Hostess hits workers with ultimatum

hostess

Management at bankrupt Hostess products - maker of Twinkies, cupcakes, Wonder Bread and other baked goods - hit its unions, notably the Teamsters and the Bakery Workers (BCTGM), with a "last, best and final" offer ultimatum on August 16.

If the unions - those two plus the Retail, Wholesale and Department Store Union-didn't accept its "offer," the firm threatened to dump their contracts, as bankruptcy law allows when a firm is "reorganizing." Hostess filed for bankruptcy in January.

Teamsters Secretary-Treasurer Ken Hall, whose union represents 7,500 Hostess workers, flatly denounced the "offer," but said bargainers are sending it to the workers anyway, since rejection could mean loss of their jobs.

"The Teamster Bakery Conference leadership and the leadership of the union believe that you, the Teamster Hostess members, should have the right to determine your future. We are not and cannot endorse the company's final offer," Hall said.

"But given that the likely consequence of rejecting it outright means the loss of your jobs, it is our duty to inform you, to the best of our ability, of what the offer means to you and your livelihoods and to let you vote on your future and the future of Hostess." The union held local meetings of Hostess workers from Aug. 20-26, with mail-in voting on the offer to follow through mid-September.

BCTGM President Frank Hurt had similarly caustic words. In a prior letter to members, he pointed out BCTGM's 5,000 members at Hostess had made numerous concessions in prior years to help keep the mismanaged firm financially afloat, but Hostess still wanted to use the bankruptcy process to dump its BCTGM contracts.

"When Hostess filed for bankruptcy on January 11, it also filed to have union contracts abrogated via a bankruptcy code 1113 procedure," Hurt wrote in that late May open letter. "The company's strategy was to force a concessionary contract upon the members through the bankruptcy court."

Acting on advice from their bankruptcy lawyers, BCTGM did not participate in the trial portion of the bankruptcy process, Hurt added. To do so would cost the union millions and end in a probable loss, since bankruptcy law is tilted against workers.

"BCTGM International decided the best strategy was to control the process, which we feel we have been very successful in doing thus far," he added then. But the firm's "last, best and final offer," stuffed with concessions by the workers, shows the outcome of a bankruptcy proceeding.

Gregory Rayburn, the new company CEO, wrote to all workers on August 8, saying everyone - executives included - would take an 8% pay cut next year, and that workers would also lose money by paying more for health insurance. That includes the Teamsters, the BCTGM members and 500 Hostess workers represented by the Retail, Wholesale and Department Store Union.

His letter also said Hostess would not pay millions of dollars It owes to the union-negotiated pension plans. It stopped paying into the pensions late last year and wouldn't do so for three more years, Rayburn wrote.

"I would never sign this piece of crap," Hurt responded to In These Times. He suspects the Hostess managers want to break the firm up and sell it off, piece by piece, leaving the workers jobless and without union contract protection.

On April 18, Hostess got the federal bankruptcy judge's permission to dump the BCTGM contracts, but Rayburn hasn't used it - yet. If it does, "we will be free to strike," Hurt wrote to his members.

Photo: Clarissa Peterson // CC 2.0

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  • I wonder if the union owning 25% of the company will later on result in a trickle down to employees or if they can distribute shares to employees based on job/salary.

    Posted by Jim, 08/28/2012 8:49pm (2 years ago)

  • My family will be directly affected by the vote. My husbands job is on the line, and we would rather learn to live on 8% less rather than the more than 50% wage loss we will have if he has to go unemployment. Not to mention, if the job loss is result of a strike, our state unemployment will not pay. Talk about a rock and a hard place! The voters need to calm down and think rationally before checking yes or no. Do you want to risk having NO INCOME and NO BENEFITS and look for a job or HAVE AN INCOME, HAVE BENEFITS, and STILL LOOK FOR A NEW JOB? Think with your head; not your emotions!

    Posted by Labor Wife, 08/28/2012 11:27am (2 years ago)

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