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Facility Closures & Downsizings: Hostess Wind-Down a Wind-Up for Other Bakeries

Also: P&G Nearly Doubling Layoff Projections; TI To Cut 5% of Workforce; and more
November 27, 2012
After winning bankruptcy court approval to close down its business, Hostess Brands began the process of shuttering its 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores resulting in the loss of 18,500 jobs.


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Among other provisions, the court order provides Hostess Brands with added liquidity through an amended debtor-in-possession financing agreement and consensual use of cash collateral; and authorizes the company to implement a non-executive employee retention plan to ensure the company has the necessary personnel to wind down its operations.

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” said Gregory F. Rayburn, chief executive officer. “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”

In addition to dozens of baking and distribution facilities around the country, Hostess Brands will sell its popular brands. Bidders have already started to emerge. This week, Cookies & Sweets Bakeries with headquarters in Pine Bluff, AR, filed a motion with the courts to buy Hostess Brands. The bakery said it would take itself public in December, which would allow it to offer employee stock options and it would set up a new headquarters in Detroit to run the business.

Another potential buyer could be Flowers Foods Inc. Moody’s Investors Service said a liquidation of Hostess would be credit positive for Flowers Foods because the fresh bakery company would likely purchase some of Hostess’ bakery assets, which would allow it to accelerate its expansion in the northern United States.

Flowers recently stepped up its acquisition activity to accelerate expansion beyond its core territories in the U.S. South. The company expects acquisitions to generate 2%-5% of its annual sales growth. Last March, the company raised $400 million in senior unsecured notes partly to fund acquisitions. In July, Flowers completed the acquisition of Lepage Bakeries Inc., an Auburn, ME-based regional producer of breads, rolls, and donuts, for $370 million. The acquisition was Flowers’ largest to date, and completed its US east coast distribution coverage through Maine.

Hostess Plant Status


Birmingham, AL: Closed
Anchorage, AK: Closed
Los Angeles, CA (Hostess): Closed
Los Angeles, CA (Dolly): Closed
Oakland, CA: Closed
Sacramento, CA: Closed
Denver, CO: Closed
Jacksonville, FL: Closed
Orlando, FL: Closed
Columbus, GA: Closed
Hodgkins, IL: Closed
Peoria, IL: Closed
Schiller Park, IL: Closed
Columbus, IN: Closed
Indianapolis, IN: Closed
Waterloo, IA: Closed
Emporia, KS: Closed
Lenexa, KS: Closed
Alexandria, LA: Closed
Biddeford, ME: Closed
Boonville, MO: Closed
St. Louis, MO: Closed
Billings, MT: Closed
Henderson, NV: Closed
Wayne, NJ: Closed
Rocky Mount, NC: Closed
Cincinnati, OH: Closed
Defiance, OH: Closed
Northwood, OH: Closed
Tulsa, OK: Closed
Philadelphia, PA: Closed
Knoxville, TN: Closed
Memphis, TN: Closed
Ogden, UT: Closed
Salt Lake City, UT: Closed
Seattle, WA: Closed


P&G Nearly Doubling Layoff Projections


Procter & Gamble reiterated its plans to shave about $6 billion from its cost of goods sold, $1 billion from marketing efficiencies and $3 billion from core selling, general and administrative (SG&A) overhead costs. In doing so, it upped the number of job positions it plans to eliminate.

Earlier this year, Cincinnati-based P&G said it was targeting non-manufacturing employment reductions of 5,700 positions by the end of fiscal year 2013.

Now, P&G is upping the layoff number an additional 2% to 4% per year through fiscal years 2014 to 2016 to strengthen its ability to achieve its savings objectives. That would amount to additional job reductions of from 2,280 to 4,560 positions.


TI To Cut 5% of Workforce


Texas Instruments (TI) plans to reduce costs and focus investments in its wireless business on embedded markets with greater potential for sustainable growth. Cost reductions include the elimination of about 1,700 jobs worldwide. The layoffs amount to about 5% of the Dallas-based firm’s total workforce.

