Tuesday, October 14, 2008
There Goes My Childhood :-(
The ending was abrupt: Workers for the company, which shifted its baking and distribution operations to plants in Ohio and Canada in 2006, told workers Friday that operations would cease and cookies would no longer be made as of Monday.
The company cited rising prices for raw materials and fuel, and on Monday filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court for the District of Delaware.
The company that made Mother's cookies at the end was the Archway & Mother's Cake and Cookie Co. of Battle Creek, Mich. It was owned by Catterton Partners, a private-equity firm in Greenwich, Conn., which in 2005 purchased it from an Italian firm, Parmalat Finanziaria, which was plagued by scandals at home.
In 2006, Mother's Cake & Cookie Co. was uprooted from its plant on 81st Avenue in Oakland and relocated. About 230 employees lost their jobs.
According to industry lore, the company was founded in 1914 by a newspaper vendor, N.M. Wheatley, as a one-person shop. It expanded and moved to the 81st Avenue location in 1949.
Mother's later had a series of corporate owners: a Belgian company, Artal B.V., bought it in 1991; it was owned by Specialty Foods Corp. of Illinois in the late 1990s; in 2000, Specialty sold Mother's and Archway Cookies to Parmalat, which in turn sold the combined business to Catterton for an undisclosed sum.
Catterton said in a statement it "took a number of actions to remedy" the company's financial crisis, "but these actions were not sufficient to overcome the losses and return Mother's Cake & Cookie Co. and Archway Cookies LLC to profitability."
One of those efforts was to seek financing. "But, as you know, the credit environment is very difficult now," said Meaghan Repko, a spokeswoman for the owners, in New York.
The owners did not comply with the federal law that requires a 60-day notification of any layoffs and said that was due to "unforeseeable business circumstances." A business uses that language to seek exemption from the act's 60-day notice requirement.
"Having reviewed the options available, the company believes that this (bankruptcy filing) was the only course of action," said Jeff Granger of Focus Management Group in Tampa, Fla., who is expected to be appointed chief restructuring officer of the company.
Sixty people are out of work at the Battle Creek office, and Battle Creek City Attorney Eileen Wicklund said Wednesday that she had advised workers to explore a lawsuit against the company.
"Any loss of employment is a blow for any community," she said.
The company had many drivers, including 60 in Northern California, represented by the Teamsters Union. One of them, Frank Makely, 59, of Fresno, an employee for the past nine years, called the short-notice dismissal "unimaginable."
"The owners came in to get rid of us, to chew us up and spit us out," he said, alleging their intent was to gain a profit by selling assets and neglecting service of trucks and other expenses.
"This is part of the economic crunch, with the CEOs taking the money out and not putting more money into the company," said Makely. "I'm too old to get a driving job. Who would hire me?"
The company response was to refer a reporter to its statement.
E-mail George Raine at firstname.lastname@example.org.
This article appeared on page C - 1 of the San Francisco Chronicle