Teamsters proposal to restructure bankrupt Hostess

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WASHINGTON (PAI) -- A 2-year pay freeze for workers, cuts and clawbacks in compensation for corporate executives, and a reduction in company contributions to a multi-employer pension plan are among the details of a Teamsters proposal to restructure Hostess Inc., in the firm's latest bankruptcy.

"The Teamsters proposal demands that executives, as well as all stakeholders, actually share equally in the financial sacrifices necessary for Hostess to emerge from bankruptcy instead of paying lip-service to the concept," union Secretary-Treasurer Ken Hall explained.

The proposal is to be presented to a federal bankruptcy court overseeing the firm's latest trip through a sea of red ink, its second in less than a decade.

If they don't, the Teamsters' plan says an impartial arbitrator can declare the unionists' concessions to keep Hostess financially alive "null and void."

The Teamsters represent 7,500 workers at the bankrupt baker, manufacturer of such well-known foods as Twinkies and Hostess Cupcakes. [Several unions represent Hostess workers, including the Bakery workers, Teamsters and Stationary Engineers.] Hall said Hostess management took at least $240 million out of the company before declaring bankruptcy.

"Hostess workers have already sacrificed for this company," he added. "Under management's one-sided proposal, Hostess workers again are the only ones doing the sacrificing. Executives lie and claim labor costs are to blame. But it is incompetence and greed, pure and simple, that put this iconic company in the position it is in today."

Provisions of the union's proposal order Hostess to spend at least certain minimum sums on marketing and advertising.

Other details of the Teamsters' plan, which must be also ratified by the union's Hostess locals, include particulars on membership on the company's board and finance committee, continued product marketing, conditions for use of casual transport drivers, and expenditures after the company comes out of bankruptcy.

If Hostess doesn't meet those goals for two consecutive quarters, the Teamsters may immediately file a grievance with the arbitrator. If the arbitrator rules for the union and Hostess still flunks, the arbitrator can again choose a remedy, "up to and including punitive damages and declaring the union concessions set forth in this agreement null and void."

Teamsters say their proposal is expressly conditioned upon the company's commitment to "equality of sacrifice."

Photo: Hostess Brands Inc., the maker of Twinkies and Wonder Bread, is seeking bankruptcy protection, blaming its pension and medical benefits obligations, increased competition and tough economic conditions. The filing on Wednesday comes just two years after a predecessor company emerged from bankruptcy proceedings. LM Otero/AP

 

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  • Since the current management is the one pushed by the Teamsters the LAST time they bankrupted the company, I don't see much point in listening to their gripes about executive compensation, etc. They're in the process of reaping what they've sown.

    Bottom line? Skip the restructure, dissolve the company, and sell of the assets (including brand names, recipes, etc.) to entities which AREN'T afflicted by "union labor" and are able to use them responsibly.

    Posted by KenM, 04/19/2012 1:57pm (2 years ago)

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