Twinkie maker Hostess reaches the end of the line

Twinkies may not last forever after all.
Associated Press
Nov 16, 2012


Hostess Brands Inc., the maker of the spongy snack with a mysterious cream filling, said Friday it would shutter after years of struggling with management turmoil, rising labor costs and the ever-changing tastes of Americans even as its pantry of sugary cakes seemed suspended in time.

Some of Hostess beloved brands such as Ding Dongs and Ho Ho's likely will be snapped up by buyers and find a second life, but for now the company says its snack cakes should be on shelves for another week or so. The news stoked an outpouring of nostalgia around kitchen tables, water coolers and online as people relived childhood memories of their favorite Hostess goodies.

Customer streamed into the Wonder Hostess Bakery Outlet in a strip mall in Indianapolis Friday afternoon after they heard about the company's demise. Charles Selke, 42, pulled a pack of Zingers raspberry-flavored dessert cakes out of a plastic bag stuffed with treats as he left the store.

"How do these just disappear from your life?" he asked. "That's just not right, man. I'm loyal. I love these things, and I'm diabetic."

After hearing the news on the radio Friday morning, Samantha Caldwell of Chicago took a detour on her way to work to stop at a CVS store for a package of Twinkies to have with her morning tea and got one for her 4-year-old son as well.

"This way he can say, 'I had one of those,'" Caldwell, 41, said.

It's a sober end for a storied name. Hostess, whose roster of brands dates as far back as 1888, hadn't invested heavily in marketing or innovation in recent years as it struggled with debt and management changes.

As larger competitors inundated supermarket shelves with an array of new snacks and variations on popular brands, Hostess cakes seemed caught in a bygone time. The company took small stabs at keeping up with Americans' movement toward healthier foods, such as the introduction of its 100-calorie packs of cupcakes.

But the efforts did little to change its image as a purveyor of empty calories with a seemingly unlimited shelf life: Twinkies, for instance, have 150 calories and 4.5 grams of fat. A Ding Dong chocolate cake with filling has 368 calories and 19.4 grams of fat.

CEO Gregory Rayburn, who was hired as a restructuring expert, said Friday that sales volume was flat to slightly down in recent years. He said the company booked about $2.5 billion in revenue a year, with Twinkies alone generating $68 million so far this year.

Hostess' problems ran far deeper than changing tastes, however. In January, the company filed for Chapter 11 bankruptcy protection for the second time in less than a decade. Its predecessor company, Interstate Bakeries, filed for bankruptcy protection in 2004 and changed its name to Hostess after emerging in 2009.

Hostess, based in Irving, Texas, said it was saddled with costs related to its unionized workforce. The company had been contributing $100 million a year in pension costs for workers; the new contract offer would've slashed that to $25 million a year, in addition to wage cuts and a 17 percent reduction in health benefits.

Management missteps were another problem. Hostess came under fire this spring after it was revealed that nearly a dozen executives received pay hikes of up to 80 percent last year even as the company was struggling. Although some of those executives later agree to reduced salaries, others — including former CEO Brian Driscoll — had left the company by the time the pay hikes came to light.

Then, last week, thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike after rejecting the company's latest contract offer. The bakers union represents about 30 percent of the company's workforce.

By that time, the company had reached a contract agreement with its largest union, the International Brotherhood of Teamsters, which this week urged the bakery union to hold a secret ballot on whether to continue striking. Although many bakery workers decided to cross picket lines this week, Hostess said it wasn't enough to keep operations at normal levels.

The company filed a motion to liquidate Friday with U.S. Bankruptcy Court. The shuttering means the loss of about 18,500 jobs. Hostess said employees at its 33 factories were sent home and operations suspended. Its roughly 500 bakery outlet stores will stay open for several days to sell remaining products.

In a statement, the bakery union said Hostess failed because the six management teams over the past eight years weren't able to make it profitable — not because workers didn't make concessions.

"Despite a commitment from the company after the first bankruptcy that the resources derived from the workers' concessions would be plowed back into the company, this never materialized," the union said.

Ken Hall, general secretary-treasurer for the Teamsters, said his union members decided to make concessions after hiring consultants who found the company's financials were in a dire situation. But he said that he believed the company could've survived.

