March 13, 2013

Fate of Biddeford bakery, workers hard to calculate

The future of the closed Hostess plant depends on the unknown plans of various buyers.

By Jessica Hall jhall@pressherald.com
Staff Writer

The fate of Hostess Brands' closed bakery in Biddeford – as well as the jobs that disappeared when the business shut down – remains uncertain, pending sales that will likely divide the products once made there among three buyers.

click image to enlarge

A truck enters the Hostess plant in Biddeford on Friday, Nov. 16, 2012. The fate of Hostess Brands' closed bakery in Biddeford – as well as the jobs that disappeared when the business shut down – remains uncertain.

Gregory Rec / Staff Photographer

Next week, Hostess will seek bankruptcy court approval to sell its Wonder bread and Twinkies brands in two separate deals. The Beefsteak bread brand is set to be acquired by Mexico's Grupo Bimbo in another deal.

Until late last year, the Biddeford plant made breads, including the Wonder, Nature's Pride, Home Pride and Beefsteak brands, and snack cakes such as cupcakes, Suzy Q's and Sno Balls.

The plant, which employed 370 workers, did not make Twinkies. It closed when Hostess shut down in November after years of financial problems and a strike by the bakery union. Hostess laid off more than 18,000 workers, including 500 in Maine.

In a hearing on Tuesday, the bankruptcy court will consider a $360 million bid by Georgia-based Flowers Foods, which owns LePage Bakeries in Auburn, to acquire most of the Hostess bread assets, as well as 20 bakeries -- including the one in Biddeford -- 38 depots and other assets.

The court also will decide on a bid from the private equity firms Apollo Global Management and Metropoulos & Co. to buy Twinkies, Ding Dongs, Ho Hos and other snack cakes for $410 million.

It's unclear whether some of the brands that the equity firms plan to buy -- such as cupcakes and Suzy Q's -- would be farmed out to Flowers and made again in Biddeford or whether they would be made in one of the five plants the equity firms want buy.

The Beefsteak brand is being acquired by Grupo Bimbo for $31.9 million.

Sue Tapley of Scarborough, who was a bread mixer for Hostess in Biddeford, said it makes sense for Flowers to make bread at the plant since some of the brands that Flowers wants to buy were made there previously.

Flowers has not said whether it will reopen the plant or rehire any of its workers. Flowers officials did not return calls for comment Wednesday.

"We're by no means ready to unlock the doors. There's a few steps more to get through," Tapley said, referring to the required Federal Trade Commission approval of the asset sales. "Hopefully they will push to get it open. But I'm not sure how fast the wheels are going to turn to make that happen -- if it happens."

The bakery union representing former Hostess workers has objected to the planned sale of the bread brands to Flowers, saying the bid offers no assurances that former labor contracts would be honored.

The Industry International Pension Fund also is objecting to the sale.

In a court filing on Feb. 25, the bakery union and pension fund said, "Flowers has not committed to preserve a single job, and in fact has affirmatively disclaimed any obligation even to 'consider' employing a single worker.

"Thus, while debtors' secured lenders may view Flowers' bids as the 'best' for getting themselves paid, Flowers' bids provide zero assurances that the rights of the debtors' workers will be protected," the filing said.

Union officials could not be reached for comment on Wednesday. Apollo Global Management and Metropoulos & Co. also did not return calls seeking comment.

Tapley, 59, said she may re-apply for her old job if the Biddeford plant reopens, but she's keeping her options open and considering going back to school, though she's not sure that makes sense at her age.

Hostess is also trying to sell its remaining brands, including Hostess, Dolly Madison, Drake's, Sweetheart, Eddy's, Standish Farms and Grandma Emilie's. An auction is scheduled for Friday.

Apollo and Metropoulos are competing against McKee Foods, the maker of Little Debbie snack cakes, for Drake's.

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

jhall@pressherald.com

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