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Hostess’ fate may be sealed

Pending liquidation threat to affect local thrift store

Workers at the Hostess Brands Inc. thrift store in Fort Wayne were told to stand their ground.

So, even as a 5 p.m. return-to-work company deadline passed Thursday, employees at the 1912 Bluffton Road outlet continued to greet customers and stock shelves – though supply is getting low.

Workers at the thrift store are not union members but still would be out of a job if Hostess follows through with its warning. The company told striking employees that it would liquidate the company if plant operations don’t return to normal staff levels.

There are two Hostess plants in northwest Ohio, in Northwood and Defiance.

The maker of Twinkies, Ding Dongs and Wonder Bread said it will file a motion in U.S. Bankruptcy Court to shutter operations if enough workers don’t return. That would result in the loss of about 18,000 jobs, including 856 Hoosier positions.

“To me, what the union is doing is wrong,” said Bill Karahalios, owner of the Daily Diner in Markle. He drove to Fort Wayne on Thursday because his regular Hostess deliveryman did not have much merchandise. The businessman bought 18 loaves of wheat bread and eight loaves of rye.

“All he had was Texas toast,” Karahalios said. “The union should keep negotiating but send the workers back to work. In this economy, we don’t need more jobs lost.”

In May, Hostess notified the Indiana Department of Workforce Development of potential layoffs as it worked to reorganize through Chapter 11 bankruptcy protection. It employs 17 at the Fort Wayne store.

Hostess, based in Irving, Texas, has already reached a contract agreement with its largest union, the International Brotherhood of Teamsters. But thousands of members in its second-biggest union went on strike late last week after rejecting a contract offer that cut wages and benefits in September. Officials for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union say the company stopped contributing to workers’ pensions last year.

Lance Ignon, a spokesman for Hostess, says production at about a dozen of the company’s 33 plants has been seriously affected by the strike. He said a decision on whether Hostess will have to move to liquidate the company may not come until this morning after it’s had a chance to assess plant operations at the end of Thursday.

Hostess, a privately held company, filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade. The business cited increasing pension and medical costs for employees.

Hostess has argued that workers must make concessions for it to improve its financial position. The company said it will file the motion to liquidate today, with a hearing scheduled for Monday. If the motion is granted, Hostess would begin closing operations as early as Tuesday.

“I’ll starve,” 80-year-old General Electric retiree Katie Schlup said. “I shop here all the time, and it’s so convenient for me. I hope something can be done.”

pwyche@jg.net

The Associated Press contributed to this story.

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