Hoard Twinkies?! Hostess Threatens to Shut Down
Hostess Brands, the maker of Twinkies, Wonder Bread and other household-name products, said it would seek this week to liquidate the company unless enough workers stopped striking by the end of the workday on Thursday to allow the company to resume normal operations.
Hostess filed for bankruptcy in January and is threatening to liquidate because of labor unrest.
Members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike Nov. 9 in response to court-approved pay cuts.
Hostess Chief Executive regory Rayburn said the company did not have the financial wherewithal to weather an ongoing strike.
"Bakers Union has a 5 p.m. deadline to cross the picket line," he told CNBC. "Right now, 12 plants are not operating because they do not have the managerial capacity to run," he added.
The company, which has about 18,000 employees, filed for Chapter 11 bankruptcy in January.
Hostess said it would file a motion with U.S. Bankruptcy Court in White Plains, N.Y., Friday to close shop and sell its assets if enough employees do not return to work by 5 p.m. Eastern time on Thursday. If the motion is granted, Hostess would begin to close its operations as soon as Nov. 20.
The CEO said if the 5,600 employees do not return to their shifts by the 5 p.m. deadline, Hostess will not be able to operate at a capacity that's sustainable. "Some union members believe there is still a buyer for the company waiting in the wings, that is not the case," he said.
A union spokesman was not immediately available for comment.
CNBC.com contributed to this report.
