It’s sad when a well-known food company goes out of business.
It’s even sadder when said company is known for children’s cakes and snacks.
Hostess, which owns Wonder Bread and makes Twinkies, Ding Dongs, Ho Hos and other caky, creamy junk food, went to bankruptcy court Friday morning to ask to end business due to millions of dollars of debt and unhappy workers.
And if you think the workers are unhappy now, it’s only going to get worse: The closing of Hostess will result in the loss of over 18,000 jobs, including nearly 450 in Northern California.
Hostess CEO Gregory Rayburn said in a statement:
“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike. Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”
Let them eat cake? More like let them eat liquidated batter.
The want to end business comes at the end of a week when members of the Bakers Union went on strike and forced the closure of three bakeries.
Issues with the union workers isn’t new to Hostess–there has been over a decade of arguing over pay and pension cuts between Hostess and its workers–and although both sides were close to reaching a mutual agreement back in August of this year, matters took a turn for the worse and have now left company with a bit of a toothache.
Hostess itself has had its fair share of monetary problems for several years now. Per a Gothamist article from last December, the company was having extreme difficulty paying off $700 million in loans.
I thought my student loans were bad. Yeesh.
According to the union, the downfall of Hostess 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. “
Note: That first bankruptcy filing led to the closure of the sweet-smelling Mission District Hostess factory in 2005.
And while it may be true that mismanagement is to blame for Hostess’ woes, it isn’t going to change the fact that a lot of people are about to be unemployed.
If the U.S. Bankruptcy Court accepts the request, Hostess could begin liquidation as early as the last week in November. Just in time for the holidays.