Hostess Threatens to Liquidate Itself If Strike Doesn't End Today
Hostess, the maker of Twinkies, Ho Hos, Ding Dongs, and other forms of American health food, is currently the target of strike by its workers. If you're interested in the particulars of the issues at hand, the union's side can be found here, and the company's side can be found here. ("The walkouts began after bakery union employees rejected a unilaterally imposed contract that included wage and benefits cuts of 27 percent to 32 percent.") Regardless, as a fan of artificially flavored cakes, you may be interested to know that management has threatened to shut down the entire company if a deal is not reached today.
"We simply do not have the financial resources to survive an ongoing national strike," Chief Executive Gregory F. Rayburn said in a statement Wednesday. If "enough striking employees" don't head back to their jobs by Thursday at 5 p.m Eastern time, the company said it will on Friday seek bankruptcy-court permission to launch a liquidation of the entire business. The shutdown would result in the loss of nearly 18,000 jobs.
It seems rather unthinkable that that would actually mean the end your favorite cakes, since many of the Hostess brands have value and could probably attract buyers. But as far as Hostess itself, which has been bankrupt twice in the past decade... it's a pretty scary bargaining chip.
[Photo: AP]