ICYMI: Hostess to liquidate after mediation with union fails
Because the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) was unwilling to make concessions during mediation early last week, Hostess, maker of the Twinkie and other bakery goods, sought and won approval from the bankruptcy judge overseeing its case to liquidate:
Hostess Brands Inc on Wednesday won permission from a U.S. bankruptcy judge to begin shutting down, and expressed optimism it will find new homes for many of its iconic brands, which include Twinkies, Drake’s cakes and Wonder Bread.
U.S. Bankruptcy Judge Robert Drain in White Plains, N.Y., authorized current management, led by restructuring specialist Gregory Rayburn, to immediately begin efforts to wind down the 82-year-old company, a process expected to take one year.
“It appears clear to me that the debtors have taken the right course in seeking to implement the wind-down plan as promptly as possible,” Drain said near the end of a four-hour hearing.
Hostess CEO Gregory Rayburn testified at a bankruptcy hearing Wednesday that he will have to terminate 15,000 employees immediately. Most of the remaining 3,200 workers are expected to be let go within four months.
The Teamsters Union had already ratified the agreement and were, in fact, urging BCTGM to do the same, going so far as to ask them to hold a secret ballot to decide whether or not to continue their strike. Teamsters even criticized BCTGM for “not substantively look[ing] for a solution or engag[ing] in the process.”
Products like the Twinkie and Ding Dong will likely survive, though under the ownership of a different company. That means that at least some of the jobs being eliminate will survive, though it wouldn’t be surprising to see them head to right-to-work states instead of states that are friendly to unions.