The Portland Press Herald

Hostess Brands’ latest bankruptcy filing won’t have an immediate impact on its Biddeford bakery, which employes about 370 people, company officials said Wednesday.

Daniel Stevenson, the city’s economic develoment director, said he met Wednesday morning with Joe Cabral, the manager of human resources at the Biddeford bakery. According to Stevenson, Cabral said that Texas-based Hostess Brands has the money to continue operating after filing for Chapter 11, which is designed to allow a company to reorganize its debt and operations and then emerge from bankruptcy protection.

Stevenson said Hostess Brands has no immediate plans for any changes in the workforce in Biddeford, at least in short run, Cabral told him.

The bakery is Biddeford’s fourth-largest employer, after Southern Maine Medical Center, the city of Biddeford and the University of New England, Stevenson said. He said the company pays $548,000 annually in property taxes.

The Biddeford bakery is Hostess Brands’ only bakery in New England. The company also operates three outlet stores in the state.

Stevenson said Cabral told him that the Biddeford bakery, which has been open about 10 years, is among the most productive that the company operates.

The company, then known as Interstate Bakeries, filed for a Chapter 11 bankruptcy in 2004, finally emerging from court in 2009 as Hostess Brands. The company said Wednesday that its previous attempt at “incremental change,” including the first period in bankruptcy court, was insufficient to solve its financial problems.

“The company’s cost structure left it poorly positioned to respond to a worsening economy, increased competition and consolidation in the industry that has given other bakery companies major economies of scale and workforce advantages,” Hostess Brands said in a prepared statement.

The company also said it has $75 million in financing to stay in operation as it begins bankruptcy proceedings.

Hostess Brands makes products such as Twinkies, Wonder bread and Drake’s baked goods.

In its statement, Hostess Brands said that it will start proceedings that could allow a bankruptcy judge to throw out the company’s labor contracts, but also said it will continue to negotiate to try to modify those contracts.

The company blames the contracts for its inability to compete with other bakeries. It said the cost of pensions and medical benefits, along with “restrictive work rules,” are the primary reasons for the bankruptcy filing.


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