After all the talk that Twinkies will be no more, reports are now coming in that Hostess Brands may avoid a total shutdown. According to an Associated Press report in the Wall Street Journal, Hostess Brands and its second largest union will go into mediation, as appointed by a U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y.
Writes the Associated Press:
The bankruptcy judge hearing the case says that the parties haven’t gone through the critical step of mediation and asked the lawyer for the bakery’s union to ask his client, who wasn’t present, if he would agree to participate.
News first came of Hostess Brands’ shutdown on Friday, November 16th, as the already-bankrupt Hostess Brands was crippled by a nationwide strike of the Bakery, Confectionery, Tobacco Workers and Grain Millers Union. Two-thirds of Hostess Brands’ factories and about 5,300 Hostess Brands’ employees were impacted by the strike. The company’s CEO gave Hostess employees until 5 p.m. on Thursday, November 15th to end the strike and return to work.
From a press release by Hostess Brands:
On Nov. 12, Hostess Brands permanently closed three plants as a result of the work stoppage. On Nov. 14, the Company announced it would be forced to liquidate if sufficient employees did not return to work to restore normal operations by 5 p.m., EST p.m., Nov. 15. The Company determined on the night of Nov. 15 that an insufficient number of employees had returned to work to enable the restoration of normal operations.
“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.”
Of those 18,500 workers, 300 are located here in the Bay State at 13 Hostess Brands’ facilities.
According to Bloomberg Businessweek, Hostess said shutting down its 33 bakeries and 565 distribution centers would cost an estimated $17.6 million over the next three months, and the company would have about $29 million worth of excess product ingredients.
As Americans learned of the news of Hostess’ shutdown, products started flying off store shelves and showing up on eBay and Craigslist for obscene prices, some even reaching the $10 million mark. Check out a slideshow of the “Twinkie Apocalypse” below.