Hostess going out of business - 13 WTHR Indianapolis

Hostess going out of business

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Hostess employees on strike Hostess employees on strike
INDIANAPOLIS -

Hostess Brands says it will stop operations and liquidate the entire company after striking workers failed to return to the job Thursday night.

"We simply do not have the financial resources to survive an ongoing national strike," said Hostess CEO Gregory Rayburn. The company has been in bankruptcy for the last two years.

Hostess' labor force walked off the job last week as the company sought to cut pay eight percent and benefits by up to 32 percent. The Irving, Texas company says the nationwide strike crippled its ability to make and deliver its products.

Workers on the picket lines see it differently.

"Greedy people don't make money," said Debra Davis, who has worked at the Indianapolis facility for 17 years.

The closings will result in Hostess' nearly 18,500 workers losing their jobs as the company shuts 33 bakeries and 565 distribution centers nationwide, including bakeries in Indianapolis and Columbus, Indiana. The company employed about 850 workers in Indiana.

"This is just a stand we made and we stuck together and we all went down with the ship together," Davis said.

But they took a lot of other people down with them.

"I love them. I love the Twinkies, the cupcakes. Like I say, I bought them for my grandkids. I pick them up everyday from school," said shopper Jeff Hardin.

There may be another issue at play. As Americans become more health-conscious, they will buy less items like Twinkies and Ho-Hos, which is why there is such a small display at some grocery stores.

But the company's Wonder Bread is a different story. It's a high-end product on a dead end road.

"These Hostess brands are the ones we've compared against the Kroger brands, so certainly losing a good product, but we have an alternative with the Kroger product," said Kroger spokesman John Elliott.

Hostess will move to sell its assets to the highest bidder. That could mean some of its most popular products could be scooped up at auction and attached to products from other companies.

"Our insurance went up, the eight percent cut in pay, but when they took our pension from us, a lot of people have been here for 25 years. At least this way if somebody wanted to come in and try it, they're not gonna have to buy all their debts and maybe somebody can get in there and buy it and actually run a bakery and not mess with the people's morale and their money and make it a bakery. It was a good bakery. It's a good product. But just bad leadership and that's it," said Davis.

Hostess says the current unprofitable cost structure was determined by union wages and pension costs. That translates into lost jobs, lost product and lost traditions.

You can trace the history of Hostess back to the late 1800s. The Twinkie was first made in 1933, and a package of two cakes cost just a nickel.

Hostess entered bankruptcy in 2004, emerging five years later. But this year, it filed bankruptcy again.

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