November 20, 2012

Hostess, union to try to mediate differences

There are also reports that a private equity firm may buy the bankrupt bakery and reopen its shuttered plants, including one in Biddeford.

By Dennis Hoey dhoey@pressherald.com
Staff Writer

(Continued from page 1)

Today's poll: Twinkies

Do you think a new deal between Hostess Brands Inc. and its workers could save the company?

Yes

No

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Striking workers Nam Phan, left, and Randy Goodwin picket outside a Hostess Brand plant Friday, in Biddeford.

AP

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Gagne, who has been yelled at by passers-by and had a Honey Bun thrown at him, said he heard Monday that a box of Twinkies had sold for $10,000 on eBay.

Gagne said he likes the idea of new owners, as long as they commit to running a quality bakery.

Hostess CEO Gregory Rayburn told the Associated Press that there is enormous financial pressure to come to an agreement by the end of the day Tuesday.

Rayburn claimed it is costing the company about $1 million a day in payroll costs alone to pay for management charged with unwinding the company.

"We didn't think we had a runway, but the judge just created a 24-hour runway," said Rayburn, who added that even if a contract agreement is reached, it's unclear whether all Hostess plants will get up and running again.

Jerry Leighton of Biddeford, who has worked in the company's shipping department for more than 10 years, said he has doubts that a private equity firm such as Sun Capital would have the expertise to operate a bakery.

"I'm a little leery of them," Leighton said, as the driver of a passing car yelled: "We want Twinkies!"

Leighton said new owners would inherit a skilled and dedicated work force.

"Anybody who wants to come in here and take us over, we've got a great group of workers," Leighton said. "Just listen to the workers and we'll make a profit."

The company had said that it was saddled with costs related to its unionized work force. Rayburn said that Hostess was already operating on razor thin margins and that the strike was the final blow.

The bakers union said the company's demise was the result of mismanagement, not the strike. It pointed to the steep raises executives were given last year as the company was spiraling toward bankruptcy.

The company's announcement last week that it would move to liquidate prompted people across the country to rush to stores and stock up on their favorite Hostess treats.

Many businesses reported selling out of Twinkies within hours and the spongy cakes turned up for sale online for hundreds of dollars.

Although Hostess' sales have been declining in recent years, the company still does about $2.5 billion in business each year. Twinkies alone brought in $68 million so far this year.

Staff Writer Dennis Hoey can be contacted at 791-6365 or at:

dohoey@pressherald.com

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Today's poll: Twinkies

Do you think a new deal between Hostess Brands Inc. and its workers could save the company?

Yes

No

View Results