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Largest Union Strikes Hostess Brands

11/09/2012

Members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), the largest union at Hostess Brands, went on strike against the national baker beginning Nov. 9. The union said workers at other Hostess plant locations are honoring picket lines established by striking local unions. More plants may strike or honor the strike in other Hostess locations within the coming days.

“These workers, many of whom have worked at Hostess and its predecessor companies for decades, struck in response to the company's unilateral imposition of a horrendous contract that was rejected by 92 percent of the [BCTGM] union's Hostess members in September,” said a union statement.

In filing its second bankruptcy reorganization plan in recent years, Hostess asked its unions to vote to accept the cuts management said were required to avoid liquidation. But when the BCTGM refused, Hostess got the bankruptcy court last month to force the concessions on it and all unions.

"Hostess Brands is making a mockery of the labor relations system that has been in place for nearly 100 years. Our members are not just striking for themselves, but for all unionized workers across North America who are covered by collective bargaining agreements," said BCTGM International President Frank Hurt.

The contract calls for wage and benefit cuts that amount to 27-32 percent overall, with an 8 percent wage reduction imposed immediately, the union said. The company unilaterally ceased making contributions, required by their union contracts, to the workers' pensions in July 2011. Hostess has also cut health benefits and “eliminated the eight-hour workday.”

Hostess Brands is in bankruptcy for the second time in eight years. “Since the first bankruptcy in 2004, BCTGM members across the country have taken dramatic wage and benefit concessions and watched as 21 Hostess plants were shut down and thousands of jobs lost,” the union said. “At the time of the first bankruptcy, Hostess workers were assured by management that money saved via concessions or plant closings would help make the company stronger, more vibrant, and more competitive.

“Instead, helpless Hostess employees watched as money that was supposed to go toward capital investment, product development, plant improvement and new equipment went to executive bonuses and payouts to the hedge funds that own Hostess Brands. They watched as the company illegally withdrew from all Taft-Hartley pension plans, saving more than $50 million in the first five months. The BCTGM learned that the then-Hostess CEO was to be awarded a 300 percent raise, and at least nine other top executives were to receive raises ranging 35-80 percent.”

The union announcement said members fear the investment firms currently owning Hostess will liquidate the company. “The current CEO, Greg Rayburn, was originally brought on as a consultant because of his expertise in corporate liquidations. He has absolutely no experience running a baking company and the Wall Street investors that own the company have absolutely no interest of rebuilding the baking business,” the union said.

By late Nov. 9, there was no comment from the company on the Hostess web site.

See this timeline of events as reported on FoodProcessing.com:

• Hostess Files For Chapter 11 Again (01/12/2012)
• Hostess Files Bankruptcy Reorganization Plan (10/11/2012)
• Struck Hostess Brands to Liquidate (11/16/2012)
• Hostess, Union To Try Mediation (11/20/2012)
• Hostess Back to Liquidation (11/21/2012)
• Flowers Offers 'Stalking Horse' Bid For Hostess Bread Brands (01/15/2013)
• Hostess Selects Four 'Stalking Horse' Bidders For Assets (02/08/2013)
• All Hostess Assets Sold Off (04/04/2013)