The events of this past week have Sno Balled rather quickly and Suzie Q is still in a state of shock. Teamsters are calling the striking bakery union a bunch of Ding Dongs and Ho Ho’s.
Yes, it is true. The great Twinkie is dead. And, it’s no Wonder. Like so many before it, Twinkie the Kid has died an ignominious death–killed off by yet another union strike.
After many months in bankruptcy, Hostess brands is calling it quits, laying off its nearly 18,000 workers and shutting its doors, after the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) called a surprise strike last Friday, idling most of the company’s operations.
According to the company’s website:
Irving, TX – November 16, 2012 – Hostess Brands Inc. today announced that it is winding down operations and has filed a motion with the U.S. Bankruptcy Court seeking permission to close its business and sell its assets, including its iconic brands and facilities. Bakery operations have been suspended at all plants. Delivery of products will continue and Hostess Brands retail stores will remain open for several days in order to sell already-baked products.
The Board of Directors authorized the wind down of Hostess Brands to preserve and maximize the value of the estate after one of the Company’s largest unions, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), initiated a nationwide strike that crippled the Company’s ability to produce and deliver products at multiple facilities.
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Hostess Brands is unprofitable under its current cost structure, much of which is determined by union wages and pension costs. The offer to the BCTGM included wage, benefit and work rule concessions but also gave Hostess Brands’ 12 unions a 25 percent ownership stake in the company, representation on its Board of Directors and $100 million in reorganized Hostess Brands’ debt.
“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” said Gregory F. Rayburn, chief executive officer. “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.”
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The wind down means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States.
On Thursday, Teamster bosses also made a last-ditch effort to “recommend” a different course of action to the BCTGM, even calling for a secret-ballot vote by BCTGM members (secret-ballots are normally something that are, for the most part, taboo to today’s union bosses):
Today, the Teamsters Union announced its recommendation to the Bakery, Confectionary, Tobacco and Grain Millers International Union (BCTGM) that a vote of its Hostess members by secret ballot should be held to determine if the workers want to continue their strike of the company and force it into liquidation.
On Wednesday, Nov. 14, Hostess Brands indicated that if it couldn’t resume normal operations by 5 p.m. EST on Thursday, Nov. 15 that it would have to begin the liquidation process. Teamster Hostess members and all Hostess employees should know this is not an empty threat or a negotiating tactic, but the certain outcome if members of the BCTGM continue to strike. This is based on conversations with our financial experts, who, because the Teamsters were involved in the legal process, had access to financial information about the company.
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The BCTGM chose a different path, as is their prerogative, to not substantively look for a solution or engage in the process. 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.
On Friday, Nov. 9, the BCTGM began to strike at some Hostess production facilities without notice to the Teamsters despite assurances they would not proceed with job actions without contacting the Teamsters Union. 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 once-mighty Teamsters’ efforts to convince the bakery union to change course failed. As a result, among the nearly 18,000 Hostess employees now out of work, 6700 of those are Teamster members.
In a statement, the Teamsters’ number two man, Ken Hall announced in a statement:
We regret to announce that Hostess Brands Inc. has, as a result of the bakery worker’s strike, filed liquidation papers this morning. The company has ceased production in all facilities and our 6,700 Hostess members will finish deliveries of the remaining products over the next few days. As the company indicated, it is seeking a hearing in bankruptcy court for Monday, Nov. 19 to approve its motion to liquidate.
This isn’t the first time bakery union have helped its members commit hari-kari.
For more than a year, BCTGM has had its members who work for American Crystal Sugar in multiple states locked out of their jobs.
Several years ago, the BCTGM led its members out on another ill-advised strike with disastrous consequences. Like at Hostess, when famed biscotti-maker Stella D’Oro workers struck their employer, the union convinced them they had nothing to worry about. Like Hostess’ 18,000 employees, Stella D’Oro workers also lost their jobs when the company’s Bronx facility closed permanently.
Unfortunately, there are no malpractice laws when it comes to unions and the workers at Hostess are now facing unemployment and a very uncertain future. However, it is not like they weren’t warned.
As has been said before: You can cover a turd with icing and call it a cupcake, but it’s still a turd.
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“Truth isn’t mean. It’s truth.”
Andrew Breitbart (1969-2012)
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