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Twinkies maker Hostess plans closure

Nov 17 2012, 13:01 IST
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SummaryHostess Brands Inc, the bankrupt maker of Twinkies snack cakes and Wonder Bread, is seeking a US court's permission to go out of business.

owners such as private equity firm Ripplewood Holdings and hedge funds Silver Point Capital and Monarch Alternative Capital.

Officials at the three firms declined to comment.

Our members decided... they were not going to agree to another round of outrageous wage and benefit cuts and give up their pension only to see yet another management team fail and Wall Street vulture capitalists and 'restructuring specialists' walk away with untold millions of dollars, said BCTGM International Union President Frank Hurt.

Picketing workers echoed the sentiment.

The people who are running this company are not interested in making bread, said Roger Harrison, 56, who bags buns at the Hostess plant in Lenexa, Kansas, and has been with the company for 35 years.

They are not in the baking industry; they are just interested in the money, Harrison said.

The company had started implementing an 8 percent pay cut, a 20 percent increase in healthcare costs, and changes to pension and workday provisions when workers went on strike on Nov. 9. Hostess had given employees a deadline to return to work on Thursday, but the union held firm, saying it had already given far more in concessions than workers could bear and that it would not bend further.

The union has been the death of this company, said a human resources manager who recently left Hostess.

LONG LABOR BATTLES

Hostess's battle with its workforce has brewed for years. Formerly known as Interstate Bakeries Corp (IBC), the company for decades was based in Kansas City, Missouri. It filed for bankruptcy in September 2004 and emerged in 2009 with a host of employee concessions from various unions.

A source with knowledge of the situation who spoke on condition of anonymity said the company was well positioned when it emerged from bankruptcy in 2009, but the recession, a spike in commodity prices and consolidation of major competitors reshaped the landscape and forced more restructuring.

We tried to get the senior creditors and the unions together and it dragged on and on and on and the company got weak, said the source. I'm still praying, literally, that something is worked out and they don't liquidate the business.

When Hostess filed for bankruptcy protection in January of this year the company said it must withdraw from multi-employer pension plans, address legacy health and welfare costs and secure new capital to modernize its operations.

The company has spent the last several

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