Hostess Bankruptcy 2012: Maker Of Wonder Bread, Twinkies Prepares To Refile For Chapter 11

Hostess Brands Inc., the maker of Wonder Bread and Twinkies, is preparing to refile for Chapter 11 bankruptcy protection just two years after emerging, The Wall Street Journal reported Monday.

A spokesman for the privately held Irving, Texas, bakery company declined to comment on the report.

The Wall Street Journal said people familiar with the matter said the company is facing a cash crunch with more than $860 million in debt, high labor expenses and rising ingredient costs.

When the company, then called Interstate Bakeries and based in Kansas City, Mo., filed for bankruptcy protection in 2004, it blamed low sales and high fixed costs. It emerged in February 2009.

Hostess Brands employs about 19,000 workers and operates in 49 states. Annual sales are about $2 billion, according to the company's website.

Here are some other recent major bankruptcies:

Comments

[trekkie888]

10:46 PM on 01/11/2012

I retired from Hostess Brands in 2011, and I can tell you from experience that it wasn't because labor
costs were too high. We were paid less than our competitors and contributed to our Health Plan.
Management had no clue on what was going on in the real world, and they were resistant to any changes suggested by employees. Their take was we know everything and you peons don't.

[Labor Party]

04:58 AM on 01/12/2012

Exactly! You try and make suggestions like using the original yellow wrap and the old formulas and they look at you like you are out of line or something....

New machinery intended to replace workers wound up jamming and crippling the product etc. It was due to poor management IMO.

[jannas2cents]

09:00 PM on 01/11/2012

If Hostess Brands was being restructured why haven't they restructured their product line? Twinkies and Wonder Bread are no longer popular by educated food conscious consumers, so it's time they fell by the wayside. Twinkies have been around since at least the 1920s when just getting enough to eat was a priority and the quality of the food just didn't matter very much. Wonder Bread was popular in the 1950s, but I don't know of any mother who'd still feed it to her children. Any company that expects to survive must change with the times and adjust to changing consumer demands. They can't expect to go on forever doing the same thing. If they do, they can expect to fail and disappear.

[Labor Party]

05:15 AM on 01/12/2012

Contrary to what this article says about most of its competition being non union.....that is not the case. (there are union competitors who make more and do well)

The product line has been restructured many times and fancy eye catching boxes and wrap for marketing purposes have been added. When you depend on these gimmicks and keep changing the formula (while raising prices) you can see why they have problems.

They also worked their crews with mandatory overtime until they were like zombies because they did not want to hire additional employees and pay their benefits. Shareholders became very upset after the first debt re-organization and filed lawsuits because of late earnings reports etc. The trend is to smaller independents..............blaming their problems on health conscious consumers is comical at best. Check out the calories consumed at any small independent bakery or Starbucks. People are buying the stuff with CALORIES.

[niteowl530]

08:46 PM on 01/11/2012

So tired of seeing this BS about unions being a bad thing. What happens when you kill all the unions and reduce the members' salaries? The economy in general takes a hit across the board because those people are not spending as much. Actions have consequences, be careful of what you wish for.

[Labor Party]

05:20 AM on 01/12/2012

This article seemed to take that position.....(as a union vs non union thing) not the case here.

It is clearly a case of mismanagement. (two to three year back to back bankruptcies?)

[visitrubyfalls]

10:10 AM on 01/12/2012

The union isn't going to do anything but rubber stamp what the company wants. My husband works there now. The union takes the monthly dues, but is WEAK and not supportive.

[ravenmom2800]

07:37 PM on 01/11/2012

OMG.....I grew up on Wonderbread. NO MORE TWINKIES? Red necks will have to find another way to build a wedding cake!

[Labor Party]

05:21 AM on 01/12/2012

Larry the Cable Guy will have to fry his own Twinkies.

[Dan J S]

12:29 PM on 01/11/2012

Unions killed the twinkie. What next? This is exactly why we need to support Gov. Walker like leadership. Unions are killing jobs, products, factories and lives.

[Gudrun]

12:55 PM on 01/11/2012

Lies.

[matdough]

07:24 PM on 01/11/2012

You really do not know what your talking about !

[Amvious]

11:39 AM on 01/11/2012

Wasn't this predicted in the movie Zombieland? O_o

[beardown]

08:31 AM on 01/11/2012

With the war on fat and high union pensions Hostess doesn't have a chance!

[Labor Party]

05:23 AM on 01/12/2012

Wrong on both counts.

[beardown]

05:53 AM on 01/12/2012

No i am absolutely right!

