Breaking News ... Hostess and Bakers Union Fail to Agree ... Hostess Will Now Almost Certainly Proceed to Liquidation

Hostess Plans to Liquidate After Mediation Fails has this breaking news:

"Hostess Brands Inc. said Tuesday night that mediation talks with its bakers union failed and the company will proceed with plans to close down and sell its assets.

The company, which has already shuttered its plants and sent its workers home, will push ahead with its bid to embark on a shutdown that will leave 18,500 people unemployed and its iconic brands in the hands of new owners or gone, a spokesman said Tuesday evening.

Earlier Tuesday, the head of the bakers union whose strike precipitated Hostess liquidation plans didn't attend a last-ditch mediation session and wasn't hopeful about its prospects, he said.

"I'm not too optimistic about this mediation," Frank Hurt, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, said when reached earlier Tuesday afternoon in Columbus, Ohio. He said he couldn't get to New York, where the session was taking place; instead, he said, the union's secretary-treasurer was attending. . . .

Meanwhile, some Hostess workers in another union awaiting the mediation results criticized Mr. Hurt, the 20-year president of the bakers union, who defended his decisions and actions during the company's bankruptcy process.

The judge indicated Monday that if mediation wasn't successful, Hostess could return to court Wednesday to pursue its liquidation plan.

Doug Mansky, a Hostess driver in Detroit and a member of the International Brotherhood of Teamsters, was in the process of moving to a cheaper condominium on Tuesday, after his union had agreed to an 8% pay cut that he said would shave $200 a week from his income. After Judge Drain cleared Hostess to impose the same new labor terms on the bakers union, they went on strike.

"I hope things work out. I'm going to be 49 and trying to find a job in a market that's terrible," Mr. Mansky said.

Scott Quenneville, a Hostess truck driver represented by the Teamsters, said he feels his colleagues were misled by Mr. Hurt into believing that a buyer would swoop in for the company.

Mr. Hurt on Sunday said he thought there was a good chance a buyer would emerge who would give union members their jobs back.

"Frank misled a lot of people. He was not going to settle for anything less than closing the company down, because they didn't want that 8% pay cut," said Mr. Quenneville. "If you don't want the job, leave the job. Why ruin 18,000 jobs?"

"I didn't mislead anybody on anything," Mr. Hurt said. He said he didn't tell workers preparing to strike that a buyer for Hostess was definitely waiting in the wings.

Mr. Hurt said, "I don't want anybody to think that anybody is guaranteeing anyone anything, but we did know that there were people taking a look at this company."

Some financial and corporate buyers have signaled interest in Hostess assets, but it isn't clear if they would want to assume the company's current labor agreements. Hostess's chief executive has said its labor contracts have deterred would-be bidders.

Mr. Hurt has described Hostess's labor proposal, which called for an 8% pay cut in the first year and smaller cuts in subsequent years, as well as various pension modifications, as "outrageous" and said the bakers union would no longer "take any abuse" after previous givebacks.

John Price, a bakers union representative and former Hostess worker, said Mr. Hurt is well liked among the ranks. "He took this offer and gave it to the members to vote on," Mr. Price said."

SUMMING UP

It sure looks like the proverbial fat lady is getting ready to sing at Hostess.

Hostess officials will now ask the bankruptcy judge to allow them to proceed to liquidation of the company.

And on top of all the lousy union representation by bakers union president Hurt over the last several weeks and months, he didn't even show up at today's mediation attempt.

What a complete and total idiot!

After tomorrow's bankruptcy hearing, we'll have more to say as we learn more details.

For now let's just say it doesn't look good for the 18,500 Hostess employees who likely won't be returning to work.

And we can give all the credit for that sad outcome to bakers union president Hurt.

Thanks. Bob.