Monday, Apr 29, 2013, 2:07 pm
New Twinkies Will Have a Missing Ingredient: Union Labor
The new owners of Twinkies snack cakes announced last week they will re-open four shuttered production plants in the coming months, but have no intention of doing business with the labor unions that have represented the workers at those bakeries for generations.
When Hostess went bankrupt in November, prompting headlines like "Who Killed the Twinkie?", management blamed labor for the snack cake's demise, while unions predicted that the company would be chopped up and sold at a profit to speculators who would speedily put the lucrative Twinkie brand back on the shelves. That's just what has happened.
An executive of the new ownership group—private equity firms Metropolous & Co. and Apollo Global Management—announced that production will resume at four, or possibly five, plants purchased from Hostess Brands as part of a $410 million bankruptcy sale earlier this year.
The new company intends to hire about 1,500 workers at sites in Indianapolis, Emporia, Kan., Schiller Park, Ill., and Columbus, Ga., and may reopen a fifth bakery in Los Angeles, according to executive C. Dean Metropolous. Former unionized workers at the bakeries may apply for their old jobs, but no union contracts are in place, nor are any expected to be signed in the foreseeable future, he indicated.
Michael Cramer, executive vice president of Hostess Brands LLC, was more blunt. "We're sure not going to invite the unions in. We don't have to do it," he told NBC News.
Some 18,000 employees at Hostess were thrown out of work in November 2012 when the former owners closed 33 bakeries and related facilities. Most workers were members of the Teamsters, the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) union, or several other unions representing small, widely-dispersed bargaining units. At the time, Hostess managers blamed the closures on a strike by BCTGM members protesting cuts in pay and benefits being imposed by the company. BCTGM, in turn, blamed "nearly a decade of financial and operational mismanagement."
In response to the reopening announcement, BCTGM President David Durkee issued the following statement:
We are extremely disappointed to see negative statements from company executives about the union status of its future employees. Ideally, we would like to see as many of our members hired as possible. We believe their combination of experience, dedication and know-how will give the new owners the chance to get high quality snack cakes back in the marketplace.
The BCTGM remains focused on ensuring that the new Hostess Brands ownership understands that the snack cakes at the center of this new company are inextricably linked to the hands that make them—and have made them for generations. We know that our workers have a critical role to play in protecting and enhancing some of America’s most valuable consumer brands.
We all want the same outcome: that the brands should prosper and endure. This is what the next stage of this saga is all about—implementing a new ownership and manufacturing structure worthy of the brands themselves and America’s manufacturing prowess.
Durkee’s statement appears to reflect disappointment that the new owners of Twinkies, as well as the buyers of other Hostess properties such as Wonder Bread, have turned a deaf ear to his repeated public statements that BCTGM would work with new owners to reestablish the bakeries and re-employ thousands of BCTGM members.
The Metropolous/Apollo combination bought only that part of Hostess directly related to the production of Twinkies and sweet snacks such as Ding Dongs, Ho Hos, Donettes, Zingers and Hostess Cup Cakes. Other parts of the company were split off and sold to other bakery operators. Flowers Foods, for example, bought 20 Hostess bakeries configured for the production of breads and rolls, and Grupo Bimbo bought other plants similarly designed for bread production.
Both Flowers and Grupo Bimbo operate a mixed set of production facilities, some of which are unionized and some of which are non-union. BCTGM spokesperson Corrina Christensen said the union had no comment at this time on the prospects of reaching new union agreements with those other wo companies.
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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