Hostess shipments ending in C-U

CHAMPAIGN — Stock up on Twinkies while you have the chance.

A spokeswoman with Niemann Foods, which owns the County Market stores in Champaign-Urbana, said the company received word Friday morning that that was the last day it would receive shipments from Hostess. The bakery company announced Friday it was shutting down operations and laying off employees in the wake of a bankruptcy filing and its failure to come to an agreement with striking workers.

An employee at the Wonder/Hostess bakery outlet at 805 Bloomington Road, C, said the store will likely close by sometime next week. It employs two full-time workers, said the woman, who declined to give her name. The outlet has operated out of that location for about the last four years and was previously located at 301 Bloomington Road, C. Before that, the shop was in Urbana.

Heidi Meyer, marketing manager with Niemann Foods, which owns County Market and Save- A-Lot stores, said Hostess provided about 35 percent of the bread and snack supplies for stores. On Friday, Niemann employees were contacting other bakeries and placing orders for additional baked goods so there would be no bare shelves during the holiday season.

"Our priority is to our customers and to make sure our shelves are stocked with products," Meyer said.

Hostess makes Wonder Bread, Butternut Bread products and snack cakes such as Twinkies, Ding Dongs, Zingers and more.

 

Hostess Brands Inc., whose roster of brands date as far back as 1888, filed a motion to liquidate Friday with U.S. Bankruptcy Court after striking workers across the country crippled its ability to maintain production.

Hostess CEO Greg Rayburn said in an interview that there was no buyer waiting in the wings to rescue the company. But without giving details, he said that there has been interest in some of its 30 brands, which include Dolly Madison and Nature's Pride snacks. Experts agreed that it was likely the biggest brands would survive.

Hostess, based in Irving, Texas, filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than three years. Unlike many of its competitors, Hostess had been saddled with high pension, wage and medical costs related to its unionized workforce. The company also faced intensifying competition from larger companies such as Mondelez International, the former snack unit of Kraft Foods that makes Oreos, Chips Ahoy and Nabisco.

The shuttering of Hostess means the loss of about 18,500 jobs. Hostess said employees at its 33 factories were sent home and operations suspended Friday. Its roughly 500 bakery outlet stores will stay open for several days to sell remaining products.

The move to liquidate comes after a long battle with its unions. Thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike last week after rejecting a contract offer that slashed wages and benefits. The bakers union represents about 30 percent of the company's workforce.

A representative for the bakers union did not immediately return a call seeking comment.

Although many workers decided to cross picket lines this week, Hostess said it wasn't enough to keep operations at normal levels; three plants were closed earlier this week. Rayburn said Hostess was already operating on thin margins and that the strike was a final blow.

"The strike impacted us in terms of cash flow. The plants were operating well below 50 percent capacity and customers were not getting products," Rayburn said.

The company had reached a contract agreement with its largest union, the International Brotherhood of Teamsters, which this week urged the bakery union to hold a secret ballot on whether to continue striking.

Ken Hall, general secretary-treasurer for the Teamsters, said his union members decided to make concessions after hiring consultants who found the company's financials were in a dire situation.

"We believed there was a pathway for this company to return to profitability," Hall said, noting that the liquidation could've been prevented if the bakery union had agreed some concessions as well.

Although Hall agreed that it was unlikely anyone would buy the entire company, he said "people are going to look for some fire sale prices" for some of the brands. For now, he expects Hostess products will be on shelves for another week or so.

"Frankly it's tragic, particularly at this this time of year with the holidays around the corner," Hall said, noting that his 6,700 members at Hostess were now out of a job.

Kenneth McGregor, a shipper for Hostess in East Windsor, Conn., arrived at the plant Friday morning and said he was told he was laid off immediately.

He blamed the bakery workers union for rejecting a proposed contract.

"They screwed us big time," he said.

In a statement on the company website, CEO Rayburn said there would be "severe limits" on the assistance the company could offer workers because of the bankruptcy. The liquidation hearing will go before a bankruptcy judge Monday afternoon; Rayburn said he's confident the judge will approve the motion.

"There's no other alternative," he said.

The company's demise stoked nostalgia among customers as well.

Adil Ahmed, whose family still eats Hostess treats during the holidays, said he rushed to the supermarket Friday morning after hearing the news. Growing up in New Jersey, he said his Southeast Asian family bought Wonder Bread to dip in curries and loaded up on sweets from a nearby warehouse for the holidays.

"I have nephews and nieces — we have to pass on the tradition to the next generation," said Ahmed, a 25-year-old union worker in Baltimore. He bought four boxes of Twinkies and other snacks for a family get together this weekend.

Samantha Caldwell of Chicago also took a quick detour on her way to work Friday morning after she heard the news on NPR. The 41-year-old attorney stopped at a CVS store.

