A small union’s stubbornness in contract talks with Hostess is being blamed  for the shutdown of one of America’s snack food icons, the loss of 18,500 jobs  and much-needed tax revenue from hundreds of plants and shops across the  country.

The privately-held company had reached a deal with the Teamsters, but a  smaller union representing bakery workers refused to agree to concessions,  prompting the mass layoffs and closing down of hundreds of plants, bakeries and  delivery routes. That prompted harsh words from both the company and from  Teamsters officials.

“We deeply regret the necessity of today’s decision, but we do not have the  financial resources to weather an extended nationwide strike,” Chief Executive  Gregory Rayburn said in a statement. “Hostess Brands will move promptly to lay  off most of its 18,500-member workforce and focus on selling its assets to the  highest bidders.”

The company said it will continue to ship out its well-known products until  inventory runs out.

The national strike by members of the Bakery, Confectionary, Tobacco Workers  and Grain Millers International Union (BCTGM) that began last week decimated the  82-year-old company’s ability to produce and deliver products at roughly 12 of  its 33 plants. The company announced earlier in the week that the ax would fall  on Friday if the strikers didn’t get back to work, but the union didn’t blink.  BCTGM President Frank Hurt said Thursday that the crisis was the “result of  nearly a decade of financial and operational mismanagement” and charged  management was scapegoating workers to allow the Wall Street investors who own  Hostess to sell.

Calls seeking comment from Hurt were not returned early Friday.

The Irving, Texas-based company had already reached an agreement on pay and  benefit cuts with its largest union, the International Brotherhood of Teamsters.  On Thursday, Teamsters officials blasted the smaller union for not seeking a “solution” in the process or to engage in negotiations.

“The BCTGM chose a different path, as is their prerogative, to not  substantively look for a solution or engage in the process,” the statement read. “BCTGM members were told there were better solutions than the final offer,  although Judge Drain stated in his decision in bankruptcy court that no such  solutions exist. Without complete information, BCTGM members voted by voice  votes in union halls. The BCTGM reported that over 90 percent rejected the final  offer and three of its units ratified the final offer.”

In a letter to  employees posted on the company’s website, Rayburn said  all employees would eventually lose their jobs, some sooner than others.

“Many people have worked incredibly long and hard to keep this from  happening, but now Hostess Brands has no other alternative than to begin the  process of winding down and preparing for the sale of our iconic brands,”  Rayburn’s letter read. “As you know, for many months the Company has been  working with our unions, lenders and other stakeholders to reach a consensual  resolution to legacy costs and labor contracts. Despite everyone’s considerable  efforts to move Hostess out of its restructuring, when we began implementing the  Company’s last, best and final offer, the Bakers Union chose to stage a  crippling strike.”

Because the company is privately held, its financials were not available. But  has struggled for several years, with some blaming America’s increasing appetite  for healthier fare. The company sought concessions from employees, but instead  got a costly strike that further crippled it, according to officials, who told a  federal bankruptcy court it would lose up to $9.5 million from Nov. 9 to Nov. 19  in lost sales and increased costs. The company has cancelled all orders in  process and said any baked goods currently in transit would be returned to  shippers.

“These losses and other factors, including increased vendor payment terms  contraction, have resulted in a significant weakening of the debtors’ cash  position and, if continued, would soon result in the debtors completely running  out of cash,” the filing read.

Hostess will now sell its popular brands like Ding Dongs, Ho Ho’s and Sno  Balls, along with the closure of 565 distribution centers, 570 bakery outlet  stores and roughly 5,550 delivery routes.

Lenders have agreed to allow Hostess to continue to access $75 million in  financing put in place at the start of the bankruptcy cases to fund the sale and  wind-down process, subject to U.S. Bankruptcy Court approval.

BCTGM workers began striking at some Hostess production facilities without  notifying Teamsters officials on Nov. 9, the Teamsters said.

“This unannounced action put Teamster members in the difficult position of  facing picket lines without knowing their right to honor such a line without  being disciplined,” the statement continued.

Source: Fox News


  1. Nicely done, and a big F* to the union.

    while they sit back in the nice warm offices and receiving paryt of everyday wages fromthe people, they have big mouths and wide shouldres, now you got 20,000 people without a job.

    Well done morons!

  2. Well Done twinkies.

    I promise you the CEO and owners of the company will be fine and they have enough money, and they finally tooka stand and said up yours.

    It should be done more often and the Mafia unions should be dismantled forever. Our cost of living will go down 40%


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