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Hostess, which is in bankruptcy for the second time since 2004 and is now owned by a group of financial firms led by two hedge funds, had issued an ultimatum to striking bakers: Call off the strike by 5:00 p.m. Thursday or the company will be shut down. The strike persisted and the closure was announced Friday morning.
The Hostess Brands shutdown will mean the loss of 18,500 jobs nationwide. Hostess Brands operated 33 bakeries, 565 distribution centers and 570 outlet stores.
"There's no way to soften the fact that this will hurt every Hostess Brands employee," CEO Gregory Rayburn said in a letter to employees. "All Hostess Brands employees will eventually lose their jobs - some sooner than others."
But the problems at Hostess go way beyond the company and its employees.
In fact, they're part of a national issue that undermines the entire U.S. economy.