TI estimates that these actions will be substantially complete by the end of 2013. Total charges for these actions are estimated to be about $325 million.

As a result of these actions, TI expects annualized savings of about $450 million by the end of 2013.


Facility Closures & Downsizings




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CompanyAddressCityStateClosure or LayoffLayoff NumberImpact Date

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Joie De Vivre Hospitality (Hotel Durant)2600 Durant Ave.BerkeleyCALayoff7912/21/2012

.

NBC Universal Media3000 W. Alameda Ave.BurbankCALayoff5012/31/2012

.

Technicolor Creative Services2255 N. Ontario St., Suite 300BurbankCAClosure6012/17/2012

.

Walt Disney Pictures500 S. Buena Vista St.BurbankCALayoff6712/1/2012

.

Rome Research Corp.18000 E. Perimeter RoadCamp RobertsCALayoff5612/31/2012

.

Carewise Health (Landacorp Division Of Shps)500 Orient St., Suite 110ChicoCAClosure8812/31/2012

.

Parsec17225 E. Arenth Ave.City of IndustryCAClosure4412/31/2012

.

Wells Fargo1220 Concord Ave.ConcordCALayoff5712/30/2012

.

Ralphs Grocery9091 GarfieldFountain ValleyCALayoff5112/9/2012

.

Renaissance Doors & Windows2452 W. Commonwealth Ave.FullertonCAClosure7812/4/2012

.

Corix Utilities11752 Markon DriveGarden GroveCAClosure3312/20/2012

.

NBTY Acquisition LLC7366 OrangewoodGarden GroveCALayoff4412/19/2012

.

Caterpillar Logistics25972 Eden Landing RoadHaywardCAClosure1012/14/2012

.

Southern California Edison 18 Centerpointe DriveLa PalmaCALayoff1712/31/2012

.

Cricket Communications1100 Glendon Ave., Suite 1900Los AngelesCALayoff1512/9/2012

.

Deluxe Laboratories1377 N. Serrano Ave.Los AngelesCALayoff5512/21/2012

.

NBC Universal Media5750 WilshireLos AngelesCALayoff15612/31/2012

.

Parsec750 Lamar St.Los AngelesCAClosure6112/31/2012

.

Toyota Central (McCall Automotive)1600 S. FigueroaLos AngelesCAClosure13012/14/2012

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Bimbo Bakeries480 S. Vail Ave.MontebelloCALayoff12112/31/2012

.

W Silicon Valley Hotel (W Hotel Management)8200 Gateway Blvd.NewarkCALayoff6812/18/2012

.

Philips (Discus Dental)12121 W. Bluff Creek Drive, Suite 100Playa VistaCAClosure5812/31/2012

.

Southern California Edison5000 Pacific Coast HighwaySan ClementeCALayoff9012/14/2012

.

Abercrombie & Fitch90 Horton PlazaSan DiegoCAClosure6612/29/2012

.

Cricket Communications5887 Copley DriveSan DiegoCALayoff4912/9/2012

.

Bigpoint500 Howard St., Suite 300San FranciscoCALayoff4712/22/2012

.

Janssen Alzheimer700 Gateway Blvd.South San FranciscoCALayoff11912/21/2012

.

Bimbo Bakeries (Earthgrains Baking Cos.)2651 S. Airport WayStocktonCAClosure12512/29/2012

.

Stockton Sportservice248 W. Fremont St.StocktonCAClosure8612/9/2012

.

W&F Manufacturing10635 Keswick St.Sun ValleyCAClosure2812/7/2012

.

St. Jude Medical15900 Valley View CourtSylmarCALayoff11412/31/2012

.

NBC Universal Media100 Universal City PlazaUniversal CityCALayoff7412/31/2012

.

NBTY Acquisition LLC27655-B North Avenue HopkinsValenciaCAClosure6812/19/2012

.

Corix Utilities6941 W. GoshenVisaliaCAClosure4512/20/2012

.

Citygrid Media8833 W. Sunset Blvd.West HollywoodCALayoff8012/9/2012



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