Unions and Factories and Food manufacturers and Labor and Manufacturing & Technology

Hostess plant closings so far spare Indy, Columbus

November 13, 2012

Hostess Brands Inc., the maker of Wonder bread and Twinkies, said Monday that it is permanently shutting plants in Cincinnati, Seattle and St. Louis because it couldn’t get enough members of its striking bakery workers’ union to cross the picket lines to keep them open.

The company has threatened additional closings but so far hasn’t said that it will shut down its plants in Indianapolis and Columbus, which have joined a nationwide strike against proposed labor contracts that would cut wages 8 percent in the first year of a five-year agreement.

Hostess employs about 875 workers in Indiana, 436 of them members in the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, Hostess spokesman Erik Halvorson said. The firm employs 288 workers in its Indianapolis bakery, 212 of them members of that union.

In a statement, Hostess CEO Gregory Rayburn said: “We will close the entire company if widespread strikes cripple our business,”

The strike affects 23 of Hostess’ 36 plants, the company said. Half the affected plants are operating, the company said.

The company can’t continue operating with so many affected plants, Rayburn said. Hostess is “days away” from having to shut down entirely, he said.

The bakery workers’ union went on strike at some locations, including Indianapolis and Columbus, in reaction to what the union called the “unilateral imposition of a horrendous contract” rejected by 92 percent of the membership.

Drivers represented by the Teamsters Union have ratified a new contract with 8 percent in wage concessions and 17 percent in benefit reductions. The Teamsters are honoring the bakery workers’ picket lines at some locations.

Texas-based Hostess said enough union members are crossing the picket lines to allow “full operations” at about half the struck plants.

“Some employees are apparently under the misimpression that if they force Hostess to liquidate, another company will buy our bakeries and offer them employment,"  Rayburn said in his statement.

The industry has “far too much capacity,” Rayburn said. “I believe the leadership of the bakers union knows this fact, but is willing to sacrifice its Hostess employees for the sake of preventing other bakery companies from asking for similar concessions.”

Hostess is making “false claims” in a “desperate attempt to break our members’ solidarity and scare our members into giving up their fight for their pensions, their health insurance, their wages and their families,” bakery union Secretary-Treasurer Dave Durkee said Monday in a statement.

The bakery workers’ union said it represents 5,000 Hostess workers.

Hostess previously said the bakery workers voted against the contract because they were erroneously told there was a white knight ready to buy the company and avoid wage cuts.

“There is no buyer waiting to purchase the entire company and there never has been,” a Hostess spokesman, Lance Ignon, said in an e-mailed statement.

Teamsters officials couldn’t be reached for comment on the strike.
Hostess filed a bankruptcy reorganization plan last month that can’t be implemented without selling some assets or obtaining new financing. Both the Teamsters and the bakery workers’ union made voluntary concessions in the first Chapter 11 reorganization, which began in 2004.

Hostess filed under Chapter 11 for a second time in January, listing assets of $982 million against liabilities totaling $1.43 billion.
 

ADVERTISEMENT

Recent Articles by IBJ Staff and Bloomberg News

Comments powered by Disqus