UPDATE: Production at Waterloo Hostess ceases, retail outlets to close in 7-10 days

2012-11-16T22:00:00Z 2013-04-04T11:45:44Z UPDATE: Production at Waterloo Hostess ceases, retail outlets to close in 7-10 daysBy JIM OFFNER, Waterloo Cedar Falls Courier

WATERLOO, Iowa --- Wonder Bread is toast.

That became apparent quickly Friday when Irving, Texas-based Hostess Brands Inc., which has been in Chapter 11 bankruptcy for the second time since 2004, announced that it was shutting down all of its operations and liquidating its assets in response to a nationwide strike called a week earlier by the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union.

Hostess had threatened to shut down the company if the union didn't call off a nationwide strike by 4 p.m. Thursday.

It didn't.

Friday’s announcement put 18,500 Hostess employees out of work, including 59 at the Waterloo plant, at 325 Commercial St. and the company’s distribution center at 2366 Newell St.

By late morning, there were no more than 10 people left in the building, according to one departing worker’s account.

The Waterloo bakery produced Wonder, Home Pride and Nature’s Pride breads.

Also affected are about 30 truck drivers.

“There’s about 80 people affected, with salaries ranging between $36,000 to $60,000, and that’s all going to leave the Cedar Valley," said Dan Derifield, shop steward with Teamsters Local 238, who is representing the drivers.

At least five workers who were approached at the plant Friday said they were not allowed to talk about their situation. A truck driver getting set to pull his rig out of the loading dock was asked if he had a load in the trailer.

“There are no more loads,” he said, declining further comment.


Back to court Monday

Hostess filed a request for a hearing on its plan to “wind down” its operations Monday. It also requested that objections to its plan be filed the same day.

Derifield said the Teamsters, who approved Hostess’ proposal in September, have 21 drivers working out of the Newell Street distribution center and another nine who deliver to local stores out of a facility on Burton Avenue.

The Waterloo bakery was an important part of Hostess’ system, Derifield said.

“The bakery makes bread for Pittsburgh, Kansas City, St. Louis, Detroit. It reached out to quite a few places in the country,” he said.

Derifield, who said he has delivered Wonder Bread out of Waterloo for 27 years, said he’ll have to “wait and see” what happens.

“ I've gone through these bankruptcies at a couple of other places. It kind of leaves you in limbo until one day you show up at work and there’s a sheriff there who tells you that you can go in and get your property and then have to leave,” he said.

Production ceased Friday morning in Waterloo, according to Hostess spokesman Erik Halvorson.

“Today will be the last day of production,” Halvorson said Friday. “Local retail outlets will remain open for seven to 10 days. Today’s deliveries to customers will be the last.”

The Wonder Hostess Bakery Outlet Store, at 2320 University Ave., in Waterloo, had its remaining inventory of Twinkies cleaned out within about an hour Friday, according to store manager Sherry Yearling.

“It’s gone; there’s not much left,” Yearling said.

The store laid off two of its four employees Friday. Two remain to operate the store until the rest of the stock is gone, and then, the store will close, probably no later than Tuesday or Wednesday, Yearling said.

Hostess said its debtor-in-possession lenders had agreed to allow it to retain access to $75 million to fund the wind-down process.

But the company said Waterloo’s work was done.


Union response

James “Red” Wilson III, a 20-year employee and steward for BCTGM Local 36, said he had not heard from the union.

“I don’t know what they’re doing,” Wilson said when asked about a union response.

He had just finished his shift Friday morning and said he was planning to return to work for his next, which will be Saturday night.

“As far as I know, unless they tell me different,” he said. “I haven’t heard otherwise.”

A call to the union’s main office in Kensignton, Md., was not returned.

Union President Frank Hurt has placed blame for Hostess’ downfall on “nearly a decade of financial and operational mismanagement.”

Hostess has 565 distribution centers and 570 bakery outlet stores, as well as 33 bakeries.

Its brands include Wonder, Nature’s Pride, Dolly Madison, Drake’s, Butternut, Home Pride and Merita and Twinkies, among other products.


Winding it down

Hostess’ “wind-down plan” consists of six four-week periods for each bakery. The first four weeks will require about 28 workers at each plant to carry out.

By the end of the third four-week period, each plant will maintain one worker on-site.

The Waterloo plant remained active through the week, even though 24 plants had some sort of job action. The Waterloo workers’ moods remained upbeat throughout, Wilson added.

