In the aftermath of a national union strike, Hostess Brands Inc. announced it will close its doors for good and liquidate the 82-year-old business.
The iconic maker of Twinkies and Wonder Bread has already suspended operations in 33 of its factories across the U.S. as it plans to liquidate its assets after failing to secure an agreement with unions regarding wage and benefit cuts.
The company had initially planned to reorganize its company under Chapter 11 bankruptcy law to avoid liquidation, but a nationally orchestrated strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union rendered it unable to continue producing and delivering products. However, union members said they would not budge on new discussions, noting that they had already made a number of reasonable concessions to keep the company operating.
Following an unsuccessful ultimatum to workers to end the strike, the company said it had no choice but to shut down.
"We do not have the financial resources to weather an extended nationwide strike," CEO Gregory Rayburn said in a statement. "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 decision has prompted Hostess to cancel all current and future orders, and reroute those products that are currently in transit back to the factories, according to Reuters. The company expects that the liquidation will take roughly one year to complete, during which time it will retain a small workforce of roughly 3,500 in the first few months. Despite the liquidation, the company will be allowed to retain the $75 million it received from debtor-in-possession lenders to help it wind down.
Analysts expect that the company will attempt to sell the rights to continue production of its more popular brands, so all lovers of Twinkies – and you know who you are – might be able to continue enjoying their passion.