Operations / Industry News

Hostess Bakeries will close if offer isn’t accepted

If the court approves its motion to impose a new collective bargaining agreement, but the bakers union strikes, Hostess Brands, Irving, Texas, will rapidly close its operations and begin the process of selling all of its assets, said CEO Gregory Rayburn after he told the U.S. Bankruptcy Court in southern New York in written testimony that acceptance of the company's offer is "the last chance to preserve our reorganization prospects and over 18,000 jobs."

The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union turned down the company's demands for union wage and pension concessions. If the union doesn't accept the offer, or workers strike, plants will close, Rayburn says.

If that happens, the company "suspects" it likely won't reopen, Rayburn adds. "For those that do (reopen), it is unlikely that new owners will provide union jobs," he says. "However, if our BCT-represented employees remain on the job, Hostess will have the ability to exit Chapter 11, revive its operations and continue providing jobs."

A "misinformation campaign" prompted the bakers union to reject the company's proposal to keep the financially troubled company afloat, Rayburn said in his written testimony.

Hostess filed for Chapter 11 bankruptcy protection in January. The company filed a motion Jan. 25 seeking authority to reject collective bargaining agreements with its two biggest unions, BCT and the International Brotherhood of Teamsters. The Teamsters, representing 7,500 of Hostess' 18,500 workers, voted to accept the offer, but the bakers union turned it down. The BCT local voted 39-1 later to reject the company's latest demands for concessions.

Rayburn says the union's leadership "wrote several letters to its membership that mischaracterized key elements of the proposal," assuring members "that a buyer was waiting in the wings to purchase some or all of the Debtors' bakeries as going concerns."

No buyer has stepped forward, Rayburn told the court. The company won the legal right last week to force the union to accept a proposed contract after its members overwhelmingly voted to reject it. Hostess will reportedly impose a new contract on the union soon, according to sources, despite growing signs that workers are prepared to launch a crippling strike.

Source: wefcourier.com, www.nypost.com

Did you enjoy this article? Click here to subscribe to Snack Food & Wholesale Bakery Magazine 

You must login or register in order to post a comment.



Image Galleries

Blue Diamond Almonds Facility

Blue Diamond Almond’s new  processing facility in Turlock, CA.

11/7/13 2:00 pm EST

Food Plant of the Future: The Future of Wastewater Management

Available On-Demand Effective management of wastewater is becoming increasingly critical to food and beverage processors as the cost for incoming water increases...

Snack Food & Wholesale Bakery Magazine

Cover Image

2014 August

This month's publication of Snack Food & Wholesale Bakery takes a special look at Blue Diamond's growers and advanced technology, as well as a tour through the Blue Diamond production plant in Turlock, CA.

Table Of Contents Subscribe

School Lunches

Millions of children will soon be returning to school, lunchboxes in hand. What was your favorite lunchbox treat when you were a kid?
View Results Poll Archive


Organic Production and Food Quality: A Down to Earth Analysis

Effects of Organic Production on Food Quality is the first comprehensive book on how organic production methods influence the safety and quality of foods, based on an unbiased assessment of the latest scientific findings.  The title is a 'must-have' for everyone working within the food industry.

More Products

Clear Seas Research

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications,Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

The Weekly Mix

Operations Weekly Logo

Written by Snack Food & Wholesale Bakery editors, our Operations Weekly weekly enewsletter provides bakers and snack food manufacturers with up-to-the-minute news, ideas and industry trends.

Sign up today!


Facebook IconTwitter IconYoutube IconLinkedIn Icon