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Hostess mulling Indiana plant closures after walkout

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Hostess Inc. could decide as early as today whether it will close plants the bakery-products company operates in Indiana, a spokesman said Monday morning.

Unionized workers at plants in Indianapolis and Columbus 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 which are members in the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, according to Hostess spokesman Erik Halvorson. The firm employs 288 workers in its Indianapolis bakery, of which 212 are BCTGM members.

Hostess said it would have to consider liquidating the company after the union announced Friday that it had gone on strike.

“No plants have been closed; however, disruption to our production and distribution will force those decisions to be made, probably as soon as today,” Hostess spokesman Halvorson said in an e-mail Monday morning to IBJ.

Representatives with BCTGM Local 372 in Indianapolis could not be immediately reached for comment.

Bakery worker locals at plants honored picket lines and also refused to work, the international union said on its website.

Union members are “crossing picket lines in sufficient numbers to allow normal operations at about half” of the 20 affected plants, Lance Ignon, a Hostess spokesman, said in an e-mailed statement. He said the “strike could lead to closure of some plants if they are not able to produce and deliver product.”

The union said the strike was in response to the “unilateral imposition of a horrendous contract” rejected by 92 percent of the membership. The bakery workers’ union says it represents 5,000 Hostess workers.

Workers from the Teamsters union voted to ratify a new contract with 8-percent wage concessions and 17-percent benefit reductions. The bankruptcy court imposed the same concessions on some members of the bakery workers’ union who voted down the proposed contract.

The bankruptcy court ruled that it had power to impose concessions on bakery workers’ locals where the contract hadn’t expired by its own terms. The union said that workers without a right to strike were nonetheless able to walk out by honoring picket lines from other locals that could strike.

Hostess filed a proposed reorganization plan last month that can’t be implemented without selling some assets or obtaining new financing.

The company previously said the bakery workers voted against the concessionary contract because they were erroneously told there was a white knight ready to buy the company and avoid wage cuts. Ignon said “there is no buyer waiting to purchase the entire company and there never has been.”

Hostess voluntarily received labor concessions in its first Chapter 11 reorganization from both the Teamsters and bakery workers’ unions.

Hostess, based in Irving, Texas, filed under Chapter 11 for a second time in January, listing assets of $982 million against liabilities totaling $1.4 billion. Hotess brand names included Wonder, Hostess, Merita, Dolly Madison, Drake’s and Butternut.

