Twinkie-maker Hostess Brands to liquidate

Hostess Brands, which makes Twinkies, has decided to close the company after failing to get wage cuts from striking workers.

Hostess has been forced to liquidate after striking members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union refused to return to work after a set deadline on the 14 November.

Members of the union originally went on strike to protest to eight per cent pay cuts and other health care and pension concessions, and decided to hold firm on their position when presented with the deadline. Union officials blamed the company’s financial problems on mismanagement.

The company, most famous for its baked goods and cream-filled sponge cakes Twinkies, claimed that it had incurred a loss of between $7.5m (£4.73m) and $9.5m from 9 November to 19 November in lost sales and increased costs due to the strikes.

Chief executive Gregory F. Rayburn said today that he “deeply regrets the necessity of today’s decision, but [the company] did not have the financial resources to weather an extended nationwide strike”.

Rayburn says that the company will now focus on removing most of its 18,500 jobs and selling its assets to the highest bidders.

The wind-down means Hostess will move forward to close 33 bakeries, 565 distribution centres, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the US.

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