EagleTribune.com, North Andover, MA

November 17, 2012

Hostess shutdown leads to rush on Twinkies; not so sweet for workers

By Bill Kirk

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LAWRENCE — For some, it’s a comforting childhood memory — sitting in front of the TV, munching on that creme-filled, golden sponge cake treat.

For others, it’s just a popular if not entirely healthful confectionary creation.

And unless the brand is sold and remade by another bakery, the iconic Twinkie, that all-American snackfood, will soon disappear from store shelves forever.

“I’m going to miss them,” said Christina Turcotte, 40, of Methuen, as she left the Hostess/Wonder Bread outlet store and distribution center on Andover Street in Lawrence yesterday morning.  “I grew up with them. So I’m stocking up.”

She bought three boxes of Twinkies, along with several boxes of cupcakes, coffee cakes and Devil Dogs.

Yesterday, Hostess Brands, which also makes Ding Dongs, Ho Hos, Sno Balls, Wonder bread and Home Pride, among many other products, announced it was going out of business, closing plants and laying off all of its 18,500 workers. The wind-down means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States.

Among those affected are the 23 employees who work at the Lawrence distribution center and outlet store at 647 Andover St., a fixture in the city since the 1960s.

The news came as a surprise to workers there, who are members of the Teamsters union. They said the Teamsters had voted 2,600 to 2,300 to approve the company’s latest contract proposal, while the other big union, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), rejected the proposal and called for a general, nationwide strike.

Joe Medeiros, 52, of Peabody, who has worked at the plant as a driver for nearly 18 years, said he was told early Friday morning about the shutdown.

“My boss called me a little while ago and said they are closing us down,” Medeiros said yesterday around 8:30 a.m., as he and several other workers gathered in the break room, preparing to go out on delivery routes until they were told otherwise.

Tim O’Connell, 48, of Litchfield, N.H., said the company had been run into the ground by a revolving door of executive leadership teams, which have been cutting wages and benefits to workers while making a series of bad business decisions resulting in millions of dollars in losses.

“I’ve been through three pay cuts in the last 16 months, and they stole our pension,” he said, referring to a contention made by union officials that the company was deducting pension payments from employee paychecks but not depositing that money into the pension fund.

He noted that the company, run by corporate takeover specialists who don’t understand the bakery business, recently ran a promotion on baked rolls that lost $40 million in one summer.

“They have destroyed this company,” O’Connell said. “It’s just a case of mismanagement.”

Tom Becker, a spokesman for the company, would not comment on allegations of mismanagement, but said the company could simply no longer afford to make pension payments. He was unaware of any other issues with pensions.

A statement posted on Hostessbrands.com yesterday said the company was closing because of the pending strike.

“Hostess Brands is winding down operations and has filed a motion with the U.S. Bankruptcy Court seeking permission to close its business and sell its assets, including its iconic brands and facilities,” the statement said. Bakery operations had been “suspended at all plants. Delivery of products will continue and Hostess Brands retail stores will remain open for several days in order to sell already-baked products.”

The closure is the result of a protracted labor dispute, according to company CEO Gregory Rayburn.

“We deeply regret the necessity of today’s decision,” he said. “But we do not have the financial resources to weather an extended nationwide strike. Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”

News of the shutdown was hard on long-time customers at the popular outlet store.

“I haven’t had Twinkies in years,” said Ray Damphousse, 64, of Methuen. “I heard about it on the radio. Normally I don’t fill up on junk food but these could be the last Twinkies around. Unfortunately, it’s putting people out of work.”

Eduardo Duran, who owns the Tower Hill Market in Lawrence, said he wasn’t surprised to hear that the company is shutting down due to mismanagement. He said the company’s deliveries to his store were intermittent, even though he paid extra for delivery service. He decided to just go to the retail store and buy the product himself.

“I was willing to pay for delivery but the driver never came,” he said. “So I come over here and buy it.”

He said the baked products are high-quality and fresh.

“I’m really disappointed,” he said.

Guy Dube, 66, of Methuen, agreed.

“It’s too bad,” he said, as he loaded 10 loaves of Wonder Bread and wheat bread into his car. “I’m going to freeze this. It could be my last.”

Tom Hensiek, 52, of Hampstead, N.H., said he is hopeful that someone will buy the popular brands and continue selling them.

“I just don’t know how long that will take,” he said. “So I said, ‘I’d better swing by, this might be my last chance.’”

He bought Twinkies, Ring-Dings and his favorite, Soft Peppermints.

“I might keep the Twinkies and sell them on eBay in 50 years,” he said. “They might be worth something then. And they’ll still be good.”

Pat Babikian, 53, of Lawrence, claimed to have purchased the last box of Twinkies from the outlet store.

“My husband thought I was crazy,” she said, as she stacked boxes of Hostess products on the back of her car to display them for a photographer from The Eagle-Tribune. “He said I didn’t need to get down here early. But it’s already crowded.”

In fact, by around 10 a.m., there were a half-dozen cars in the usually quiet parking lot.

“Pretty soon, there will be no more Twinkies,” she said. “I guess I’ll have to substitute them with fruit.”

Becker said the company is hopeful that buyers will emerge for the company’s well-known brands.