Hostess Workers Counter Bankruptcy Court Proposal
NEW YORK (AP) – A union official representing workers at Hostess Brands Inc. said Monday that he isn’t optimistic the two sides will come to an agreement over workers’ contracts before the dispute lands in bankruptcy court.
Irving-based Hostess has said it will ask the court this week to toss its existing union contracts if its unions don’t accept cost-cutting proposals in its “final” offer. The company filed for bankruptcy protection in January, citing rising competition and pension and medical costs.
Ken Hall, general secretary-treasurer of the Teamsters union, says his union’s members will walk off the job if the court throws out the contracts. CEO Greg Rayburn says a strike will force the company to shut down and liquidate.
The unions sent Rayburn a counteroffer Sunday night.
“I don’t think we’ll hear back,” Hall said.
A representative for Rayburn and Hostess, which makes Twinkies, Wonder Bread, Ding Dongs and other popular foods, did not immediately return a call for comment on Monday.
The privately held company’s offer this weekend included reduced pension benefits, work rule changes that the company said would lower its costs and the outsourcing of some delivery work.
The Teamsters said its latest proposal includes concessions worth $150 million a year in addition to $110 million in concessions it made about three years ago. The union said it wants executives to share in the hardship required for the company to emerge from bankruptcy.
“Hostess workers have already sacrificed for this company,” Hall said. “Under management’s one-sided proposal, Hostess workers again are the only ones doing the sacrificing.”
Hostess said last week that eight executives who got raises of up to 80 percent before the company filed for Chapter 11 bankruptcy had agreed to sharp salary cuts. Three other executives who received big pay hikes — including former CEO Brian Driscoll — have left the company.
Hostess’s bankruptcy filing came just three years after its predecessor, Interstate Bakeries, emerged from bankruptcy proceedings.
Hostess has 19,000 employees. All but 3,100 are unionized, meaning Hostess has higher pension and medical benefit costs than competitors with non-union work forces.
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