Hostess Threatens Liquidation if Strike Isn't Resolved

Moneybox
A blog about business and economics.
Nov. 15 2012 12:16 PM

Hostess Threatens Liquidation if Strike Isn't Resolved

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Hostess Brands, purveyors of Wonder Bread and Twinkies, filed for bankruptcy back in January seeking to, among other things, get concessions out of the labor unions that represent many of its workers. They failed in that quest, and so instead used the bankruptcy process to unilaterally impose substantial wage and benefit cuts which in turn have prompted a strike from the unions.

Now in response, Hostess management is taking the rather dramatic step of saying they'll liquidate the entire company if the workers don't call off the strike by the end of today.

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An important part of the context here is that as I wrote back in January, liquidation has long looked like a likely possible outcome here. This is Hostess' second bankruptcy in three years, and the company is basically floundering product-wise in the contemporary market place over and above any labor issues. Even in the absence of a strike the company may well end up being dissolved.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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