Workers await word as Hostess weighs whether to liquidate

Workers await word as Hostess weighs whether to liquidate

Chris Pruitt, center, a striking Hostess employee from the Peoria, Ill. plant, joins workers outside of a Hostess Plant in Schiller Park, Ill., on Thursday, November 15, 2012. | Andrew A. Nelles~Sun-Times Media

The makers of Twinkies, CupCakes and Ding Dongs went to bed Thursday unsure how long they would be baking the iconic snack-cakes.

Some bakers are on strike and Hostess Brands Inc. has warned striking employees that it would move to liquidate the company if plant operations don’t return to normal levels by Thursday evening. But the company said it won’t announce its decision until Friday.

Hostess, which also makes Wonder Bread, said it would file a motion in U.S. Bankruptcy Court to shutter operations if enough workers didn’t return by 4 p.m. Thursdsay. The move would result in the loss of about 18,000 jobs.

On Thursday evening at the home of the Twinkie in Schiller Park, about 30 bakers honoring the strike huddled outside of the plant where 297 workers bake Twinkies, CupCakes, HoHos and Honey Buns. The group, which was not officially on strike but was supporting striking colleagues, spoke quietly among themslves — without signs or chants. At 4 p.m. — deadline time — a worker from inside the bakery came out and handed checks to the bakers standing outside.

One worker hollered “my last check,” and another said “I’m on vacation next week.”

Though the mood was light — there were no protest signs or chants — workers were concerned about their fate.

“We hope the union and the company come to a concensus,” said Hakim Archer, a dough mixer in the HoHo production line in Schiller Park who has worked for the company for 15 years. “It’s kind of scary. You’ve wasted half your life — we’ve got our pension tied up in this.”

But one man, who declined to give his name but said he’d been with the company 26 years, said “This ain’t the only place to work.”

Most of the people standing in solidarity said they were told by union officials not to speak to the media.

In the Chicago area, Hostess also has a bakery in Hodgkins, where 325 workers make Beefsteak, Butternut, Home Pride, Nature’s Pride and Wonder breads. Those workers also are not on strike.

The local union president did not respond to requests for comment.

Hostess, based in Irving, Texas, has already reached a contract agreement with its largest union, the International Brotherhood of Teamsters. But thousands of members in its second-biggest union went on strike late last week after rejecting a contract offer that cut wages and benefits in September. Some 18,000 workers would lose their jobs if the company were liquidated.

Officials for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union say the company stopped contributing to workers’ pensions last year.

The Teamsters urged the smaller union to hold a secret ballot on whether to continue striking. 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.

Tom Becker, a spokesman for Hostess, said the company would likely make an announcement Friday after assessing plant operations Thursday evening. Production at about a dozen of its 33 plants has been seriously affected by the strike.

Hostess, a privately held company, 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. Hostess has argued that workers must make concessions for it to exit bankruptcy and improve its financial position.

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

While social media lit up with comments from people bemoaning the death of Twinkies and other favorite treats, if the company liquidates, the recipes, intellectual property, and other assets, would likely be sold.

“I hear people say they’re worried about losing the Twinkie,” Archer said. “I didn’t (know) people like Twinkies like they do.”

Source : http://www.suntimes.com