She got a package of two Twinkies to have with her morning tea, and another for her 4-year-old son, who has never had one.

"This way he can say, 'I had one of those,'" she said.

___

AP Reporters Stephen Singer and Ashley Heher contributed to this report.

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rsp wrote on November 16, 2012 at 3:11 pm

Why are these things proceeded by the top execs getting that 80% increase in pay? That's the first thing you do after coming out of a bankruptcy is divide up the cash? No thought of the future? 

Bulldogmojo wrote on November 16, 2012 at 4:11 pm

From the Forbes.com article on Hostess...

"Hostess Brands management gave themselves several raises, all the while complaining that the workers who actually produced the products that made the firm what money it did earn were grossly overpaid relative to the company’s increasingly dismal financial position"

The Hostess company on twitter blamed the union for their demise without mentionng that the unions were also carrying some of the actual hedgefund arranged debt from the previous bankruptcy so the employees got fleeced both ways.

I think Hostess management would fit right in here at the U of I in leadership positions.

jlc wrote on November 16, 2012 at 4:11 pm

Interesting how this article blames everything on the unions (except a wee bit about competition). Other articles I have read today on this topic have mentioned the 80% bonus to executives referred to in the first comment, and Hostess's failure to adjust to consumer demand for healthier products in our increasingly overweight world. And yet here, the only information that was plucked from the standard AP article had to do with the big bad unions. Why is that?

Sid Saltfork wrote on November 16, 2012 at 4:11 pm

Maybe; Bain will pick up the company cheap, and turn it around.  Mitt needs a job.  He could show his successful business background by gobbling up twinkies.  Mitt probably has had a twinkie before.  He could give them out as "gifts" for election in 2016.  The right wing would love twinkies.

RN4Veterans wrote on November 17, 2012 at 7:11 am

Well, obviously Sid, most of the left like the 'freebies', so I guess they will like those gifts, as they sure do take.  At least Mitt would be buying the gifts if he was giving them out in elections. There's the difference. Btw. Mitt did have a job, unlike the idiot currently in office. And yes, I love twinkies. Added benefit? I love seeing people able to work, esp. before the upcoming Christmas season.

Way to go turning this around into a political statement.

rsp wrote on November 17, 2012 at 7:11 am

Your comment is much more political and derogatory than Sid's. 

Mark Taylor wrote on November 17, 2012 at 11:11 am

That's right!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!111!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

These dang liberal DhimincRATS leftists fascistuisitcal communisitcal socialialistic Maobama students, women, minorities, gays, and govermint union thugs are always politicizing every issue that ever comes down the pike.

Those executives DESERVED thoese HUGE RAISES they took. They're NOT takers though. They're makers. So, when they take a huge raise before bankrupting the company and killing twinkines, their actually giving to all of the rest of us in that they're selflessly providing us with a true example of GOING GALT in the finest Paul Ryan endorsed Ayn Randian sense of saying I've got my huge undeserved raise after driving the company into the ground. The people who actually make, deliver, and sell the product and everyone else can go Eastwood themselves.

Sid Saltfork wrote on November 17, 2012 at 11:11 am

Well, stock up on your twinkies.  They have a shelf life of twenty years.  Just be thankful that it was Hostess instead of Quilted Northern.  America is becoming a minimum wage, part time employer thanks to right wing robots buying into the corporate propaganda.  

rsp wrote on November 17, 2012 at 7:11 am

It's already owned by a hedge fund and can't pay it's interest payment. Sound familiar? In 2007 they had a chance to sell to the largest Mexican bakery but refused. 

45solte wrote on November 17, 2012 at 8:11 am

Sustainability issues with unions.  The union had a choice to take less or end up with nothing.  Union members (18, 500 of them) sit with nothing today.  Would less pay for the execs have been able to cover the pension and benefits issues the union wasn't budging on?  With Obamacare looming, sustainability issues will become intimately known by all. 

Sid Saltfork wrote on November 17, 2012 at 9:11 am

Read more on the story.  The executives gave themselves a whopping raise.  The offer to the employees was working for much less pay, and paying quite a bit more for healthcare.  It was not all worker greed.  It was the 1% attitude of all for me, and less for you.  There has to be give, and take on both sides.  It is called compromise.  Obamacare would not exist if there was a more equitable relationship between the corporate class, and the lower class.  The middle class is almost non-existent now due to the loss of a balanced economy.  When people feel that they have nothing left to lose, they fight back.  It is time for compromise, and restoring the balance.

buzorro wrote on November 17, 2012 at 3:11 pm

'There has to be give, and take on both sides.' - SS

 

Obviously you're wrong.  Those with the the power to 'shut the gates' and still live comfortably don't 'have' to compromise with anyone.  The Hostess incident proves that. 

