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Hostess, Twinkies In Trouble Again As Negotiations Break Down

Hostess, Twinkies In Trouble Again As Negotiations Break Down

Hostess and Twinkies appeared to be out the door when the company announced it was going out of business, but it appeared saved when potential buyers stepped forward.

Now the company is on the brink again as bankruptcy mediation broke down between Hostess and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union. As The Huffington Post reported, this has disrupted the company’s plans to proceed with liquidation.

After Hostess announced on Friday that it was going out of business, the union went to work with management to iron out their differences. Aside from the loss of the iconic Twinkie brand, about 18,500 jobs could be lost if the company goes out of business.

“Many people have worked incredibly long and hard to keep this from happening, but now Hostess Brands has no other alternative than to begin the process of winding down and preparing for the sale of our iconic brands,” CEO Gregory Rayburn said in a letter to employees posted on the company website Friday.

Reuters reported that bakery operations at Hostess stopped last week, but product deliveries of the already made products continued.

Hostess has blamed union wages and pension costs for sinking its profit margins, but union advocates have pointed to the pay of Hostess CEO, which has risen 300 percent.

Other experts have noted that the company operated a number of inefficient and out-of-date factories, which ate up costs. Experts contend that the Hostess and Twinkie brands will be worth more once they are separated from these factories and sold to non-union companies.

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