"Frankly it's tragic, particularly at this this time of year with the holidays around the corner," Hall said, noting that his 6,700 members at Hostess were now out of a job.

Kenneth McGregor, a shipper for Hostess in East Windsor, Conn., arrived at the plant Friday morning and said he was told he was laid off immediately.

In a statement on the company website, CEO Rayburn said there would be "severe limits" on the assistance the company could offer workers because of the bankruptcy. The liquidation hearing will go before a bankruptcy judge Monday afternoon; Rayburn said he's confident the judge will approve the motion.

"The strike impacted us in terms of cash flow. The plants were operating well below 50 percent capacity and customers were not getting products," he said. "There's no other alternative."



The Big Dog's back

Another failure of a rich CEO.


Make them yourself...its that E-Z.


A company has to file for bankruptcy because its creditors cannot be paid. I wonder who Hostess creditors are?
"Ironically, the largest amount of that debt is owed to the unions themselves. When Hostess filed with the bankruptcy court, the company disclosed that its biggest unsecured creditor is the Bakery & Confectionary Union & Industry International Pension Fund, which it owes approximately $944.2 million"
Who made who go under again?


Yeah, it's the union. They only managed a meager 2.5 billion. Greed did them in. They'll sell off the rights to Twinkies and cupcakes and the higher-ups can buy yachts for their great-grandkids. THAT'S the American way.


Psh, they are Hostess Cakes. If you really want something good, go out east and get Tastycakes. They are so much better.


Tastycakes are AWESOME!! Love them.


WoW, that sucks....guess they won't be able to have their Hostess cake and eat it too. This is a loose/loose situation. 18,000 people out of work.

The Big Dog's back

This is a Bain capital (romney) type disaster. Leverage buyout.

Darwin's choice

Really? The Union was asked for an 8% paycut and refused. More voters for your messiah!

Taxed Enough Already

Yes Darwin, I bet that 8% cut is looking a whole lot better than 100% cut in pay. Thank you unions we know you are looking out for OUR best interests... YEAH RIGHT!


I wondered the same thing, a pay cut or NO job? They interviewed a union rep in Rossford Ohio at the Hostess factory and he said the bankruptcy was the BEST news he had heard. He was sure that another bakery will buy Hostess and they will all get to go back to work!

bored reader

Yeah maybe they will all get back to work with a new owner and no union. Best possible outcome. And take a 16% pay cut. Justice served!

Erie County Resident

Bain Capitol? Really 'lil puppy? That all you have?
Grow up and read the article. Nowhere in there is Bain or any other business mentioned other than Hostess.
Management could have done a whole lot better by not making the stupid moves they made and the union hacks could have done better by not striking in this crash & burn economy. It was a joint effort ... PERIOD!!!

The Big Dog's back

ecr, do you know what a leverage buyout is? I'm not going to do the research for you, but I'll give you a hint. Type in Hostess brands.


greedy ceo's and the union a sure recipe for failure.


Six management teams over 8 years....I would suspect someone didn't want them to succeed. Selling the same unhealthy crap they have been making for at least 50 years without changing it....not a recipe for success. 80% raises for management when there was no dough...guaranteed to fail.

To blame this on the unions....witless.


twas both in my humble opinion


This is the exact same strategy that Delphi used over 6 years ago. Run the company into the ground by failing management teams then run to New York to file bankruptcy. Steve Miller tactic all over again.


The reason it is a creditor is because the owners quit funding pensions that they had agreed to fund in contracts. The workers had already agreed two previous times to lower wages, fewer benefits and paying more for insurance. And now they have no pension since the company refused to fund it. According to CBS news, the hedge fund that has been running Hostess plans to sell the trademarked names and recipes for huge profits for themselves.


Agreed! This happens more than people realize.


"Romney type desaster"? Why not blame it on Bush? Big Dog, you have a one track mind lubricated by the cool aid you blame others of drinking.

Darwin's choice


Second Opinion

BD is mindless.


Very sad.


Won't mourn the loss of Twinkies. King Dons...yes.


I find it ironic that two states legalize marijuana and no twinkies !!!
Don't feel sorry for Brutus, even AFL-CIO president Richard Trumka blames Romney for this LOL. This is hilarious!!!!!


