record but one indicated that other companies have been looking at the bakery and two others for a possible purchase.
An estimated 70-80 union workers are employed at the plant and more than half were striking, said one union member. One worker who wasn't striking rolled down her car window and yelled that she supported the members "all the way," but needed her job. Members responded, "we do too."
Security guards kept visitors and striking workers from entering the parking lot or building.
The union began striking a week ago, protesting wage and benefit concessions imposed by the court at the request of Hostess. Hostess filed for Chapter 11 reorganization in January in New York, the company's second filing in a decade.
On Wednesday, Hostess said it would be forced to liquidate if sufficient employees did not return to work to restore normal operations by 5 p.m. Thursday. It said it determined not enough workers returned to resume normal operations.
"We simply do not have the financial resources to survive an ongoing national strike," Hostess Brands Chairman and CEO Gregory Rayburn said Wednesday in a news release on hostessstrike.info.
"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," he said.
The bakers' union represents around 5,000 of the company's employees.
Hostess won wage and benefit concessions from the International Brotherhood of Teamsters, but the bakers rejected the deal and the company asked the court to impose it on the union.
Hostess said the bakers' union "rejected a last, best and final offer from Hostess Brands designed to lower costs so that the company could attract new financing and emerge from Chapter 11. Hostess Brands then received court authority on Oct. 3 to unilaterally impose changes to the BCTGM's collective bargaining agreements."
Hostess said it was unprofitable under its current cost structure, "much of which is determined by union wages and pension costs."
"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Rayburn said in a statement this morning.
"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," said the statement.
Hostess said that in addition to dozens of baking and distribution facilities around the country, it will sell its popular brands, including Hostess, Drakes and Dolly Madison. Bread brands to be sold include Wonder, Nature's Pride, Merita, Home Pride, Butternut and Beefsteak, among others.
The wind down means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States.
The 82-year-old company said its debtor-in-possession lenders have agreed to allow the company to continue to have access to the $75 million financing facility put in place at the start of the bankruptcy cases to fund the sale and wind down process, subject to U.S. Bankruptcy Court approval.
The company's motion asks the court for authority to continue to pay employees whose services are required during the wind-down period.
The company said employees whose jobs will be eliminated can find information at www.hostessbrands.info. The website also contains information for customers and vendors. Most employees who lose their jobs should be eligible for government-provided unemployment benefits, it said.
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