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Hostess Employee Union Contesting Bankruptcy

 

Hostess Brands, iconic maker of Twinkies is in a heated battle with the Teamsters union regarding their bankruptcy filing. The employee union, which represents 7500 Hostess employees, has had trouble coming up with a feasible contract agreement with the famous bakery that had to file bankruptcy under Chapter 11. The union is complaining that the maker of Twinkies, Ding Dongs and Wonder Bread is not offering any concessions for their employees. Hostess, on the other hand, believes the union is part of the cause of them filing bankruptcy because of unsustainable labor and pension costs.

Next Tuesday, the bankruptcy attorney representing Hostess and representatives for the Teamsters will square off in bankruptcy court to try and force the iconic brand back to the bargaining table. If Hostess wins the bankruptcy court ruling, the company would be able to void their current labor agreements.

The vice president for the Teamsters, Ken Hall, said the Hostess employees that are represented by the Teamsters voted a majority to authorize a strike. He also stated that this strike could happen very soon if they weren’t ruled upon favorably by the bankruptcy court. The CEO for Hostess, Gregory Rayburn stated that a strike by the Teamsters or any other employee union would put the company under, forcing them to file Chapter 7 bankruptcy and close.

“Hostess will be forced to liquidate if there were a strike by either of its largest unions because its lenders would pull their financing,” Rayburn said. “That’s why the company has tried to reach a consensual agreement with its unions that would lower the cost of its union pension and health plans while still providing employees with good, industry-standard benefits.”

Previously, both sides have not been able to reach any kind of agreement outside of bankruptcy. Both sides are fighting saying the other side is acting unreasonable. Hostess is continuing to dig their heels in only offering deep pension cuts and the Teamsters countered with a concession that amounted to a reduction in $150 million annually.

Hopefully, the icon will be able to emerge from filing bankruptcy and continue on making Twinkies, Ding Dongs and Wonder Bread for years to come.

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