LENEXA, Kan. -- Hostess Brands said Wednesday that it will go into liquidation unless bakers return to work by 4 p.m. Thursday. Bakers are striking in protest to a new contract imposed in bankruptcy court.
Twenty-four of 33 Hostess plants have workers on strike, including in Lenexa, Kan. If Hostess liquidates, 18,000 workers would lose their jobs. The company filed for bankruptcy in January for the second time since 2004.
Striking Hostess workers say ever since Hostess first filed for bankruptcy 2004 they have accepted all kinds of concessions. But Hostess filed bankruptcy again in January and the union says now Hostess wants an 8-percent pay cut, 20-percent increase in employee's insurance costs, and eliminating the pension plan.
"We as employees have made drastic sacrifices for our company and the company has not made any sacrifices for us employes," says striking worker Frederick Taylor.
Employees also question whether management has tightened its belt.
"They voted themselves bonuses, raises," says worker Steve Blakey, "and then they want us to take a cut because they're broke?"
Hostess CEO Gregory Rayburn says this strike could shut down the company, saying in a statement, "we simply do not have the financial resources to survive an ongoing national strike." On Fox Business Channel Monday, he said "we've said if you strike, we'll have to wind down the entire business."
In its statement, Hostess says it plans to file a motion with the bankruptcy court Friday, to liquidate its assets, and if the court grants that motion it would start the sale as early as Tuesday next week. Striking workers say they understand the risk.
"If they're going to shut it down, shut it down," says worker James Jones, "what's the worst that will happen, unemployment? We don't want unemployment we want to work in there, but at the same time you got to give us fair and decent wages."
Hostess said it will permanently close bakeries in St. Louis, Cincinnati and Seattle where a total of 627 workers are employed.