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Hostess expected to make liquidation decision Friday

Published: Friday, Nov. 16, 2012 10:13 a.m. CST

(MCT) — PEORIA, Ill. — After strikers failed to accept a 4 p.m. deadline to return to work Thursday, Hostess Brands Inc. is expected to announce plans that could involve liquidation on Friday, a move that could affect a national work force of 18,000 people.

That leaves facilities such as the plant at 1511 W. Lincoln Ave. and its 200 employees in limbo. About 100 of those employees are members of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union that have been on a national strike since Nov. 9, when Hostess imposed a contract that cut employee salaries by 8 percent.

"These guys gave concessions when the company came out of bankruptcy in 2004. Now (the company) comes back and wants even more drastic cuts from workers," said John Howard, a union official with the bakers' union.

Hostess, the maker of Twinkies, Ding Dongs and Wonder Bread, has struggled in recent years with two bankruptcy filings. The Irving, Texas-based company, noting it has spent nearly 18 months trying to get an agreement with union members, had said it would file a motion Friday in U.S. Bankruptcy Court to liquidate if enough striking workers didn't return to work by 4 p.m. Thursday.

Hostess spokesman Erik Halvorson that there probably wouldn't be an announcement by the company until Friday morning.

A Hostess official said a decision on whether to move to liquidate the company would not come until after it has had a chance to assess plant operations at the end of Thursday.

On its website, Hostess charged that the bakers' union appeared willing "to sacrifice Hostess Brands employees for the sake of preventing other bakery companies from asking for similar concessions."

Hostess also said that "the union's misinformation campaign included giving its members a false sense of hope that a buyer would purchase the company if it liquidated."

Bakers' union President Frank Hurt issued a release from union headquarters in Maryland charging Hostess with mismanagement.

"For the past eight years, management of the company has been in the hands of Wall Street investors, 'restructuring experts,' third-tier managers from other non-baking food companies and currently a 'liquidation specialist.' Six CEOs in eight years, none of whom had any bread and baking industry experience, was the prescription for failure," said Hurt in the statement.

On the picket line in Peoria, union steward Kravis Pfeiffer said employees were tired of making concessions. "Management keeps taking money and putting it in their pocket. I don't think it's fair to the workers," he said.

"The Butternut plant closing would be a huge loss for this city and this neighborhood," said Pfeiffer.

Pfeiffer's wife, Lisa, who has been on the picket line with her husband, credited area restaurants such as Taco John's and Subway for donating food to the strikers during the past week.

Hostess, founded in 1930, is fighting battles beyond labor costs, however. Competition is increasing in the snack space, and Americans are increasingly conscious about healthy eating. Hostess also makes Dolly Madison, Drake's and Nature's Pride snacks.

If the motion to liquidate is granted, Hostess could begin closing operations as early as Tuesday.

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