Hostess is dead. Long live Hostess. A last minute mediation between bankrupt Hostess Brands and the second largest union at the company, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) failed to produce results, and liquidation resumed last Wednesday, with a number of potential buyers salivating over the company’s assets and iconic brands.
Hostess’ CEO Gregory Rayburn told presiding bankruptcy judge Robert Drain that he needed to lay off the vast majority — 15,000 — of the company’s 18,500 employees and begin the part and parcel sale of the company immediately for maximum return. Rayburn explicitly blamed a last-minute strike following the BCTGM’s refusal to make harsh concessions as responsible for the company’s demise. In fact, the company’s unions had made concessions totaling $110 million in the last Hostess bankruptcy, which began in 2004. This latest request was a race to the bottom — peeling back negotiated wages,
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.