Friday, November 16, 2012

RIP Hostess...

Three days of labor strikes have prompted Hostess Brands Inc. to close three plants and mull a possible liquidation of the beleaguered baking company.
Hostess, which has been dueling with various labor groups for the past 10 months as it attempts to claw its way out of Chapter 11 bankruptcy protection, is seeing picket lines at about two-thirds of its plants, according to Chief Executive Gregory Rayburn.
The strikes were organized by the Bakery, Confectionery, Tobacco Workers & Grain Millers International Union, whose 5,680 Hostess workers account for about 30% of the company's total work force.
In September, the union rejected a Hostess proposal that called for deep labor concessions, but a judge later allowed the baking company to force the union to adopt the new collective-bargaining agreement.
The union said on Friday that it was kicking off the strike to protest the "horrendous contract" that Hostess imposed, which features wage cuts and limits workers' participation in pension plans.
Mr. Rayburn said Monday afternoon that Hostess would be shutting down plants in Seattle, St. Louis and Cincinnati as a result of the work stoppage. The plants produce everything from cakes to Nature's Pride and Wonder breads, and they employ 627 workers, all of whom will lose their jobs. "We don't have the manpower to maintain them during the strike," he said.
He also said that the company didn't have much more wiggle room in terms of shutting down additional plants and that the next step would probably be a complete shutdown.

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