Back in September, following acceptance by the Teamsters. the bakers’ union (BCTGM) at bankrupt Hostess brands—makers of the iconic Twinkies, Ding Dongs and Wonder brand breads—rejected a company proposal to help keep the company in business. By a voice vote of its members, the union opened the door to conduct a company-killing strike and potentially putting 18,500 Hostess workers onto the streets.
Well, on Friday, the bakers’ union called its members on strike nationwide. Now the job cuts begin.
Hostess Brands permanently closed three bakeries Monday, including a plant in St. Louis where 365 jobs were cut, in response to a bakers’ union strike that started Friday.
The bankrupt maker of Twinkies and Wonder bread said it’s trying to avert liquidating the entire company, and it shuttered three plants that were no longer able to produce and deliver products because of picket lines. The other plant closures are in Seattle and Cincinnati, where a combined 262 jobs were cut.
“We deeply regret this decision, but we have repeatedly explained that we will close facilities that are no longer able to produce and deliver products because of a work stoppage — and that we will close the entire company if widespread strikes cripple our business,” Hostess CEO Gregory Rayburn said in a statement.
Unfortunately, it appears the only thing the union’s game of chicken will accomplish is the putting of union members onto the unemployment lines once they realize their facilities are closed–permanently.
“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. “The fact is, the bakery industry already has far too much capacity, and there is a strong risk that many of our facilities may never operate as bakeries again once they are closed. 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.”
Rayburn continued: “That hardest part of the decision to close any facility is knowing that it will result in the loss of jobs for those Hostess Brands employees who did not support the strike and who wanted to help revive the Company,” Mr. Rayburn said. “They didn’t ask for these strikes, but they are paying a terrible price for them.”
The bakers’ union seems to have chosen a course of action that so many other union bosses have chosen for the last several decades: Suicidal strikes to preserve wages and benefits that are unsustainable in a competitive market.
The Teamsters, the other union at Hostess, has alerted its members that they may soon be unemployed:
Teamster members at Hostess need to be prepared for the likely outcome of a Hostess liquidation should the strikes continue. We have said it consistently throughout the process that Hostess could not survive any serious labor disruption. That opinion was formed based on extensive financial and legal review by our expert financial and restructuring advisors[sic] (some of the same advisors that worked on President Obama’s Auto Task Force to save GM and Chrysler) over the past 16 months.
It’s unclear whether the goal of the Bakers strike is to force Hostess to negotiate or just put Hostess out of business. In interviews Hostess claims BCTGM leaders have not returned calls for many weeks. In addition, Teamster Leaders were not informed by the BCTGM of its actions that began on Friday
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