The radical right wingers won't be satisfied until we're all working part time jobs with no benefits and getting paid 25 cents an hour just like the Chinese. To blame the collapse of Hostess on greedy unions is totally ridiculous. This company has been mismanaged worse than the Cleveland Browns.


LOL! Blaming a company in bankruptcy for not giving in to the same wages that send then into bankruptcy for the doors closing when the workers walk out. Which planet are you fruits from?


Lets give management who isn't doing their job an 80% raise and tell the workers they have to take a big pay cut, yep, the republican way to do things !!!


Lets think about this for a minute here. The CEO's and all the upper management are still rich, The employees do not have jobs. I wonder if its better to not have a job and actually be so misguided to strike in the middle of a bankruptcy or Still have a job making 18 bucks a hour with any pension? This is why the US is going to go under, Even though the left is sitting under a bridge starving they seem to think they won. In todays market of 14.7% unemployment and half the US on gov support any job is better than none, I could care less if the owner of my company made a million dollars a day as long as i have enough to pay for me and mine.


The US is going under because people like you think the rich should get richer while the rest of us get poorer. You are all for management getting raises by lowering current workers wages ! What a dumb belief !!!


I am for people having jobs, I am also into making sound decisions and not biting the hand that feeds me. Did you by chance work at union chain?
"the company disclosed that its biggest unsecured creditor is the Bakery & Confectionary Union & Industry International Pension Fund, which it owes approximately $944.2 million" So the union was owed 944.2 million by Hostess but wanted more from a company going through bankruptcy? Not very bright if you ask well...anyone.
"Lets take a company on the edge and give them a shove by going on strike, Their lost revenues are sure to make them give in!"


Hey, Rmoney got rich pushing companys over the edge and ruining workers lives !! But what would you know about common people !!


When are you people going to give Bush and Romney a break. Do you still blame your parents for everything that has ever gone wrong in your life. Obama probably did just as much to get ahead as B & R. It's just that he keeps it hidden. The election is over. You won. Now, can we get on with remarks about the story?

Second Opinion

hey rottenhog, all you had to do is study harder in school and you wouldn't be whining now.

Taxed Enough Already

yes it's call capitalism. If you want to be a "rich" person, go out and take the same risks they did. That beats socialism any day of the week. In Socialism you eventually run out of the "other guy's" money. Who is going to keep beating their brains out and working like a mule so that some "sit on their behind kind" gets the same money and benefits they have worked so hard for?


randy - as i have said before you will NEVER hurt the rich, right, wrong or indifferent. prezo needs to come up with another plan such as HUGE incentives to hire.

BW1's picture

They had a product that was selling well. They just couldn't afford to pay what the union demanded.

A union is a pact of all the workers in a given industry not to compete. When companies agree not to compete, it's an antitrust violation. Under such circumstances, it's not worth it for investors to go into business and create jobs. So, in this case, the investors went John Galt. Expect to see more of this in the coming years.


Apperently there sales were way down but they could still give management 80% wage increases on the backs of workers !!

Second Opinion

Why do you refuse to tell the ENTIRE story rottenhog?

They also voted to take $1 a year until they pulled out of bankruptcy,




@ jas:

Reads like you know how to operate a "profitable" biz.

Get some capital, hire some employees, pay 'em a "living wage" with great bennies and show all those evil right wingers how it's done.

What are you manufacturing?


Sounds to me that Hostess (being in bankruptcy and all) was giving the employees one last chance to make a deal that would allow them to keep their jobs and the plants open. Workers said no and they closed up. End of story on my fruit filled pies., damn I like the GMO apple filled pies. My lips be smacken right now. Think I'll go over to eBAY and bid $110 on that last box of pies.....wish me luck


I have a box of TWINKIES autographed by Mitt Rmoney I'll sell ya!! :o)


I wonder, Will the Teamsters union who settled with Hostess blame the bakers union for costing them 15,000 jobs?


I wonder will Randy ever admit he is management?

Second Opinion

I wonder if you will ever admit that greed, laziness, defense of those who should be fired, those who don't study enough in school should not make that which education provides, etc.

