Hostess bankruptcy stops production

By: Sarah Pearson

Hostess, the maker of the Twinkie and Wonder Bread, filed for bankruptcy for the second time on Jan. 11.  The company carries $860 million of debt and is currently losing sales.

In 2006, Hostess filed for bankruptcy under the name Interstate Brands Baking.  It paid $10 million to have the name change to Hostess Brands last year so it could file once again for bankruptcy in rule to having to wait 7 years after the first bankruptcy.

Hostess employs roughly 19,000 people.  Hostess has been facing a money squeeze with high labor costs and rising prices for ingredients states the people familiar with the matter.

Hostess will try to reduce its enormous amount of debt and re-negotiate labor contracts.  However, some workers aware of the company’s enormous debt have to decided to quit their jobs including Greenwood’s Dwight Wilcoxin.­­­­­­­­

“Since I have been here in Greenwood, they have cut nine routes out of this building.  They are trying to cut costs, but it’s really costing,” Wilcoxin said.

Hostess has not been paying in Wilcosin’s pension.  Poor management is one of the factors of this enormous amount of debt.  Hostess wants to reduce benefits for its workers.

The Hostess bankruptcy and financial issues has worried many employees.  When Wilcoxin was asked what worried him the most about Hostess’ financial issues, he mentioned the stress of the unknown and never knowing if he had a job or not.

Wilcoxin’s last day with Hostess was Jan. 13.

Now with the healthier option of choosing wheat bread, Hostess struggles to keep its Wonder Bread customers.  Hostess released wholegrain bread called Nature’s Pride, though it failed to become commercially successful.

Many customers enjoy eating white bread and they would be disappointed if Hostess shut down leaving them unable to obtain Wonder Bread in stores.

“I like Hostess’ white Wonder Bread.  I also eat Sunbeam, but I like Wonder bread more,” sophomore Erin Osborn said.

Hostess still has fans, especially in the dessert department.  Twinkies have been one of Hostess’ most loved products for decades.

“My favorite thing of Hostess is the chocolate cupcakes with the cream filling!  I don’t care for Twinkies though,” sophomore Megan Schwartz said.

With generic brands similar to Hostess’ products, some people wouldn’t be affected that much if Hostess did shut down.  Some students like different desserts and products other than those of Hostess.

“I’ve never really cared much about Hostess’ products.  So the bankruptcy doesn’t matter much to me,” sophomore Drew Gohman said.

Some customers of Hostess don’t think they can just switch to generic brands and other similar dessert treat companies if Hostess does shut down.

“I would be sad if Hostess closed because I love their cupcakes.  You’ve got to have Hostess’ and not just the generic store bought brands,” Schwartz said.

Time will only tell if Hostess will recover from this huge financial problem.  Companies sometimes do recover from bankruptcy but it is very difficult.

Hostess fans, buy all you can while Hostess products are still on the shelves.  They might be gone before you know it!