Business, Economics and Jobs

Hostess Brands, maker of Twinkies, wins court approval to close


A Hostess Twinkie golden sponge cake with its creamy filling exposed.


Tim Boyle

Twinkies-maker Hostess Brands Inc has been given court approval to begin winding down its operations after failing to reach an agreement with its striking bakers’ union.

While the 82-year-old company expects to find homes for many of its iconic brands, including Twinkies, Wonder Bread and Ho Hos, about 15,000 people would lose their jobs immediately, Reuters reported on the eve of Thanksgiving.

The remaining 3,200 workers would be out the door within four months.

"The wind-down was necessitated by an inflated cost structure that put the company at a profound competitive disadvantage,” Hostess said in a statement cited by ABC News.

“The biggest component of the company's costs was its collective bargaining agreements that covered 15,000 of 18,500 employees.”

Judge Robert Drain of the US Bankruptcy Court in White Plains, New York, gave the green light to the company’s plan for an “orderly wind-down,” the Los Angeles Times reported.

Hostess will spend the next 12 months dismantling the pastry business, closing 33 bakeries, 565 distribution centers, 5,500 delivery routes and 570 bakery outlet stores, the LA Times said.

Hostess filed for Chapter 11 bankruptcy in January, and had warned it would seek permission to shut down if striking workers didn’t return to their posts by November 15.

Hostess workers who are members of the Bakery, Confectionery, Tobacco Workers and Grain Millers Union had been striking since November 9 to protest court-approved cuts in wages.

But the company claimed the strike was costing it $1 million a day "at a time when the company lacked the financial resources to survive a significant labor action.”

More from GlobalPost: Twinkigeddon hits America

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