Hostess mediation fails, company to continue liquidation

By The Associated Press

Hostess Brands Inc. lived to die another day.

The maker of Twinkies and Ding Dongs said late Tuesday that it failed to reach an agreement with and its second biggest union. As a result, the company will continue with a hearing on Wednesday in which a bankruptcy court judge will decide if the company can liquidate

The talks had come as a surprise after Hostess declared last week it would move to wind down its business and start selling off its assets in bankruptcy court. After making its case to liquidate on Monday, however, the bankruptcy judge hearing the case noted the two sides hadn't yet tried resolving their differences through private mediation. The judge noted that 18,000 jobs were on the line and urged the company and union to try to resolve their differences.

Hostess shut down its three dozen plants late last week after it said a strike by the union crippled its ability to maintain normal production. The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents about 30% of the company's workers, says the company's demise was the result of years of mismanagement, however, and that workers have already given steep concessions over the years.

Local Hostess employees working at its Northwood facility say they are disappointed with the outcome and are moving on.

"I am not surprised and I am so thankful because now we might not have to stand behind this barrel anymore and we can go home.  Get our unemployment and it's done with . This isn't what anyone wanted? No it's not what we wanted but the chapter is closed now, you know what I mean. We can move on," said Melissa White.

"I still hope that another company is out there that will buy this half, whole or whatever you know. Anything that will put us back to work," said Mark Popovich.

"We're trained, we know what we are doing in there and it's a good PR move for a new company to take all these people that are displaced to come on in and go to work," agreed White.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.