As Hostess Brands Inc. plans its bankruptcy restructuring, three of the company’s Valley outlet stores face potential closure, a move that may affect some 65 local workers. The maker of classic baked goods Twinkie and Ding Dongs this month served nearly 19,000 employees nationwide with WARN (Worker Adjustment and Retraining Notification) notices, signaling possible layoffs and closures that could take place as soon as July. Hostess has outlet stores in Camarillo, Glendale and Chatsworth, which combined employ about 65 employees. Gilda Villa, 56, has worked at the Hostess Bakery Outlet in Chatsworth for 22 years. She said she has not been told whether the facility will close or remain open. Customers are constantly inquiring about the fate of the shop, which has been a mainstay in the Valley for years, she said. “Customers don’t want us to close,” Villa said. “They hate what’s going on.” Management at the Camarillo store declined to comment and calls made to the Glendale outlet were not returned. The announcement of possible layoffs come just months after the company’s January filing for Chapter 11 relief, listing a debt of $850 million. “The notices were sent to alert employees that a sale or wind-down of the company is possible in the future,” said Erik Halvorson, a Hostess spokesperson in a prepared statement. “However, our goal is still to emerge from bankruptcy as a growing company with a strong future. We are simply fulfilling our requirements by sending these notices.” In an effort to cut costs, Hostess attempted to modify its contracts with Teamsters and bakers unions, proposing reduced pension benefits, changes in work rules and the outsourcing of some of its delivery work. In a May 4 letter to the Texas Workforce Commission, Hostess officials said liquidation or layoffs would occur in the event of several instances, including receiving “an unsatisfactory resolution to it spending motion before the bankruptcy court regarding certain modifications to its collective bargaining agreements with the Bakers and/or the Teamsters.” On May 15, U.S. Bankruptcy Judge Robert Drain denied Hostess’s motion to reject all Teamster labor contracts. “We told our Hostess members all along that we would vigorously oppose the imposition of unjust working conditions since Hostess first filed bankruptcy and we have done just that,” said Teamsters General Secretary-Treasurer Ken Hall in a prepared statement. “It’s a rare day when a bankruptcy judge denies a company’s request to reject its union contracts, and I attribute it to the resolve of our members and the team we assembled to fight the company’s 1113 motion.” Hall said while the union was pleased with the ruling, “it doesn’t solve Hostess’s problems.” Founded in 1930, Hostess — formerly Interstate Bakeries Corp. — first made a name for itself by introducing the Twinkie, the popular cream-filled cake snack. Since then, the company has grown its portfolio to include sweets such as Ding Dongs and Ho Hos and bread brands Wonder and Nature’s Pride. Harry Balzer, chief industry analyst and vice president of New York-based market research firm, The NPD Group, said while the snack food category continues to be a vital part of consumers eating habits, brands must continue to be contemporary in order to compete. “There’s a lot of competition with a lot of people trying to capture our attention,” Balzer said. In recent years, the food industry has shifted as more consumers are opting for healthier food options. Classic white bread, which Hostess’s Wonder bread brand is known for, has plunged in popularity as 36 percent of consumers reported eating it in their homes last year, compared to the 54 percent in 2000. In an April interview with the Huffington Post, Hostess CEO Gregory F. Rayburn said high pension and labor costs were the culprits in the company’s financial crunch and that there continues to be a market for Twinkies, Ho Hos and Ding Dongs. This positive outlook is what employees such as Villa are clinging to amid the uncertainty. Having worked for the Chatsworth shop for more than two decades, she said she has no plans or options for future employment. “I’m 56 years old,” Villa said. “Trying to get a job is almost impossible.”
