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Business & Tech
Thu November 15, 2012
Hostess Bakery To Workers: 'Go Back To Work, Or Company Dies'
Hostess company officials told striking workers they had until 5 p.m. Thursday to go back to work, or management would be forced to liquidate the company.
Hostess is famous for its legendary Twinkie, Ding Dong, and Little Debbie Snack Cakes, along with the staple of the 1950s PB&J: Wonder Bread.
After the deadline had passed, officials said in an email it would be Friday morning before there was an announcement.
Meanwhile, a third of the company's 33 plants around the country were not up and running because of the strike. Most plants had some workers who crossed the picket lines and went to work, creating some tension among the workforce.
The Teamsters Union accepted concessions in a new contract while the Bakery, Confectionery, Tobacco Workers, and Grain Millers Union did not.
At the Hostess plant in Lenexa, where 200 people work, there was a rotating picket line. While some Lenexa workers crossed the line to keep their jobs, their striking colleagues said they could not accept further concessions. The striking workers described what they said were dramatic compromises after Hostess first declared bankruptcy in 2004. They'd taken a pay cut, paid $10 to the company each month out of their paychecks, and seen decreases in their pensions . The striking workers said they couldn't afford any more concessions.
The company never gained profitability, and in January of this year it declared bankruptcy a second time.
After contract negotiations with the BCTGM union, management presented a contract with an 8 percent pay cut, and a decrease of about 30 percent in the benefits package. That led workers in Lenexa to walk off the job last week. Thousands of Hostess laborers around the country followed suit.
Hostess spokesman Lance Ignon said the company had no choice but to require the cuts. He said investors, reaching the end of their patience with the unprofitable company, would pull out. The current business model, Ignon said, is unsustainable.
UPDATE 10:00 a.m. Friday, 11/16/12
Hostess announced this morning it would, as promised, close its doors due to the nationwide strike by the bakers union. More than 18,000 workers will lose their jobs, including 200 in the Kansas City area.
In an official statement, the company said the strike had made it impossible for Hostess to climb its way out of bankruptcy.
Read more here.
Business & Tech