Are you so ignorant to believe that those who wash dishes, carry out rubbish, bake and deliver food should make what those who dedicated years of their lives getting an education? PLEASE ANSWER THIS AND SHOW FURTHER how your reasoning skills are that of Stalin and not the views of our Founding Fathers who believed that a person advances not because of strikes but because they use their brains.


@ Second Opinion:

The owner of the Jacksonville Jags, Shad Khan, came to this country broke and thought that washing dishes was a 'great' job.

Happened to catch an interview on "60 Mins":

I've often enjoyed talking to immigrants that came from crummy countries that "git it."

Most don't understand our fascination with socialism and political cronyism.


What a shame. Companies are not bluffing the unions when they state they will close up the business. The union is so stubborn that they rather go without a job then take a concession. Anybody who strikes in this environment is simple crazy. Companies rather take their operations overseas or fold up rather then deal with the unions. The unions have become their own worst enemies.


I'm not going to argue whether or not company administrators (up to and including the CEO) made mistakes. It's clear that things went wrong or the company wouldn't have been in the hole as far as it was. It's just as clear, however, that one of those mistakes was kowtowing to union demands and offering up pension plans, salaries, etc. that were unsustainable. And certainly I put it ALL on the union leadership that an attempt to correct those errors and keep the company alive was summarily rejected.

Isn't it interesting that the union leadership — you know, those people who claim to represent workers' best interests? — would rather NOBODY have a job than that ANYbody get any kind of a cut?

I wish all the best to those rank-and-file union members who must now find new jobs, especially in this economy. (As an aside, any bets as to how many will find positions that will pay the same or more than they would have made had they taken the Hostess offer?) But the union leadership? Bah! They've proved their "worth" to their membership yet again.

Phil Packer

Maybe the truth is that because people are starting to realize that this kind of "food" is unhealthy, their sales went WAY down...

Second Opinion

Romneys fault, LOL! This is what the AFL=CIO said and Bid Dog accepts it as fact, Talk about distortion.

Amazing how Democrats just follow and never think, they don't even need rings in their noses to be lead around, they just follow without question.


Wait. This what I read. The hourly employees took pay reductions, insurance cost increases, and decreased pensions. Then management pay increased by 80%. Soon after the CEO fled with his booty.

Did I miss something here?


Yes, you missed something. While SOME employees accepted the offers made by Hostess, the bakers' union refused. Although a few bakers did cross the picket lines, there weren't enough.

Hostess was already bankrupt. In an attempt to come out of bankruptcy, cuts needed to be made. The bakers' union apparently determined that they wanted what they wanted, and if they couldn't have it, then nobody would get anything. Nice "win," bakers' union!


kind of reminds me of the idiots at tsubaki. the workers were given an option and their union slave drivers drove them over the "fiscal cliff" because they thought they could dictate what the companies did. same result! just wondering how many of the union management team lost their jobs? imo union management are just as big of thieves as corporate ceo's.


The unions are missing a great chance to prove a point to the whole country. Let the unions buy the company, get rid of the managers, and show how to make it a profitable business with a great contract for the employees. $$$$


Employees owning and operating a co. is called an ESOP. They would need to come up with capital to buy it out. Private equity for the funding?

No bail out and restructuring from Mr. Obama and friends? Mrs. Obama more than likely hates Twinkies anyway.

Guess that it's after the election, he got those union votes and doesn't need 'em any more huh?


Employee stock ownership plan (ESOP). What I'm saying is. Let the union buy the company, and employ union members. If the union members don't like the contract, then the union can strike the union and every one is happy.


@ Westender:

Understood. Just saying that an ESOP is generally the way to go.

You do know that union pension trusts own a percentage of Chrysler and GM? I don't expect it to end well.

my oh my

Because of 5,000 union employees that went on strike 18,000 will lose their jobs.......


Its Michelle Obama and Bloomburgs fault; well they want you to eat healthy, Get up and move!!

I never understood the union mentality, which is that your employer is supposed to take care of workers for life. Even if the cost of labor outstrips any profit.

Though I will say, giving the CEO and key staff members raises during a time when the company was struggling is a joke. On the opposite side, union presidents are nothing more than self- serving hypocrites and leaches. Don’t believe it, look at someone like Hoffas salary, how much he spent to retain his position, and whom he gave raises. If they want management to work for free or take cuts; union presidents should do the same?

