Business

Ding Dong, are Twinkies dead?

Posted November 15, 2012

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— A Thursday deadline set by Hostess Brands Inc. for striking workers to return to the production lines has passed, but it was unclear whether the company will go through with its threat to go out of business and begin liquidating its assets.

The Texas-based maker of Twinkies and Ding Dongs says a nationwide strike by its bakers union has affected production at about a dozen of its 36 plants. Officials said they would make an announcement Friday morning on whether the company would continue production or begin selling off assets next Tuesday.

Thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike last week  to protest 8 percent wage cuts and benefits concessions. Officials say the company stopped contributing to workers' pension last year, and the union rejected the company's contract offer in September.

Workers at a Rocky Mount plant that makes Wonder and Merita bread and Hostess snacks and desserts have been honoring picket lines set up by workers from other Hostess plants. Workers cannot legally strike until the company puts in place pay and benefits concessions at the plant where they work, which would be Sunday for the Rocky Mount workers.

"If we go back to work, we lost," union representative Dave Hoffman said. "We did all we can do and all we're going to do."

Still, Hoffman conceded, continuing the strike will not garner a win for Hostess employees.

"Either way, they know they are going to lose," he said. "They are going to either lose their job or they are going to have to go back in there and lose their pension."

Hostess has already reached a contract agreement with its largest union, the International Brotherhood of Teamsters. Citing its financial experts who had access to the company's books, the Teamsters say that Hostess' warning of liquidation is "not an empty threat or a negotiating tactic" but a certain outcome if workers continue striking.

Deadline comes and goes, Hostess strike persists Deadline comes and goes, Hostess strike persists

The Teamsters urged the smaller bakers union to hold a secret ballot on whether to continue striking, noting that the strike put its union members in the "horrible position" of deciding whether to cross picket lines.

Hostess announced Monday that it would close bakeries in Seattle, St. Louis and Cincinnati, but officials said Thursday that the company's financial picture continues to deteriorate, leaving them with no choice but to shut down completely if the strike continues.

"If we can't lower our costs so that we become profitable again, we have to shut the doors," said Hostess spokesman Lance Ignon. "We are very concerned a lot of these jobs will vanish forever if the company is forced to liquidate."

The company has about 18,300 employees, including about 275 in Rocky Mount.

"We're not in the dark. We know exactly what's going to happen," Hoffman said, "They're going to shut the plant. They're going to shut down all the (plants in the) United States."

Hostess strike Hostess workers would rather be unemployed than take wage, benefits cuts

Workers said they were hopeful that another company would buy Hostess and negotiate with them on a new contract.

Privately held Hostess filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade. The company cited increasing pension and medical costs for employees as one of the drivers behind its latest filing, and it argued that workers must make concessions for it to exit bankruptcy and improve its financial position.

Managers at the Rocky Mount plant went out to workers Thursday to hand out what is likely their last paycheck.

"I feel like they took enough, and it's over with," said Michael Lyons, who has worked for Hostess for 36 years. "We've got to do what we've got to do. We put up with it long enough."

The company, which was founded in 1930 and also makes Dolly Madison, Drake's and Nature's Pride snacks, is fighting battles beyond labor costs, however. Competition is increasing in the snack space and Americans are increasingly conscious about healthy eating.

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  • driverkid3 Nov 16, 2:15 p.m.

    storchheim::::Now that the safety net is in place, and we have essentially free education and training for anyone who wants it

    No, it is NOT free, someone is paying for it somewhere. I don't understand how it's so easy for some to forget that.

  • driverkid3 Nov 16, 2:10 p.m.

    ryderted::::It means working 80 hours a week for peanuts with no healthcare or benefits and little care for worker safety. You know like our great, great, great grandfathers did.

    I worked public jobs from the late 60's to 1998, rest of my work time was on farms. Never, EVER have I worked a job with a union controlling things. I was never mistreated by any boss except for one time, and he got a pastrami sandwich, funyums and soda thrown in his face for that. I STILL made great money on that job and would be doing it now if I could. Unions have absolutely NOTHING to offer me.

  • itsyoureternalsoul Nov 16, 2:05 p.m.

    When you have not worked in six months, you hope for death. I am noticing RM does not have a chicken plant you can work in.

  • driverkid3 Nov 16, 12:30 p.m.

    TJPC::::cut the workers pay by 8% and cut their benefits by almost 20%. What are they supposed to do? Say thank you and continue to work? Is that really what YOU would do in the same situation.

    I'd go to work and keep the job in order to put food on the table. This is just stupid all the way around. If I had a business and was looking to hire people, these folks would NOT be people I would hire. Some of you act like the people that own the business have no right to earn a profit. They DO. The people that worked here gave up jobs that a lot of people would love to have just to be able to eat and pay some bills. I wonder what was going through their minds when they agreed to this.

  • Katupatree Nov 16, 11:31 a.m.

    Uh, I don't think one can collect unemployment if you are out of work because of a strike. One of the downsides of a union. Used to be the Union would pay workers a small stipend but I doubt that is happening any more. But what other weapon do workers have?
    Besides do you really think Welfare, Food Stamps, Medicaid, Medicare, and Social Security ran up the national debt?
    And Medicare and Social Security are not "entitlement programs", they are earned benefits. If you are old enough to work, you are paying into it. I know its a precarious situation for younger workers, and that's not right, but if you've worked 40 years, you've earned it.

  • seenbetterdaze Nov 16, 10:39 a.m.

    How long do these people think they can collect Unemployment checks when America is at the very edge of the Debt cliff? The Rats in the Fed. Gov. have overspent to the point of Complete Economic Crash/Failure/Bankruptcy. Elections have consequences and we are about to find out the hard way. Class warfare, TAX the RICH, is just plain DUMB...if Obam took every cent from the Rich, it would not last 3 months. The Actual DEBT of the USA today is hundreds of TRILLIONS of dollars in UN Funded entitlements, such as Unemployment, Welfare,Food Stmps, Social Security, Medicare, Medicaid, and now Obamacare.

  • superman Nov 16, 10:20 a.m.

    Their items have gotten so expensive I dont buy them anymore. There is no much difference in the taste of bread. I am very comfortable with the store brand. Sometimes it is wise to be thankful for what you have and not worry about what you dont have. The plant will close and they will have nothing. That has become the American way. If they cant have what they want they prefer to having nothing.

  • rocket Nov 16, 10:17 a.m.

    Socialism is not business friendly.

  • pedsrndad Nov 16, 10:14 a.m.

    So the Union won the battle over not allowing its members to work without a wage/benefit package that suited them but lost the war and jobs for many of its members? Who won in this scenario? Nobody! Thanks Union, from all the newly unemployed. This message courtesy of a non-union employed person.

  • tarheelfan41 Nov 16, 9:25 a.m.

    Grupo Bmbo or another baking conglomerate will buy them. Twinkies and Wonder Bread have high brand recognition and are worth serious money.joeBob
    Do you think they'll purchase the union contract? Hire the same employees at the new company? Employee the same number that lost their jobs?

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