Twinkie Hoarding Has Begun

-Submitted by David Drumm (Nal), Guest Blogger

CEO Gregory Rayburn of Hostess Brands, maker of Twinkies, Ho Ho’s, and Sno Balls, has announced plans to liquidate the 83-year old company. The company is in its second bankruptcy in a decade. Hostess sold about $2.5 billion worth of snack products last year with Twinkies leading the pack. However, the company has nearly $1 billion in debt and has $2 billion in unfunded pension obligations.

About 18,000 jobs are at stake. The unionized employees are represented by the International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM). BCTGM in September rejected a last, best and final offer from Hostess and went out on strike.

While Hostess CEO Gregory Rayburn was planning to ask his employees for wage and benefit concessions, he was awarded a 300 percent raise (from approximately $750,000 to $2,550,000). Nine other top executives of the company received massive pay raises.

Over the eight years since the first bankruptcy, Hostess employees have watched as:

money from previous concessions that was supposed to go towards capital investment, product development, plant improvement and new equipment, was squandered in executive bonuses, payouts to Wall Street investors and payments to high-priced attorneys and consultants.

BCTGM stated that “Our members are on strike because they have had enough.” The union’s members voted 92% to reject the company’s “best and final offer.”

Hostess plans to sell its most popular brands like Twinkies, CupCakes, Ding Dongs, Ho Ho’s, Sno Balls, and Donettes. In the mean time, Hostess products are flying off store shelves.

Competitors like Bimbo Bakeries USA (pronounced “Beembo”), also employing union workers and the largest bakery corporation in the US, may be a likely purchaser of some of the Hostess brands.

H/T: LGM, Think Progress, Policy Mic, Sacremento Bee, WSJ, Courthouse News.