Hostess to Close Operations after Union Strike Criples Production and Distribution

Hostess Brand Inc., announced it has filed a motion in U.S. Bankruptcy Court asking permission to close and sell assets - including its iconic brands and facilities. 

A press release from Hostess reads: The wind down means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States.

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” said Gregory F. Rayburn, chief executive officer. “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.”

In a letter to employees Hostess writes: As you know, for many months the Company has been working with our unions, lenders and other stakeholders to reach a consensual resolution to legacy costs and labor contracts. Despite everyone’s considerable efforts to move Hostess out of its restructuring, when we began implementing the Company’s last, best and final offer, the Bakers Union chose to stage a crippling strike. This affected Hostess' ability to continue to make products and service its customers' needs and pushed Hostess into a Wind Down scenario. As a result, we are forced to proceed with an orderly wind down and sale of our operations and assets. We deeply regret taking this action. But we simply cannot continue to operate without the ability to produce or deliver our products.

Read more details about the closure and Hostess' battle with its unions.