November 17, 2012

Baker's ovens to go cold

Hostess will shut down after a decade of financial tumult, eliminating 500 Maine jobs.

By Jessica Hall jhall@pressherald.com
Staff Writer

(Continued from page 1)

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A tractor-trailer enters the Hostess plant in Biddeford, where employees continued to walk a picket line Friday after the company announced it would begin liquidation proceedings. “We still have a trust issue,” said John Jordan, an agent for the bakery’s union. “So we will be out here until we know for sure,” he said.

Photos by Gregory Rec/Staff Photographer

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Joe Locey of Biddeford, a 13-year employee at the local Hostess plant, talks to a plant supervisor who was driving away from the site Friday. Hostess Brands Inc., which has opted to close its doors after 82 years following a decade of financial tumult, laid the blame on its bakery workers union, which went on strike Nov. 9.

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Rayburn said the impact of the strike makes it too late to save the company even if workers changed their minds. “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.

Hostess said it was unprofitable under its current cost structure, citing the costs of union wages and pensions. Union workers countered that the company, owned by private equity firm Ripplewood Holdings and several hedge funds that include Silver Point Capital, failed to invest in new technology, marketing and improvement of factories and trucks.

“What’s happening with Hostess Brands is an example of what’s wrong with our economy, as Bain-style Wall Street vultures make themselves rich by making America poor. Crony capitalism and consistently poor management drove Hostess into the ground, but its workers are paying the price,” Maine AFL-CIO President Don Berry said in a statement. “The real story of what is happening in Biddeford is that 'economics of Bain Capital’ came to Biddeford and now the workers and community are paying the price.”

Staff writer Eric Russell and the Associated Press contributed to this story.

Staff Writer Jessica Hall can be contacted at 791-6316 or at:

jhall@mainetoday.com

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Additional Photos

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Hernan Descart points to a car carrying two supervisors away from the Hostess plant on Friday. Descart, of South Portland, worked at the plant for eight years.

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Striking workers erected a board shaped like a coffin lid after Hostess announced it would start proceedings to liquidate the company.

 


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