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Hostess Going Out of Business; Strike Cited

At the Hostess Cakes-Wonder Bread Wholesale Outlet in Albuquerque, Friday, November 16, 2012
At the Hostess Cakes-Wonder Bread Wholesale Outlet in Albuquerque, Friday, November 16, 2012
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Hostess Brands Inc. says it’s going out of business – and eliminating 18,500 jobs – after striking workers across the country crippled its ability to make its Twinkies, Ding Dongs and other snacks.

The move will also result in the closure of a contract Albuquerque distributing company, putting 27 local drivers, merchandisers and other employees out of work.

“We’re pretty much forced into a bankruptcy or whatever you want to call it ourselves,” said Michael Scott, whose family runs the Albuquerque distributorship and local Hostess outlet store.

Hostess had warned employees that it would file a motion with U.S. Bankruptcy Court on Friday seeking permission to shutter its operations if plants hadn’t resumed normal operations by a Thursday evening deadline. The deadline passed without a deal.

“I don’t know if they thought that was a bluff,” CEO Gregory Rayburn said Friday on CNBC. He said the financial impact of the strike makes it “too late” to save the company even if workers have a change of heart.

Rayburn said he’s hopeful that the company will find buyers for its roster of about 30 brands, which include Ho Hos, Dolly Madison, Drake’s and Nature’s Pride snacks.

There was a rush at the Scotts’ Albuquerque outlet store on Friday as customers stocked up on snacks – mainly the Twinkies, Scott said.

“They’re so iconic,” he said.

The Albuquerque outlet will stay open until everything is gone, which Scott estimated would be through at least next Friday.

Operations at the company’s 33 factories were suspended Friday. The company filed for Chapter 11 protection in January.

Union workers went on strike last week after rejecting a contract offer that slashed wages and benefits in September.

Rayburn said the union told workers there was a buyer in the wings, but there was not.
— This article appeared on page B1 of the Albuquerque Journal

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