The national union had voted in September by a 92 percent majority to reject Hostess’ “last/best/final” offer for contract concessions. Wilson said those terms stated employees would have to take a pay cut of 8 percent and would be required to pay all of their medical insurance premiums.

Waterloo workers voted the proposal down nearly unanimously.


‘Rapid response’ set for Tuesday

A community rapid-response team has organized a meeting for displaced Hostess workers from 9 to 11 a.m. Tuesday in Tama Hall at Hawkeye Community College, 1501 E. Orange Road, Waterloo.

Invited organizations are Operation Threshold, Hawkeye Community College, Cedar Valley IowaWORKS, Consumer Credit Counseling, Iowa Department of Human Services, Iowa Vocational Rehabilitation Services, Iowa Workforce Development, Northeast Iowa Food Bank and the Educational Opportunities Center of the University of Northern Iowa.

Among the topics to be addressed will include unemployment insurance, job searches, maintaining a credit rating, food, utility assistance and area educational opportunities.

Anyone who can’t attend can call Jeanie Wright, Cedar Valley IowaWORKS director, at 291-2705, ext. 281.

Organizers likely will talk to area companies about holding a job fair for displaced workers, Wright said.

Fortunately, there likely are ample opportunities for workers to find other suitable positions locally, said Steve Dust, CEO of the Greater Cedar Valley Alliance & Chamber.

“Kind of the common theme through most of it (the period of recent closures) is a very strong local economy that is being impacted by external factors we couldn't affect,” he said. “If there’s a silver lining, it is our regional economy continues to be very strong and thriving. We still have very strong manufacturing and technology sectors that are hiring.”

Dust added that the bakery plant likely wouldn't be idle for long.

“This is valuable brand that somebody will want to buy and own,” he said. “We were very fortunate we still had an operating bakery that continued to add value, so we do have the opportunity to market to a new owner that this was an efficient operation to continue in some form.”

If not as a bakery, then some other use, he said.

“I think the plant site is a key site for our Waterloo’s redevelopment planning, so there may be some reuse opportunities there pretty quickly,” Dust said. “We don’t know what the process will be to reacquire that property. I don’t think we look for that property to sit idly very long.”

Copyright 2015 Waterloo Cedar Falls Courier. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(20) Comments

