Also: P&G Nearly Doubling Layoff Projections; TI To Cut 5% of Workforce; and more
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
|Company||Address||City||State||Closure or Layoff||Layoff Number||Impact Date|
|Joie De Vivre Hospitality (Hotel Durant)||2600 Durant Ave.||Berkeley||CA||Layoff||79||12/21/2012|
|NBC Universal Media||3000 W. Alameda Ave.||Burbank||CA||Layoff||50||12/31/2012|
|Technicolor Creative Services||2255 N. Ontario St., Suite 300||Burbank||CA||Closure||60||12/17/2012|
|Walt Disney Pictures||500 S. Buena Vista St.||Burbank||CA||Layoff||67||12/1/2012|
|Rome Research Corp.||18000 E. Perimeter Road||Camp Roberts||CA||Layoff||56||12/31/2012|
|Carewise Health (Landacorp Division Of Shps)||500 Orient St., Suite 110||Chico||CA||Closure||88||12/31/2012|
|Parsec||17225 E. Arenth Ave.||City of Industry||CA||Closure||44||12/31/2012|
|Wells Fargo||1220 Concord Ave.||Concord||CA||Layoff||57||12/30/2012|
|Ralphs Grocery||9091 Garfield||Fountain Valley||CA||Layoff||51||12/9/2012|
|Renaissance Doors & Windows||2452 W. Commonwealth Ave.||Fullerton||CA||Closure||78||12/4/2012|
|Corix Utilities||11752 Markon Drive||Garden Grove||CA||Closure||33||12/20/2012|
|NBTY Acquisition LLC||7366 Orangewood||Garden Grove||CA||Layoff||44||12/19/2012|
|Caterpillar Logistics||25972 Eden Landing Road||Hayward||CA||Closure||10||12/14/2012|
|Southern California Edison ||18 Centerpointe Drive||La Palma||CA||Layoff||17||12/31/2012|
|Cricket Communications||1100 Glendon Ave., Suite 1900||Los Angeles||CA||Layoff||15||12/9/2012|
|Deluxe Laboratories||1377 N. Serrano Ave.||Los Angeles||CA||Layoff||55||12/21/2012|
|NBC Universal Media||5750 Wilshire||Los Angeles||CA||Layoff||156||12/31/2012|
|Parsec||750 Lamar St.||Los Angeles||CA||Closure||61||12/31/2012|
|Toyota Central (McCall Automotive)||1600 S. Figueroa||Los Angeles||CA||Closure||130||12/14/2012|
|Bimbo Bakeries||480 S. Vail Ave.||Montebello||CA||Layoff||121||12/31/2012|
|W Silicon Valley Hotel (W Hotel Management)||8200 Gateway Blvd.||Newark||CA||Layoff||68||12/18/2012|
|Philips (Discus Dental)||12121 W. Bluff Creek Drive, Suite 100||Playa Vista||CA||Closure||58||12/31/2012|
|Southern California Edison||5000 Pacific Coast Highway||San Clemente||CA||Layoff||90||12/14/2012|
|Abercrombie & Fitch||90 Horton Plaza||San Diego||CA||Closure||66||12/29/2012|
|Cricket Communications||5887 Copley Drive||San Diego||CA||Layoff||49||12/9/2012|
|Bigpoint||500 Howard St., Suite 300||San Francisco||CA||Layoff||47||12/22/2012|
|Janssen Alzheimer||700 Gateway Blvd.||South San Francisco||CA||Layoff||119||12/21/2012|
|Bimbo Bakeries (Earthgrains Baking Cos.)||2651 S. Airport Way||Stockton||CA||Closure||125||12/29/2012|
|Stockton Sportservice||248 W. Fremont St.||Stockton||CA||Closure||86||12/9/2012|
|W&F Manufacturing||10635 Keswick St.||Sun Valley||CA||Closure||28||12/7/2012|
|St. Jude Medical||15900 Valley View Court||Sylmar||CA||Layoff||114||12/31/2012|
|NBC Universal Media||100 Universal City Plaza||Universal City||CA||Layoff||74||12/31/2012|
|NBTY Acquisition LLC||27655-B North Avenue Hopkins||Valencia||CA||Closure||68||12/19/2012|
|Corix Utilities||6941 W. Goshen||Visalia||CA||Closure||45||12/20/2012|
|Citygrid Media||8833 W. Sunset Blvd.||West Hollywood||CA||Layoff||80||12/9/2012|
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