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Working In These Times

Wednesday, Nov 21, 2012, 4:45 pm

Mediation Fails to Resolve Hostess Strike — Owners Intent on Dissolving the Company

BY Bruce Vail

After its unionized workforce refused to accept crippling concessions, Hostess Brands, the makers of Twinkies, decided to dissolve the company.   ( Christian Cable, Flickr)

A national strike against Hostess Brands, the makers of Twinkies and Wonder Bread, continued today as a last-ditch attempt at mediation failed and the owners of the company moved toward the final shuttering of the company and the elimination of about 18,000 jobs.

A federal bankruptcy judge attempted Tuesday to mediate the strike by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), but no agreement was reached, according to a statement from Hostess Brands. The company said it intended to seek approvals from the court to close down the company permanently. 

Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York agreed to personally mediate the BCTGM strike that began Nov. 9, but his offer came only after Hostess CEO Gregory Raymond announced Nov. 16 that he would close the company for good.  

BCTGM spokesperson Corrina Christensen told Working In These Times that the union would have no immediate comment on the mediation talks. Some 5,000 BCTGM members are still on strike, she said, with active picket lines at many of Hostess’ 33 bakeries.

Meanwhile, new hope arose that the jobs of some Hostess workers might still be saved. The intense publicity around the BCTGM strike has attracted the attention of several potential buyers that might be willing to take over the company and resume operations according to numerous press reports.

Fortune magazine, for example, reported that Florida-based private equity investor Sun Capital Partners is interested to taking control and re-starting bakery production. Other media outlets have reported interest from additional sources, including well-established food producing companies like Pepperidge Farms, Flowers Foods, and Grupo Bimbo. The interest by Sun Capital stands out from the others, however, because it said it hoped to resume operations with Hostess’ existing plant and its unionized work force.

"This interest is a hopeful sign for the future," said Frank Larkin, a spokesman for the International Association of Machinists (IAM).

With about 220 members at Hostess plants scattered throughout the country, the IAM has also been battered by demands for concessions, he said. "We have been supporting the BCTGM strike," Larkin said. "We are honoring their picket lines wherever we see the. We wish them well."

The expressions of interest from potential buyers provides some measure of hope for the long-suffering workers at Hostess. The company has been in financial distress for several years, and filed a Chapter 11 bankruptcy case in Judge Drain’s court earlier this year.

As previously reported in Working In These Times, the current “vulture fund” owners – Silver Point Capital and Monarch Alternative Capital – have relentlessly pounded workers with demands for wage and benefit concessions, while constant threatening to close the company altogether. For months, BCTGM President Frank Hurt has been keeping up a drumbeat of criticism of Silver Point and Monarch, charging that the two vulture funds were manipulating the bankruptcy court process to bust the several unions that represent workers there, and then sell off Hostess assets to the highest bidder.

Bruce Vail is a Baltimore-based freelance writer with decades of experience covering labor and business stories for newspapers, magazines and new media. He was a reporter for Bloomberg BNA's Daily Labor Report, covering collective bargaining issues in a wide range of industries, and a maritime industry reporter and editor for the Journal of Commerce, serving both in the newspaper's New York City headquarters and in the Washington, D.C. bureau.

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