  1. KC
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    KC - November 19, 2012 12:17 pm
    At quik star: Hostess Honey Bun = $1.69 / Little Debbie Honey Bun = $.75 and just as good.
    Case closed.
  2. whtnationalist
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    whtnationalist - November 17, 2012 6:10 pm
    There will soon be no money for unemployment, food stamps, etc. If no budget agreement is reached in about 45 days everything gets cut and taxes get a HUGE increase. Even if an agreement is reached the ability to borrow to cover the deficit is reaching an end. The only option is to put Americans back to work. Starting with the jobs stolen from us by illegal immigrants.
  3. whtnationalist
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    whtnationalist - November 17, 2012 6:08 pm
    Where will Obama find the money to keep Americans paid off with food stamps, unemployment, welfare? See earlier comments about how money is running out. The only choice left is to put Americans back to work.
  4. Dave88
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    Dave88 - November 17, 2012 12:47 pm
    You are correct although a lot of folks can't accept it.
  5. GloriaJL
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    GloriaJL - November 17, 2012 12:46 pm
    It is sad that the workers are losing their jobs---but it was inevitable. If the company has taken bankruptcy twice, and the employees have taken pay cuts before---maybe management bears some responsibility. Those of us who remember the Rath Packing debacle know that they employees gave and gave, and the company closed anyway. I do believe that the city had no intention of helping keep that plant open. They have been salivating to get their hands on that plant. We will pay a fortune to acquire and tear it down. Somehow they will convince us that it is the piece of the puzzle that will make downtown "vibrant" and people will be lining up to move here.
  6. whtnationalist
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    whtnationalist - November 17, 2012 12:06 pm
    Nothing happens in a vacuum. Layoffs are related to decline in sales and increases in employee costs. Sales depends on level of unemployment and general economy. Employee costs depend on health care costs (Obamacare), payroll taxes, etc. Government ability to provide a safety net (food stamps, unemployment, welfare) depends on tax revenue, debt financing, spending on other things. Look at Greece and Spain to see what happens when tax revenue and spending result in a deficit and borrowing is no longer possible. It is about to happen here, so who is not going to get food stamps, who won't get unemployment, who won't get welfare.
  7. whtnationalist
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    whtnationalist - November 17, 2012 11:48 am
    Our federal government is bankrupt. Who is going to pay unemployment, food stamps, welfare, etc? Right now Social Security is providing most of the loans to the feds. Social Security Trust Fund invests in treasury bonds. The trust has lots of money saved up to make Social Security payments for many years ahead. But very soon the Trust will be cashing in those treasury bonds and not buying more. The single largest lender, Social Security, will not be able to finance the federal deficit.
  8. sosadd
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    sosadd - November 17, 2012 9:37 am
    I like how the mayor came on and said he was doing everything he could to save the bakery and its employees - NOT TRUE - he was looking for votes - the city cant wait to get a hold of that property they have ever since they recieved money from vision Iowa - if you look back the at drawings the property where the bakery sits is going to be parking for river theater - mark my words the city will do evrything in its power to aquire this property , my guess within the next few months there will be news that waterloo city has aquired the property - so sad the bakery was built in 1926 and is still standing strong - Remeber that when you vote for the next Mayor of Waterloo !
  9. whtnationalist
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    whtnationalist - November 17, 2012 9:37 am
    So now we have lots more Americans out of work. Those who can not find work in line with their experience will have to apply for unskilled jobs. Like meat packing, manufacturing, etc. That means more unemployed Americans are competing with cheaper illegal immigrants for unskilled jobs. We all know who gets the jobs. We all know that the feds do not enforce immigration laws. Employers are free to hire cheap illegals. Angry out of work Americans vs arrogant employed illegal immigrants. Neither political party offers any changer either. Sadly change through the bullet is inevitable.
  10. AndyDandy
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    AndyDandy - November 17, 2012 8:15 am
    I think the city should buy this property for several million dollars and give it to WDC. redistribute our money and give it to just a few buddies.
  11. unigrad2008
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    unigrad2008 - November 17, 2012 3:52 am
    Why is it that Hostess can fail however the government will bail out banks. Why not let them fail too? Thats capitalism, no?
  12. cynicalme
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    cynicalme - November 16, 2012 5:54 pm
    Not a big deal. Obama will just have to print some more food stamps, since he is "The Food Stamp President.
  13. teacher50701
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    teacher50701 - November 16, 2012 5:12 pm
    More parking for the SportsPlex!
  14. skelloch
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    skelloch - November 16, 2012 4:03 pm
    Just the tip of the iceberg, this is going to continue, along with companies downsizing as a result of increased costs. If you have enough savings for four more years you might be able to survive. If not, your standard of living is going to be reduced, which is another result of "redistribution of wealth". You asked for it.
  15. azne69
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    azne69 - November 16, 2012 12:55 pm
    Union greed, that's all it is. Company makes a profit so it can survive and keep workers working. To all those that slam the company better look at what the union did to you. You asked for it, you got it now.
  16. slimqnn
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    slimqnn - November 16, 2012 12:16 pm
    So it was the greedy workers that ran the company into the ground? The management had nothing to do with it?
  17. avee
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    avee - November 16, 2012 12:14 pm
    Now they can draw 2 years of unemployment then get on disability. Maybe we can get our twinkies from China like almost everything else. Obama dosn't care as long as those union bosses work for the democratic party. Eventually the entire country will go the way of Hostess. Everybody will be on wellfare and nobody left to pay it.
  18. victor672
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    victor672 - November 16, 2012 10:41 am
    KWWL reports about the Bakers Union and it's threats to employees. Is the bottom line that this is another company squeezed to death by greedy unions?

    "Hostess issued a statement late Wednesday saying, "Some of our employees who are on strike have expressed the desire to come back to work, but they have also expressed concern about the $140.00 daily fine the Bakers Union has threatened to impose on employees who cross a picket line. The employees are being misinformed that the fine will be taken out of their paychecks.

    "We want to be clear: Hostess Brands does not provide a payroll deduction for any fine a union may decide to impose on our employees.""
  19. jamiegrinnell
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    jamiegrinnell - November 16, 2012 9:14 am
    I read this while eating my Hostess chocolate donettes. :( My dad gets to lose his job because the bakers said no, while his Teamsters union said yes. Nice.
  20. MrTrip
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    MrTrip - November 16, 2012 9:02 am
    Great job guys! Really stuck it to em! you ruined the lives of 18,000 people.

    So much for that lovely wonderbread smell in Waterloo. Now we can just smell the river.....
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