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post #1 of 19 Old 11-16-12, 18:04 Thread Starter
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Thumbs down Hostess to close lay off 18,500 after crippling union fight

Hostess to close, lay off 18,500 after 'crippling' union fight | Fox News

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 just before the holiday season 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.

Marty Zimmerman, secretary-treasurer for BCTGM Local 85, told Fox40 from a Sacramento picket line early Friday that workers had been at “wits end” with Hostess brass.

“Well, the mindset is we’re standing strong, absolutely,” Zimmerman told the station. “I mean, they’ve taken our pensions away, we’ve had seven CEOs in the last 10 years; this company has been so mismanaged. Really, we’re at our wits end and enough is enough”

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.
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post #2 of 19 Old 11-16-12, 18:10
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Wrong section.

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post #3 of 19 Old 11-16-12, 18:20 Thread Starter
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I am sorry I thought general forum would be sufficent
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post #4 of 19 Old 11-16-12, 19:10
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post #5 of 19 Old 11-16-12, 20:57
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The guy from zombie land would be so pissed
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post #6 of 19 Old 11-16-12, 21:13
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The executives for the company gave themselves huge raises. The CEO went from $750,000 a year to $2,500,000. Nine others got raises around $400,000 or so. Yet, they raided the employee pension fund and demanded an 8% pay cut for the rank and file. They blame things on the "union." Welcome to American labor in the 21st century...

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post #7 of 19 Old 11-16-12, 22:35
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But according to the article, even the Teamsters union blamed the other union (BCTGM) for holding a strike without notifying the Teamsters (leaving the teamsters workers not knowing if they were required to honor the picket line or not) and said that the BCTGM refused to negotiate when the Teamsters DID come to an agreement. Based on the article and what the Teamsters were saying, the BCTGM was driving them into the ground.

As for the CEO, I don't know how much longer he had planned to work, but if he stayed for 10 years (assuming no new raises or bonuses) he would have made 7,500,000. Instead he walks out with 2,500,000. It looks to me like even management would have been better off staying open and they had a proposal that would allow them to stay open. One union worked with them, one union didn't

In another article on this, I read
"Kenneth McGregor, a shipper for Hostess in East Windsor, Conn., arrived at the plant Friday morning and said he was told he was laid off immediately.

He blamed the bakery workers union for rejecting a proposed contract.

"They screwed us big time," he said."
So it looks like the employees are blaming the union also

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post #8 of 19 Old 11-16-12, 22:57
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Originally Posted by Moeman View Post
I am sorry I thought general forum would be sufficent
Um, no. This has nothing to do with Daytona 675's or Street Triples.
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post #9 of 19 Old 11-16-12, 23:33
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I almost want to engage in this...

However, I will refrain. This is a motorcycle forum. Plenty of politics forums on the net.

Mods, please delete this thread.

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post #10 of 19 Old 11-24-12, 16:19
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Originally Posted by Ranger Jay View Post
The executives for the company gave themselves huge raises. The CEO went from $750,000 a year to $2,500,000. Nine others got raises around $400,000 or so. Yet, they raided the employee pension fund and demanded an 8% pay cut for the rank and file. They blame things on the "union." Welcome to American labor in the 21st century...

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