NEW YORK -- Twinkies may last forever, but the same can‚??t be said for the company that makes the cream-filled sponge cake. Hostess Brands Inc., the company that makes Twinkies and Wonder Bread, has asked a judge for permission to go out of business and lay off 18,500.
The company is blaming its decision to shut down on a labor strike by members of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, but Americans‚?? appetite for junk food has been waning in recent years. The company has filed for bankruptcy twice within a decade, the last time in January.
‚??We deeply regret the necessity of today‚??s decision, but we do not have the financial resources to weather an extended nationwide strike,‚?Ě Gregory F. Rayburn, Hostess‚?? chief executive, said in a statement.
The union said in a statement that Hostess made unreasonable demands, including wage and benefit cuts of around 30 percent for workers, while top executives of the company received large pay increases.
‚??The crisis facing Hostess Brands is the result of nearly a decade of financial and operational mismanagement that resulted in two bankruptcies, mountains of debt, declining sales and lost market share,‚?Ě said union President Frank Hurt. ‚??The Wall Street investors who took over the company after the last bankruptcy attempted to resolve the mess by attacking the company‚??s most valuable asset -- its workers.‚?Ě
Hostess, based in Irving, Texas, has 565 distribution centers around the country, as well as 33 bakeries and 570 bakery outlets.
It said it had filed a motion with U.S. Bankruptcy Judge Robert Drain in White Plains, N.Y., for permission to shut down and sell assets.
Rayburn said in an interview that there was no buyer waiting in the wings to rescue the company. But without giving details, he said that there has been interest in some of its 30 brands, which include Dolly Madison and Nature‚??s Pride snacks. Experts agreed that it was likely the biggest brands would survive.
Mexico-based Grupo Bimbo, which has a bakery in the Valmont Industrial Park in West Hazleton, has been mentioned as a potential buyer.