Hostess To Close Selected Bakeries Due To Nationwide Strike; Operations Continue At Majority Of Plants

Hostess Brands Inc. announced that it will permanently close three bakeries as a result of a nationwide strike initiated on Nov. 9 by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (Bakers Union) that has prevented the facilities from producing and delivering products.

"Our customers will not be affected because we will continue to serve them from other Hostess Brands bakeries, but sadly this action will result in the permanent closure of three facilities and the loss of 627 jobs," said Hostess Brands CEO Gregory F. Rayburn, in a prepared statement. "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."

The bakeries to be closed are located in Seattle, Wash., St. Louis, Mo. and Cincinnati, Ohio. The Seattle facility employs 110 people and produces Hostess cake products; the St. Louis facility employs 365 people and produces Hostess cakes, Nature's Pride and Wonder breads; the Cincinnati facility employs 152 people and produces Butternut, Beefsteak Wonder breads.

"Some employees are apparently under the misimpression that if they force Hostess to liquidate, another company will buy our bakeries and offer them employment," Rayburn said. "The fact is, the bakery industry already has far too much capacity, and there is a strong risk that many of our facilities may never operate as bakeries again once they are closed. I believe the leadership of the Bakers Union knows this fact, but is willing to sacrifice its Hostess employees for the sake of preventing other bakery companies from asking for similar concessions."

Rayburn continued: "That hardest part of the decision to close any facility is knowing that it will result in the loss of jobs for those Hostess Brands employees who did not support the strike and who wanted to help revive the company," Mr. Rayburn said. "They didn't ask for these strikes, but they are paying a terrible price for them."