Hostess May File Bankruptcy if Bakers Strike Continues
Hostess Brands announced today its plans to file for bankruptcy and liquidate the entire company if its striking employees do not return to work by Thursday November 15th at 5 pm. Its employees affiliated with the Bakery Confectionery, Tobacco Workers and Grain Millers Union (BCTGM) have been on strike since November 9th, disrupting Hostess operations nationwide.
“We simply do not have the financial resources to survive an ongoing national strike,” said Gregory F. Rayburn, the Company’s Chairman and CEO. “Therefore, if sufficient employees do not return to work by 5 p.m., EST, on Thursday to restore normal operations, we will be forced to immediately move to liquidate the entire Company, which will result in the loss of nearly 18,000 jobs. It is now up to Hostess’ BCTGM represented employees and Frank Hurt, their international president, to decide if they want to call off the strike and save this Company, or cause massive financial harm to thousands of employees and their families.”
Striking at a total of 24 production facilities of Hostess Brands, the BCTGM has stated they took to the picket lines in response to “a horrendous contract that was rejected by 92 percent of BCTGM Hostess workers in September.”
“Our members are on strike because they have had enough. They are not willing to take draconian wage and benefit cuts on top of the significant concessions they made in 2004 and give up their pension so that the Wall Street vulture capitalists in control of this company can walk away with millions of dollars,” said BCTGM International Union President, Frank Hurt.
SEE RELATED STORIES FROM THE WDM CONTENT NETWORK:
Click here to see the latest issue of Business Review North America
Hostess claims it has done everything in its power to pursue a reorganization of its business which included an approximate 18 month negotiation with key constituents in an effort to reach a consensual agreement. Hostess explained that if workers do not return to work by their deadline, the company would file for bankruptcy Friday, November 16th, request a hearing on the motion for Monday, November 19th, and close operations if the motion is granted as early as Tuesday, November 20th. Hostess would then terminate all employees except for a few small, temporary crews that would clean, secure and prepare facilities and assets for sale.
