About 90 Hostess employees, most of them delivery route drivers, are losing their jobs in eastern Nebraska, western Iowa and Sioux Falls, S.D., some of the 18,000 out of work nationwide in the wake of the Hostess Brands bankruptcy and shutdown.
The workers, including about 43 in Omaha, are “very disheartened” about losing their jobs delivering baked goods like Twinkies and Wonder Bread to grocery and convenience stores, restaurants and schools, said Kim Quick, president of Teamsters Local Union 554 in Omaha.
The union is working with state departments of labor to help the workers access new job opportunities. Cathy Lang, Nebraska commissioner of labor, said meetings are taking place this week to give the workers information about re-employment and retraining opportunities and unemployment benefits.
Thirty-nine worked out of a warehouse at 10606 S. 144th St. Others were based in other Omaha locations as well as in Lincoln, Norfolk, Neb., Sioux Falls, S.D., and Atlantic, Spencer and Sioux City, Iowa.
No local Hostess workers are represented by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, whose strike was cited by company executives as the cause of its decision to shut down. Hostess was able to reach a contract agreement with the Teamsters, its largest union.
“The employees had taken many concessions in order to keep this company in business,” Quick said.
A week after the bakers union strike began Nov. 9, Hostess announced its plans to liquidate.
The company's demise came after years of management turmoil, with workers saying the company failed to invest in updating its products. In January, Hostess filed for its second Chapter 11 bankruptcy in less than a decade, citing steep costs associated with its unionized workforce.
Hostess stopped contributing to its union pension plans more than a year ago, and the Associated Press reported that in court Thursday, an attorney for Hostess said the company is no longer able to pay retiree benefits, which come to about $1.1 million a month.
No Hostess products were baked in Nebraska, Quick said. The workers delivered products made in Lenexa, Kan., and Waterloo, Iowa.
Quick said some of the workers had been with Hostess for more than 30 years. Others were new and hadn't yet joined the union, but Quick said they would be helped, too.
“This was a good job for these employees for many, many years and it provided a good income for many families. It's sad to see it come to an end.”
He said the workers will qualify for 26 weeks of unemployment benefits and will be looking for new jobs in the meantime.
The employees will be assisted through the Nebraska Department of Labor's Rapid Response program, which works with companies going through sizable layoffs to help workers transition to new jobs.
Quick said some employees may want to take community college classes to train for a different line of work or to pick up computer skills.
“We're going to do everything possible to help these Teamsters, to help these people, because they are good employees,” he said. “We're optimistic about their future. As we told the members, there's better days ahead.”
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As Hostess closing gets final OK, buyers line up for brands
Hostess Brands Inc., the maker of Twinkies and Wonder Bread, won final court approval to sell its assets and eliminate about 18,000 jobs in a liquidation that an adviser said has drawn “fast and furious” interest from potential buyers.
U.S. Bankruptcy Judge Robert Drain, at a hearing Thursday in White Plains, N.Y., approved Hostess' requests to shut down and to pay as much as $1.83 million in incentives to 19 senior managers, while overruling objections to the bonuses.
The sale process should “move quickly,” Drain said. He gave interim approval to the wind-down plan Nov. 21.
Hostess is in active talks on asset sales with 110 parties, financial adviser Joshua Scherer of Perella Weinberg Partners LP told Drain. It's “like drinking from a fire hose,” he said.
Some of the would-be buyers are “large companies” with recognizable names, and some have hired investment bankers and are performing due diligence, evaluating company data, he said.
Scherer said last week that Hostess' asset sales may generate about $1 billion. The company was valued at $450 million in 2011, David Rush, the baker's interim treasurer, told Drain. The 2011 estimate needs re-evaluation partly because of the interest shown by potential buyers of the bankrupt company's intellectual property and brands, Rush said.
The company's decision to liquidate followed a weeklong strike by its bakery workers' union that began after Drain imposed contract concessions opposed by more than 90 percent of the union's members.
--- Bloomberg News