Interstate set to shutter 2 S.F. bakeries

Interstate Bakeries Corp., the bankrupt maker of Hostess Twinkies and Wonder Bread, said it will close two bakeries in San Francisco and combine some routes and discount stores, cutting 650 jobs to counter high costs and declining revenue.

Reducing operations in the northern California region will cost about $16.5 million, the company, based in Kansas City, Mo., said Thursday in a statement.

Interstate Bakeries has announced plans to eliminate about 3,600 jobs, or more than 10 percent of its work force, as part of a plan to eliminate poorly performing units and pare costs. The company filed to restructure under Chapter 11 bankruptcy protection in September, citing rising health-care, pension and other costs and reduced demand for its carbohydrate-rich goods.

"In order to ensure a long and successful future for IBC and to save as many jobs as possible, the company must continue making these difficult decisions," Chief Executive Officer Tony Alvarez II said in the statement.

Shares of Interstate Bakeries, which has Utah operations in Salt Lake City and Ogden, rose 10 cents, or 1.7 percent, to close at $6.10 Thursday in over-the-counter trading. The stock has almost tripled since the bankruptcy filing. Interstate was delisted from the Nasdaq Stock Market in November.

The changes are expected to be completed by Aug. 22, subject to bankruptcy court approval. The company expects to finish reviewing all 10 of its U.S. regions by the end of the year, said Maya Pogoda, of Sitrick & Co., which handles public relations for the company.

Interstate Bakeries has announced bakery closures in New Bedford, Mass., Charlotte and Miami since April. The company had 32,000 employees before it began consolidating operations and cutting jobs.

The company said the bakery closure and consolidation may cause total or partial withdrawal liability in one pension plan covering northern California employees, not to exceed $500,000.

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