Hold on, folks, but Twinkies may be going away? Oh God, no, not Twinkies. The culprit? What has killed about everything in this country? from overpaid government employees to the auto workers, yes, unions. Hostess filed for bankruptcy, and the unions still haven’t relented. Pretty soon there won’t be anything but unions, government, and taxes. I have to admit, I loved Twinkies when I was a kid (now they taste like plastic). When Twinkies go away, what is there left of value in America? Oh, the shame.
Hostess Shuts 3 Plants
By Rachel Feintzeig | The Wall Street Journal
Three days of labor strikes have prompted Hostess Brands Inc. to close three plants and mull a possible liquidation of the beleaguered baking company.
Hostess, which has been dueling with various labor groups for the past 10 months as it attempts to claw its way out of Chapter 11 bankruptcy protection, is seeing picket lines at about two-thirds of its plants, according to Chief Executive Gregory Rayburn.
The strikes were organized by the Bakery, Confectionery, Tobacco Workers & Grain Millers International Union, whose 5,680 Hostess workers account for about 30% of the company’s total work force.
In September, the union rejected a Hostess proposal that called for deep labor concessions, but a judge later allowed the baking company to force the union to adopt the new collective-bargaining agreement.
The union said on Friday that it was kicking off the strike to protest the “horrendous contract” that Hostess imposed, which features wage cuts and limits workers’ participation in pension plans.
Mr. Rayburn said Monday afternoon that Hostess would be shutting down plants in Seattle, St. Louis and Cincinnati as a result of the work stoppage. The plants produce everything from cakes to Nature’s Pride and Wonder breads, and they employ 627 workers, all of whom will lose their jobs. “We don’t have the manpower to maintain them during the strike,” he said.
He also said that the company didn’t have much more wiggle room in terms of shutting down additional plants and that the next step would probably be a complete shutdown.
Still, the three plant closings don’t necessarily mean that the availability of Twinkies and Wonder Bread will cease just yet in some areas of the country. “In most cases, we’ll be able to ship products into those territories from other plants,” Mr. Rayburn said Monday morning, adding that members of the company’s largest union, the Teamsters, would get the baked goods where they need to go.
But it isn’t clear whether the Teamsters will continue to cooperate. Over the weekend, many Teamsters crossed the picket lines, according to both Mr. Rayburn and Ken Hall, the Teamsters secretary-treasurer. But Mr. Hall said Monday that his union is still trying to gather more details about the strike and to sort through the contract provisions that specify what actions various Teamster locals can take when another Hostess labor group goes on strike.
Mr. Hall said he is sure his members will honor the picket lines if it is determined that such a move is sanctioned under their contracts. The Teamsters represent about 7,500 of Hostess’s 18,300 employees.
Hostess filed for Chapter 11 protection in January, saying it couldn’t survive without labor cost cutting. It has long warned that a strike would spell the end of the baking company.
“This is not a situation that…we can withstand for any significant amount of time,” Mr. Rayburn said.
If the strike continues, he added, the company will have to forgo the reorganization proposal that was slated for an initial round of approval later this month and instead initiate wind-down proceedings.
“I think the timeline for us to have to make that determination is very short,” he said. “We’re talking days, not weeks.”
Frank Hurt, the bakers union president, said he’s well aware of the possibility of a liquidation, but he stressed that “people will only take so much” when it comes to cuts to their wages and benefits. On Monday, he took aim at the labor offer that 92% of voting Hostess union workers rejected in September. “It’s just way, way over the top,” he said in an interview. “It was an untenable proposal for our people.”
The union’s website indicates that workers at Hostess facilities from Knoxville, Tenn., to Sacramento, Calif., are honoring picket lines. Mr. Hurt said that the union aimed to eventually start picket lines at a plant in New Jersey, but other than that it doesn’t expect further expansion of the strike.
Mr. Rayburn said that the bakers union hasn’t made any specific demands of Hostess and that the two parties aren’t engaged in negotiations. He added that the company has “zero” tolerance for revamping the terms of its new labor deal, which the Teamsters narrowly voted to accept in September.
A few other, smaller unions threw their support behind the deal as well, while some smaller unions followed the bakers union and resisted.