 

'When people feel that they have nothing left to lose, they fight back.  It is time for compromise, and restoring the balance.'- SS

 

You preachin' revolution, bro'?  I'll be behind you....way behind you.

Sid Saltfork wrote on November 17, 2012 at 10:11 pm

No, I am not "preachin' revolution".  I am saying what is enivitable if balance is not restored.  I do not want to see it happen.  

You have been behind me, and most of the citizens for a long time.  I would urge you to catch up; but I fear that it is too late for you.  "Those with the the power to 'shut the gates' and still live comfortably" have bought your soul.

rsp wrote on November 17, 2012 at 2:11 pm

If I read it correctly those unions have moved to half what they were making 7-8 years ago in the last bankruptcy. Even the judge was offended by the raises. 

You bring up Obamacare. Jimmy John doesn't want to add 50 cents to a sandwich to give his workers healthcare. Papa John's doesn't want to add 50 cents to a pizza to give their workers healthcare. Their customers are willing to pay it. You may notice the price is the same for both places. Both places say they can't do it because of competition. Both places owned by republicans. Jimmy John's has a history of firing those who call in sick. It's better to work sick. 

serf wrote on November 17, 2012 at 5:11 pm

RSP,

I agree with you but you are wrong on one key fact.

A Papa John's pizza wouldn't cost 50 cents more in order to provide it's employees with healthcare; it would cost a whopping 14 cents more (and that's according to their own calculations).  An outside source did the math and figured it would cost less than a nickel per pizza!

Here's a little class warfare for ya:

We're guessing Obamacare won't impact life at Schnatter's lavish home, a 40,000 square-foot mansion in a tony suburb of Louisville, Kentucky, that features several swimming pools, a private golf course and a 22-car garage among other amenities, according to CelebrityNetworth.com.

http://www.huffingtonpost.com/2012/11/13/papa-johns-obamacare_n_2123207....

 

 

 

Sid Saltfork wrote on November 17, 2012 at 10:11 pm

Thank you once again, serf. 

rsp wrote on November 18, 2012 at 4:11 pm

I saw a story about that last night. They had a pity/pizza party for Papa John's. On friday they wanted folks to buy two pizzas to protest Obamacare and give one to a homeless person or unemployed family. They were hoping to make millions off of it. I don't think it paid for the ads they took out. The news story I saw was about how few pizzas they sold. These guys forget who their customers are. 

RN4Veterans wrote on November 19, 2012 at 6:11 am

Ahhhhhhhhhhh.....Celebrity Networth...and Huffington Post...so news worthy and reliable.  They are both nothing more than gossip pages and you are touting them as factual news sources?  Go figure  LOL

serf wrote on November 19, 2012 at 8:11 am

http://lmgtfy.com/?q=papa+johns+obamacare

 

It's really quite simple enough to google it yourself.  It would require a bit of effort on your part and it would force you out of your bubble, but you might learn something.

Mark Taylor wrote on November 19, 2012 at 9:11 am

Oooooohhhhh -- you bubble popping reality loving science believing socialistics make me SOOOOOOO ANGRY!!!!!!!!!!11!!!!! You, with your 'facts,' and 'science,' and 'reality,' are clearly unAmerican communo-fascuistical degenerates who HATE FREEDOM AND LIBERTY!!

But it does make it easy for me and my fellow REAL AMERICANS and TRUE PATRIOTS like RN4Veterans to refute your points. You see, we don't need to engage in your liberally biased fact based argumentation -- that game is already biased in your favor.

No. Instead of trying to refute your facts, evidence, and reality, we merely have to note that your source is not a Limbaugh approved outlet, like eg, Todd Akin or Richard Mouououourdouck when it comes to the unfathomable mysteries surrounding the lady part questions. Nope. You quoted HuffPo. Doesn't matter what they said or what evidence they provide to back up their claims.

Nope. REAL AMERICANS and TRUE CONSERVATIVES only believe right wing Limbaugh approved facts. That, for instance, is why Marco Rubio just declined to say how old the earth is. [Just to be clear, I provided a link for entertainment purposes only; I don't endorse the practice of backing up assertions by providing evidence.]

I KNOW WHAT I KNOW WHAT I KNOW!!!!!!!!!1!

Your 'facts' and 'reality' are like nothing to us, right RN4Veterans? WE'RE IMPERVIOUS. And guess what? THE REST OF YOU ALL HAVE TO (STILL) DEAL WITH THAT LITTLE GEM OF REALITY!!!1!

rsp wrote on November 19, 2012 at 8:11 am

Do you consider Forbes as a source? Are they "reliable"? 

Cstraight wrote on November 20, 2012 at 4:11 pm

That's a shaaame!

Bulldogmojo wrote on November 17, 2012 at 10:11 pm

If you can't make a profit in a company that sells sugar and carbs in America you are incompetent management.