Last January, Hostess Brands, the company that built such iconic lunch-bag stuffers as Twinkies, Ding Dongs and Wonder Bread filed for bankruptcy. In an era of greater competition and a more health conscious public, Hostess' problems stem, in part, to the heavy costs its union contracts have placed on the company. Now, as the company and union leaders have hammered out tentative contracts that would save the company $200 million--and save 18,500 jobs--the company's fate is in the hands of its union employees.
Hostess Chief Executive Gregory Rayburn last week told Dow Jones that the iconic maker of Wonder bread and Ho Hos will shut down its operations and sell off its brands, plants and other assets immediately if members of the two biggest unions don't ratify the new contracts. At Tuesday's court hearing, Hostess attorney Heather Lennox stressed that the company's future is still hanging in the balance.
The officers of the two primary unions involved, the Teamsters and the Bakery, Confec-tionery and Tobacco Workers have given their members the right to vote on the offers, a move University of California, Berkeley, Prof. Harley Shaiken, says unions are usually reluctant to do.
"They're giving it to the workers and essentially saying, 'Look, this is likely the best we can do."
Unfortunately, while the Teamsters' leaders have stayed neutral while putting it to a vote, it appears the bosses at the bakers' union are not.
Via the New York Post:
With the new, lower-cost contracts in hand, Hostess would have an easier time getting its reorganization plan approved, saving the company.
The Teamsters, like the bakers union, which together represent 17,000 Hostess workers, will start counting votes on the contract proposal as soon as tomorrow, sources said.
The bakers union locals each act independently. In a voice vote, 24 of 25 plants so far have rejected the proposed pact, sources said.
Voting in that manner, a source said, shows that the Bakery leadership is interested in rallying the troops against the deal. “Once I knew it was a voice vote, I knew they were going to reject.”
The proposed labor pact calls for an 8 percent first-year salary and commission cut, sources said.
Bakery union President Frank Hurt has come out against the proposal.
“I would never sign this piece of crap,” he wrote in a union publication a few weeks back, speaking of the Hostess labor proposal. [Emphasis added.]
If the bakers' union membership does, in fact, vote to kill Hostess (and their own jobs), at least it should make Michelle Obama happy since, to her, obesity is the nation's greatest national security risk.
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Cross-posted on LaborUnionReport.com