Hostess Brands' Contract Offer: Let Them Eat Twinkies

The seven-month standoff between the bankrupt Hostess Brands, Inc. and the union workers that drive their trucks and bake their Twinkies is about to come to an end, and it isn’t looking good for workers. Hostess, who filed for Chapter 11 Bankruptcy in January, sent a letter out to workers Monday putting forth a final offer to the Teamsters, the largest union at Hostess. The offer releases Hostess from millions of dollars in pension obligations, and if approved, will result in eight percent wage cuts within one year.

Frank Hurt, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers union (BCTGM), the second-largest labor organization at Hostess after the Teamsters, expresses justified anger at the offer. He tells In These Times: “I would never sign this piece of crap. They keep giving us new proposals and each one is even worse than the last.”

Hurt’s union has a particularly weak hand in negotiations. In These Times goes on to report:

Company lawyers have convinced federal bankruptcy Judge Robert Drain to grant a so-called Section 1113 motion against the union, which allows the company to unilaterally cancel BCTGM labor agreements and impose whatever conditions it wishes. But the company has decided not to invoke Section 1113 thus far, claiming that it would prefer a negotiated settlement with the union.

A similar company right to cancellation was sought for Teamsters’ contracts, but did not succeed, and Judge Drain is no stranger to using bankruptcy proceedings to pressure unions. (Drain presided over a plan to freeze pensions at GM Supplier Delphi in 2008.)

Hostess says that the Teamsters’ failure to accept the last, best offer could result in the loss of all 17,000 jobs at the company. Teamsters’ Secretary-Treasurer Ken Hall said about the hard bargain: “We recognize there is no desirable choice–this is one of the most difficult circumstances we’ve encountered.”

Mail ballots will be counted September 14.

(Matthew McDermott works at a union-side labor law firm and as a curator for the VIA Music and New Media Festival. His post first appeared on Unionosity and is reposted here with permission.)