Hostess received a green light from a Judge in New York last week to begin winding down production of all of it’s brands. Not all of Hostess employees will lose their jobs right away. Here’s is part of a press release put out by Hostess:
Hostess Brands said it intends to retain approximately 3,200 employees to assist with the initial phase of the wind down. Employee headcount is expected to decrease by 94% within the first 16 weeks of the wind down. The entire process is expected to be completed in one year.
The wind down was necessitated by an inflated cost structure that put the Company at a profound competitive disadvantage. The biggest component of the Company’s costs was its collective bargaining agreements that covered 15,000 of 18,500 employees.
Hostess Brands worked tirelessly to complete a reorganization of its business as a going concern, including spending the better part of 18 months negotiating with its key constituents to obtain a consensual agreement to lower costs to a sustainable level. The Company had obtained the support of its largest union, the International Brotherhood of Teamsters, and its lenders. However, the BCTGM leadership chose not to negotiate a new labor contract and instead, when presented with a final offer, launched a campaign to cripple the Company’s operations and force it to liquidate.
The wind down means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes, 570 bakery outlet stores and the loss of 18,500 jobs.
As noted in a video report over 600 jobs will be affected in North Carolina scattered across the state, inlcuding over 270 at the Merita Bakery in Rocky Mount.