Hostess Fails To Reach Deal With Union; Liquidation Hearing To Continue

IRVING, TEXAS (AP) - Hostess Brands Inc. lived to die another day.

The maker of Twinkies and Ding Dongs said late Tuesday that it failed to reach an agreement with and its second-biggest union. As a result, the company will continue with a hearing on Wednesday in which a bankruptcy court judge will decide if the company can liquidate.

The talks had come as a surprise after Hostess declared last week it would move to wind down its business and start selling off its assets in bankruptcy court. After making its case to liquidate on Monday, however, the bankruptcy judge hearing the case noted the two sides hadn't yet tried resolving their differences through private mediation. The judge noted that 18,000 jobs were on the line and urged the company and union to try to resolve their differences.

Hostess shut down its three dozen plants late last week, including one in Sacramento, after it said a strike by the union crippled its ability to maintain normal production. The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents about 30 percent of the company's workers, says the company's demise was the result of years of mismanagement, however, and that workers have already given steep concessions over the years.

The company employs more than 200 people at its Arden Way bakery and dozens more throughout the region.