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  • Right to Work State
    This is the way our nation is operating now. Lower wages, fewer benefits is the way all employers are having to go to lower overhead and costs they have to reduce wages and benefits. We might as well get used to it and be happy you have a job.....strike and go on unemployement and food stamps so I go to work at a lower wage and pay taxes to support you? Take your hit and keep a job people!
  • what company is hiring
    looking for a good job
  • maryjane
    really- lets get ready for mass production of recreational marijuana- produce- and distribute
  • Opportunity is knocking
    For someone in that industry to fill a need that will go bye-bye when hostess dies. Start up now or miss the boat later. If you are not part of ownership then you are at the mercy of whomever is. Unions can only do so much. Why didn't the union get someone on the BOD at the last contract? Ironic that the majority of the people buying twinkies, cupcakes, etc. are on welfare. And they will have a need to be met for an "inexpensive" sweet treat.
  • Unions ARE GREAT
    Unions are great, they must be - how else could you get so many people to join together to kill a company and kill their jobs!!! Think for yourselves!!!
  • WhichFootIsTheShoeOn
    It is just a big entity, managment, like the government, asking you wealthy people that have a job to pay a little bit more of YOUR FAIR SHARE. Get back to work and and like it, I’m sure they have a plan much like we voted for the elcetion. Hey when they cut your hours to 30 so they don’t have to pay your healthcare, then you can picket part time along with working part time.
  • dont blame unions
    i worked as a cable contractor and we didnt have a union, as a result new contracts every year that lowered wages,and required more work, they even started back charging 100$ on jobs that one might of made 25$ on. i got out of the industry guys are workin for free almost.a disconnect pays 4$ and it may take a 1/2 hour to do, not including the gas spent and drive time to get to the job.no union no say,companies will work you like china, while the big guys profit
  • Union at Hostess
    Unions were great in their day, they now spend all their money on politics. Stupid! By the way - why would Bakers be hooked into a Union wiht Tobacco - Isn't eating Hostess enough of a bad habit - but using Tobacco too??? Ugh! "Bakery, Confectionary, Tobacco Workers and Grain Millers International" Union,
  • hostess
    If that plant close that would be another hit the eastside and shadland ave
  • crazy
    I can't figure out that if you're able to work and have a job why you can't take a little less in wages and benefits. If management is that bad then sit down and try to find ways to improve it. Just crazy.
  • Help
    Who's Hiring ? In Need of A New Job !!
  • Hmm
    Upper Management took A Big Fat pay increase,Froze employee pay increase took away portions of the healthcare benefits and increased the amount for it. Then decided to take a $1.00 week check.. O by the way they Quit shortly after agreeing to the $1.00 A week salary... Not only are they going to take 8% out from each employee, But We already get $10.00 wage reduction taken out each week per person!that was suppose to help the company out the First time they went threw bankruptcy !Plus they are taking pension money and using it to run the company, which is technically stealing from the employees ! After they stopped paying into it about a year or 2 ago.. Working Conditions Are Deplorable On top of All Of That !!
  • unfortunate ending
    I worked for this company for many years until i could not take the poor management anymore and left ,they have been going in the wrong direction for years, being ran by a bunch of incompetent CEO'S who always got big bonuses whether they made money or not, now I work for another bread company, who treats the employee's right. There loss is our gain. I hope they go under, by the way we are hiring.
    • Why would they need to cut wages and benefits?
      Seriously. What's the problem? I'm pretty sure the price of a 2-pack of Twinkies at the gas station hasn't been going down. Why is there suddenly this great need to slash wages and benefits? Is a previous commenter right about venture capitalist "investors" weighing the company down with debt while they extracted exorbitant management fees? I miss the old days when our country didn't suck; when companies felt an obligation to provide good jobs and we weren't engaged in a neverending race to the bottom.
    • Wondering
      Who the heck "Ronmey" is?
    • Same Refrain
      Whew! I thought for a minute you were going to blame Bush. Glad the Left has moved on....to Ronmey as a scapegoat.
    • Not True Wayne
      Wayne that is not true. The top 4 executives cut their own pay to $1 for the remainder of the year or until they emerge. They need to close poor performing plants and cut wages or they will never be solvent.
      • Private Equity Strikes again
        This is what happens when a terrific brand with loyal workers, has corrupt management that allows private equity vultures in to load up the company with debt so it can extract unearned dividends and management fees while cutting the company to pieces then foisting it onto a bankruptcy court where vendors , bond holders and other creditors get taken to the cleaners along with any union contracts. Bain Capital was one of the founders of this "new" type of LBO where management was paid off instead of the hostile takeovers of the 80s. One of the founders was Romney. Bain is the cornerstone of PE capital today and the country is suffering for it. These workers and the union had nothing to do with the bankruptcy. The high interest payments did. Pay Interest on unneeded debt that was used to pay "Investors" , management that let them in, and PE Capital Management outrageous fees for doing nothing. This isn't a "left " problem or a "Right" problem this is an American problem. We don't produce anything anymore , we just liquidate.
        • The truth.....
          Union workers here have already taken pay cuts. Executive compensation however, tripled and massive bonuses were paid. Remember this Co has declared bankruptcy twice in the last 7 years. The CEO is known for milking dieing companies then liquidating them. This is not an unreasonable workforce.
          • Company can pay management big?
            It is good for the company to close if they can't pay wages. Unions keep business from turning the entire country into a min-wage part-time work force. (Which seems to be my governments objective.) We all get better wages because of the power of some unions. We have no power or vacation, or benefits except those that were first won by unions. Hat or be jealous. Looking at history, without unions, we have rich business owners and working poor. Dupree
          • UNIONS
            This is why the union is such a joke. I think it would be better to have a job with a small pay cut rather than no job at all. Oh, well, anyone making under 40K per year should quit their job anyway, and let Nobama and the tax payers take care of them.
          • Thank goodness for Unions...
            Good thing there is a union in place to cost all of these people their jobs. While it is unfortunate that these employees may have to take lower pay and lesser benefits, so have the majority of Americans. That's life and when things get tough, you batten down the hatches. Now, instead of having less compensation, these people are likely to lose their jobs altogether because of an avoidable outcome. Don't worry though, the union leaders will still get paid. Perhaps Obama can step in and bail them out like the UAW.

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