Glad I never had the need to let some union Neanderthal look out for my best interest.


Aren't union representative's salary based on hourly pay?


"Richard Trumka increased his yearly salary by nearly $74,000—from $165,000 to $238,975— in the last four years. That amounts to a 44 percent salary increase. In addition, Trumka will also get an AFL-CIO pension equal to 60 percent of his top pay."
I do not know ANYONE who works and pays into the AFL-CIO that makes anything close to that. So the answer in a word is "NO"


@ eriemom:

If you wanna focus on unfunded pensions, ya need to take a serious look at IL's public pensions and how the state's Dem leaders have been passin' the buck for yrs.

Their new higher income tax rates are bringin' in less revenue than before. Glad I got out when I did.


. I voted Republican because you can blame problems on poor people instead of the rich ones who actually run things.


I just seen an ad on CL for a LOCAL box of Twinkies for sale for $ 500. oo smackers.

LOL! Are they crazy? What are ya suppose to do with them?

Bronze them?


@ starryeyes83:

I wish him/her the best.

I spoke with a mgr. of a grocery store yesterday that said that some guy bought 18 boxes.

We both agreed that the names and recipes will be sold and that all the products will be back in stores baked by a different co.

I had read that Hostess said that they would sell their current baked product inventory to a discount house.

2cents's picture

In my eyes this is classic greed from all sides. I have read about the Hostess problems for a few years now. In general the whole thing is just sad, the rest of the world keeps laughing at the US anymore!


Always blame the people who actually work. They make the nasty food. obviously manage the place. 3 CEOs couldn't save it. I think if they had dumped king dons ands ho hos and zingers and stuck to their original plan, they might be doing alright. But those conservatives see Union and autotomaticaly they have their scape goat


Actually, the company was run by prominent democrats, including former democratic congressman Dick Gephart, whose own consulting group is an equitable partner in the Hostess group.


Silly libs, paychecks are for workers...


@ buttermaker:

Good research!

Actually the Progressives like to ignore the fact that big union public employee pension trusts like Calpers and Calstrs invest billions of dollars in both hedge funds and private equity firms.

The wealthy political elites appreciate the ignorance of their useful idiots.

The Big Dog's back

Moderators have removed this comment because it contained Personal attacks (including: name calling, presumption of guilt or guilt by association, insensitivity, or picking fights).


I read the entire article.
Hostess = Union workers + Democrat management decisions + media somehow blames Republicans.


Let's blame Obama! ou republicans are cutting off your noses to spite their faces. All these business are so worried about their wallets, they lost respect for themselves and their workers. Hostess has been going down hill for a long time. It"s free enterprise, better products, less expensive choices. Hostess needs to blame Hostess for not keeping up with the times and tastes. Too bad for the employees, that will be Obama's fault too. Scott Paper closed they tried to blame the Union too, but it was the city of Sandusky who wouldn't cooperate. STOP BLAMING UNIONS! There is a reason republicans are against unions because they want all the power, no other reason, but money and power. I'm sick of it. Conservatives keep your heads in the sand, this country is better off that way.


Maboom, read the article being discussed in the comments/replies above yours. When Democrat management decisions cannot satisfy the bakers' Union, I dunno who can.


Junk. They're selling the name. Maybe Entenmmans or Tastycakes will make them better.


That's okay, management's daughters can get a great job working for me @ my after 5shop.

The Big Dog's back

Vulture Capitalism (ponzi scheme) at it's best.


Hostess Twinkies CEO tripled salary to $2.5m while preparing to file bankruptcy


Hostess emerged from Bankruptcy in 2009 only to have to file again in January 2012. The Teamsters were amendable to concessions as they had the common sense to see that the company was not healthy. The Bakers union didn't run this company under, but they were clearly and undeniably the final straw that broke the camel's back.

Those trying to blame Romney (and those trying to defend him) can just stop. The election is over, Romney isn't going to run again. You need to find something else to use your spin on.

Those trying to blame Obama can also just stop. The election is over and the last time I checked, he can't run for a 3rd term. Did this company fail (again) under Obama? Yes, but his policies didn't cause the management to fail.


yet he saved a trillion auto jobs?