[derivoman]

07:07 AM on 01/11/2012

Many name brand food manufacturers will be following Hostess to bankruptcy court. Fewer people are willing to spend extra on Wonder bread when Wal-Mart brand bread is just as good. You can advertise on TV all you want, but more and more Americans are buying generic brand paper towels rather than Bounty.

[BigJared]

02:33 AM on 01/12/2012

This is a really good point. It's the economy, stupid.

[ccdae5]

08:00 PM on 01/10/2012

Dammit! I love Twinkies!

[mugwhump]

07:36 PM on 01/10/2012

Probably used their profits to build a new plant in mexico like general motors did.

[Labor Party]

05:26 AM on 01/12/2012

They tried that..............non union workers were not as productive and the experiment failed from sources I heard.

[mericart]

06:50 PM on 01/10/2012

I smell another scheme to lay off workers and move production to China. All that pesky cost-of-living wages and union-negotiated benefits don't exist over there.

[fineartist1]

02:02 AM on 01/12/2012

Yes and they can actually make a profit, what 'being in business' is all about.

[fortressfountain]

05:00 PM on 01/10/2012

This company like tastycake faces challanges. Soon you may not be allowed to eat the cakes as the insurance companies and employers do not even allow people to smoke. Even if not-people of my generation-the boomers consume a lot less of this junk. They also keep raising the prices. Most people may spend a buck or less. No one wants to buy the junk for $2.50 apiece.
They also use junky ingredients and do not taste as good. Lots are probablly made in China. Who knows as you never hear the truth.
They want to stamp food "made globally." You can just drop dead-they do not care what is used.

[bbbbmer]

04:51 PM on 01/10/2012

There go all those HoHo's and DingDong's.... If only the GOP lineup would follow suit....

[BluebirdofUnhappiness]

08:10 PM on 01/10/2012

But I love frozen HoHos. Haven't had one for ages. Little debbies aren't nearly as good.

[Kevin Arthus]

03:39 PM on 01/11/2012

Frozen? Never tried that.

[Dan J S]

12:31 PM on 01/11/2012

Democratic unions killed the HoHos. Is that the reference to kill off the GOP? I think the democrats need to first keep on assassinating the rest of the US industry.

[Gudrun]

12:57 PM on 01/11/2012

Yeah, that pesky worker safety is ruining it for everyone. Good luck immigrating to China and getting a job there.

[psnyder325]

07:40 PM on 01/11/2012

Yep. Let's reduce the wage of the American worker to $0.50 per hour, get rid of that pesky health insurance stuff and get rid of OSHA. THEN we can compete with the Chinese or Mexicans. Oh, and let's get rid of the EPA as well, since we don't care what industrial waste is pumped into the air.....oh....wait....that IS the GOP Platform this time out, isn't it?

[synbadd]

04:26 PM on 01/10/2012

Looks like the unions strikes again

[msm0207]

06:25 PM on 01/10/2012

And the nutrition nazis!

[psnyder325]

07:43 PM on 01/11/2012

One is not a "nutrition nazi" for pointing out that most of the stuff in junk food is junk. Nor is someone inappropriate for not wanting their family to eat frankenfood. My wife and I cook plenty of tasty stuff, including deserts, but from scratch and organic ingredients. It really makes a difference. Baking an organic apple pie with Vietnamese Cinnamon right now. Smells great, and doesn't have a shelf life of 15 years due to preservatives.

[Labor Party]

05:29 AM on 01/12/2012

Other commercial union shops are doing well.

Clearly a management problem if you take the time to google it.

[Quasi Libertarian]

04:11 PM on 01/10/2012

WOW.....a failing company.....Hmmmmmmm.  It looks like an investment company like the one Mitt Romney used to run needs to get involved to insert some cash, restructure it or the company folds.......what to do?  If nothing is done, the workers could be out of a job as the company goes out of business or maybe it can be saved with investment......

[ccdae5]

08:03 PM on 01/10/2012

Looks like another company that can't make it in the current administration's anti-business climate. Got to HOPE for a CHANGE in 2012!

[BluebirdofUnhappiness]

08:10 PM on 01/10/2012

I think the 1st bankrupcy was during the Bush Admin.

[psnyder325]

07:44 PM on 01/11/2012

Has absolutely nothing to do with the Obama administration. They filed for bankruptcy before in the Bush administration. And that wasn't BUSH's fault, either. People are eating less and less of what they make and they're not changing with the changing tastes of America. Hey. This is the FREE MARKET. Businesses that don't keep up fail. Those that change survive. Get over it.