Hostess going out of business; over 250 in Memphis to lose jobs - Mid-South News, Weather, Traffic and Sports | FOX13

Hostess going out of business; over 250 in Memphis to lose jobs

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MEMPHIS, Tenn. (FOX13) -

Hostess, the maker of Twinkies and Wonder Bread, has filed a motion with the U.S. Bankruptcy Court seeking permission to  close its business and sell its assets.

The Irving, Texas, company said a nationwide strike crippled its ability to make and deliver its products. Its brands also include Ding Dongs, Ho-Ho's, and Dolly Madison.

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Earlier this week Hostess warned employees that it would unwind its business and sell assets if plant operations didn't return to normal levels by Thursday evening. The privately held company filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade.

"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 F. Rayburn said in a letter to employees posted on the company website.

Thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) went on strike last week.

Hostess has said that production at about a dozen of the company's 33 plants has been seriously affected by the strike. The company announced the closure of plants in Cincinnati, St. Louis, and Seattle earlier this week.

The Memphis Hostess plant employs over 250 people. Workers at the local plant have been participating in strike this week.

In September, 92 percent of BCTGM union members voted against the contract proposal offered by Hostess. Officials with the union say the contract proposal included an immediate eight percent cut in pay, and additional cuts that would add up to a 27 to 32 percent reduction in pay and benefits.

Union officials also say Hostess stopped making mandated contributions to the pension plan in July of 2011.

MORE: Hostess website announces closure

The company, founded in 1930, was fighting battles beyond labor costs. Competition is increasing in the snack space and Americans are increasingly conscious about healthy eating. Hostess also makes Dolly Madison, Drake's and Nature's Pride snacks.

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