Ding dong, no more ho ho's? Twinkies are gone? No more raspberry coconut twinkies? I can't live without this stuff. There goes breakfast. SHOOT.


The latest news is that a Mexican company is in the wings for this sale. Lower labor and sugar costs would make it more profitable. Imported sugar has a tariff to protect US industry growers.


@ eriemom:

So you're for the special interests continuing to protect the wealthy U.S. sugar growers with taxpayer money?

What's not to like about Bimbo's mascot?

Why didn't Mr. Obama help save the co.; not unionized enough?

Mr. "I won" doesn't care anyway, the election's over.


Oh Winnie. Obama saved the Auto industry because it effects the whole country, one in eight jobs in Ohio are tied to the Auto industry. The country will move on without a Hostess Cup cake.


Good to see Zippy that you agree that Mr. Obama only nationalized GM and Chrysler for votes.


Haark! Is that the faint sound of Taps,, I hear, playing softly in the background?

[ well hey, they did for the leg lamp in Christmas Story ]


LOL....I am going to buy a twinkie and bury it in the backyard in a shoe box. Next summer I am going to dig it up. Want to come to the funeral? Its on Saturday. I am serving coffee and Ho Ho's. Know where I can get a buggler?

If the Twinkie is good in the summer, I intend to eat it. LOL


Capitalism is not about free competitive choices among people who are reasonably equal in their buying and selling of economic power, it is about concentrating capital, concentrating economic power in very few hands using that power to trash everyone who gets in their way.
David Korten


David Korten is confusing Capitalism with Corporatism. And neither party is innocent in regards to the Corporatism that may be trying to prevail in the world.

I am not a hard core Capitalist, by the way. I merely see it as a bridge allowing the safest possible passage from here to the ideal future (which, at this point, may also require that the people pay attention, investigate, and engage in strategic boycotts when necessary..and elect a President who will issue the crackdown while maintaining liberty).

Rand Paul (fiscal conservative, social liberal) 2016
..or installed as President sooner, by the military, in the event of collapse.

The Big Dog's back

What a crazy thing to say.

The New World Czar

Hey, Romney's not doing much after the election. Poetic justice would be served if Bain Capital bought Hostess and made it profitable without the unions. Now that is a win-win.


Maybe with enough pressure The president will bail out hostess like he helped with GM and Now GM posts that they are back on the stock exchange

Save the HOHO


Twinkies and HoHo's are evil and make people Obese so it will be a cold day when they get bailed out, They have been deemed EVIL by the obama's.

The Big Dog's back

You "dittoheads" (rushbots) may have to find a different way to listen to him since all his departed advertisers have put a hurtin' on local radio stations.


I cannot believe you people are making a political mess out of ding dongs and twinkies. Didn't you guys get enough of this during the elections? OMG...just goes to prove that politics never dies but apparently twinkies do. How sad. I hate to see my ho ho's go, but not the constant "I approve this message" on TV. One more of those and we would be watching only movies on blu ray for the next six months. LOL.

Give it a rest people. The elections are OVER in case you haven't heard. Perhaps you can get together and tell the GOP to buy Hostess, they need a new brand to stand behind. Heaven knows their old one went no where. lol

Just a Girl

In the meantime, try Mrs. Freshley's products. Moister with more sugary filling, like Hostess used to be in the 1970s. But no one can duplicate vanilla Zingers!


Mediation failed, next stop - liquidation.

"The Teamsters, which represents 7,900 Hostess workers, said the company's plan would improperly cut the ability of remaining workers to use sick days and vacation."

IMO, "someone" missed the much bigger picture.

bye bye Bellevue

Unions are a thing of the past, only used to protect lazy workers! The initial idea back in the day when they were legit for employee rights was fine, but they have taken advantage of employers over the years, and are no longer relevant! Hopefully whoever buys Hostess keeps unions out of their workforce and the company will do well!


Union workers are not all lazy. Without them giant corporations have no reason to pay living wages. The working class is being beaten down and the CEOs continue to benefit. Talk about taking advantage!


Have worked in a union shop, unions protect the guilty and take your money