Sour ending for Hostess: About 400 Columbus employees out of work after Twinkies parent company shuts down

tadams@ledger-enquirer.comNovember 16, 2012 

The Dolly Madison plant in Columbus, caught in a national struggle between Hostess Brands' corporate executives and striking union workers, closed suddenly Friday morning.

About 400 workers began picking up what is presumedly their final paychecks as Hostess shut down 33 snack-food factories and 565 distribution centers nationwide and began what it is calling a "liquidation" of the company. The move followed lengthy, acrimonious negotiations between the company and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM).

"I just hope I can find me another job," said one 30-year employee, who was visibly upset but declined to give her name. "I've worked there too long for them to take everything like that."

Irving, Texas-based Hostess Brands said Friday it had filed a motion with the U.S. Bankruptcy Court overseeing the company's legal wrangling, asking for permission to shutter its operations and sell off assets. The beleaguered firm had been demanding that its workforce of 18,500 take an 8 percent pay cut, with pension plans also being eliminated.

"We're hoping to get back to work soon," said Zach Townsend, a business agent with the union's Local 42 office in Atlanta. "It's not a matter of us playing games. We just want to do what's right for our employees."

Townsend was among a handful of local Hostess workers gathered at a vacant flea market off Victory Drive Friday for what one employee termed a meeting and another called a chance to say "goodbye" to each other.

"I need my job," said one female employee, who had been working at the Hostess factory for six years. Her husband also worked there. She declined to give her name. "It seems like we were always giving something to them (the company), but we never got anything back."

Hostess filed for Chapter 11 bankruptcy reorganization with the U.S. Bankruptcy Court for the Southern District of New York in January of this year, saying the move was necessary to get its costs under control. It specifically mentioned "legacy pension and medical benefit obligations and restrictive work rules," saying those issues and a more competitive snack-food industry have put it under extreme financial pressure. That bankruptcy filing followed a previous one in 2004, with the company exiting that one in February 2009.

The Columbus plant at 1969 Victory Drive opened in 1971 and employed as many as 1,200 people about a decade ago. But it has fewer than 400 on the payroll now, Townsend said. The local bakery is well-known for the sweet aromatic smell it emits to passers-by while making Twinkies, Zingers, Ding Dongs, fruit pies, doughnuts and other cake products.

The Columbus plant -- Hostess' only one in Georgia -- has survived various rounds of bakery closures leading up to and through the first bankruptcy reorganization that began in September 2004. The company also has periodically invested in production, packaging and handling equipment, while the staffing level has fallen steadily to its current level.

Hostess on Friday said while production has been "suspended" at all of its plants, delivery of products already produced will continue on some of its 5,500 delivery routes. It also will keep its 570 bakery retail stores open for a few days to sell any products remaining in inventory.

Hostess Chief Executive Officer Gregory Rayburn, in a statement, said the company plans to sell its brands, which aside from the snack cakes, includes breads such as Wonder, Nature's Pride, Merita, Home Pride and Butternut.

"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Rayburn said. "Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders."

The company said its board of directors approved the decision to shut down the Hostess operation after the union rejected its "last, best and final offer" in September. Three plants in Cincinnati, Seattle and St. Louis were closed earlier this week because of striking workers. The company on Wednesday gave the union and its remaining employees a Friday ultimatum to halt all strikes and return to work or the entire company would be liquidated.

On Thursday, Frank Hurt, BCTGM International Union president, responded with his own statement, saying, "The crisis facing Hostess Brands is the result of nearly a decade of financial and operational mismanagement that resulted in two bankruptcies, mountains of debt, declining sales and lost market share."

Hurt also attacked Rayburn, calling his statements in recent months "insulting and disingenuous" and insisting workers were not responsible for the company's failure.

"I am sure that our members would be agreeable to return to work as soon as the company rescinds the implementation of the horrendous wage and benefit reductions, including pension, and the restoration of the cuts that have already taken place," Hurt said.

The Columbus plant had been operating normally on Thursday, workers said, with no protesters near the property. One employee said she was four hours into her production shift Friday when management informed everyone of the shutdown and handed them what looks to be their final paycheck. Security personnel and Columbus police officers were in the parking area to keep the peace.

The once sweet-smelling plant had been idled, a "Now Hiring" banner still draped near the top of the bakery's front facade.

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