Following a nationwide strike by its baker’s union, Hostess Brands Inc. has announced that it will be permanently closing three bakeries, laying off 627 workers in the process.
Hostess, which operates 36 bakeries nationwide and has a workforce of approximately 18,300 employees, announced Monday its intention to close facilities in Cincinnati, St. Louis and Seattle.
Earlier his month, the Irving, Texas-based bread and snack cake maker, which includes such brands as Wonder, Drakes and Nature’s Pride, warned of potential layoffs which it attributed to production slowdowns caused by union strikes.
"We deeply regret this decision, but we have repeatedly explained that we will close facilities that are no longer able to produce and deliver products because of a work stoppage — and that we will close the entire company if widespread strikes cripple our business," Hostess Brands CEO Gregory F. Rayburn said.
Despite the bakery closures, the maker of such iconic snacks as Twinkies, Ho Hos, Ring Dings and Suzy Q’s, among many others, assured customers that their favorite treats will still be available.
The strikes, which began on November 9, were in protest of the benefit and wage cuts ushered in under the new plan, which the union rejected in September. Thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union participated in the strikes.
According to union officials, Hostess also stopped contributing to worker’s pensions in 2011 as reported by NBC affiliate KSNT.com.In January, Hostess filed for Chapter 11 bankruptcy citing heavy debt and high pension obligations. In response, the struggling company, which was founded in 1930, planned to freeze employee pension payments, reduce workers' health benefits and cut employee pay by 8 percent according to the Dallas Business Journal.
This is the second time in a decade Hostess has filed for bankruptcy. The company is nearly $1billion in debt according to a report by CNN.
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