“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” and with these simple yet not so simple words, Hostess CEO Gregory F. Rayburn folded operations and announced the firm had filed for Bankruptcy.
In seeking court permission for its demise, Hostess said it wanted to pay around $1.75 million in incentive bonuses to 19 senior managers during the liquidation. They are asking the Bankruptcy court to approve their plan, which wouldresult in the firing of thousands of employees, to shut down 36 bakeries, 242 depots, 216 retail stores, and 311 hybrid depot- store facilities.
Well, as Hostess said in the court papers, it's ``not a simple matter of turning off the lights and shutting the doors."
It leaves a big question behind. What happens to the 18,500 employees left jobless? In words of the CEO, not much, "Unfortunately, because we are in bankruptcy, there are severe limits on the assistance the (company) can offer you at this time."
Many workers said that employees had given Hostess a series of givebacks and concessions, but business had not improved, and the company kept asking for more.
It basically means, the workers will not be getting either a severance pay or their unused vacation pay.
The job market itself is not that positive right now. As far as food manufacturing industry is concerned, it has not regained jobs lost in the recession. It is in no way capable of absorbing the additional unemployed.
That certainly paints a bleak picture for thousands of employees of Hostess.
They can hope that a buyer will put them back to work. But that, even if it happens, can take a llong time and there is no guarantee that the new boss will offer jobs to the old employees. Most employees who lose their jobs should be eligible for government-provided unemployment benefits. But so, far, that’s about it!