Is This Guy Nuts or What? ... More on Hostess and Twinkies

Hostess and Twinkies will begin the liquidation process shortly.

That's been announced by the company CEO. And Teamsters union officials have accepted the company's decison and its logic as well. As for the bakers' union leadership, well, the Teamsters aren't happy with them. Neither is the Hostess CEO. Probably not many bakers' union members either. But all that's old news by now.

So what does bakers' union President Hurt have to say? Plenty, even though it makes no sense. Well, at least he's consistent in that regard. He hasn't said anything yet that's made any sense, so why start now?

Apparently the bakers' union President is still living in some kind of fantasy world, however, as he expects a new buyer to swoop in and give back to bakers' union members their jobs. and probably at a greater rate of pay and benefits than Hostess was willing to pay. Who is he kidding? Hasn't he screwed things up enough already?

In any event, the saga keeps unfolding and if the entire ugly and sad situation weren't so tragic for all 18,500 of the Hostess employees, the bakers' union leader's comments would almost be comical. As it is, they're tragic.

Hostess Union Clings to Hope has the breaking news:

 

Shoppers lined up at a Hostess outlet on Saturday in Victorville, Calif.

"The union that brought the 85-year-old baker of Twinkies and Wonder Bread to its knees is holding out hope that a buyer will salvage chunks of the company and send the union's members back to work, even as Hostess Brands Inc. gears up for a fire sale.

Hostess, the company behind treats snacked on for generations, is poised on Monday to present to a federal bankruptcy judge a plan to shut down 36 plants and sell off the company's business. The liquidation was sparked by a nationwide strike orchestrated by the snack maker's second-largest union, the Bakery, Confectionery, Tobacco Workers and Grain Millers.

While Hostess has said the shutdown would result in the loss of more than 18,000 jobs and place the fate of more than 30 American brands in jeopardy, union President Frank Hurt said he believed there was "more than a good chance" that a buyer quickly would swoop in to buy the profitable parts of the company and give his union's members their jobs back.

"I'm not in a position to promise anybody anything, but I'm in a position to be hopeful," he said Sunday."


{NOTE: This guy sounds like a nut to me. However, he's actually the bakers' union President. No kidding. In any event, he has done a tremendous disservice to all Hostess employees, and especially his own union members. Let's hope he knows something positive about a new buyer that will be announced shortly, but I personally believe what he's spreading is a crock of you know what.

If there's a buyer in the wings, that's great. But there's absolutely no reason to believe that's the case. In fact, there's every reason to believe that the parts will be sold for what they can get, beginning with the many great brand names owned by the company such as Twinkies, Ho Ho and Wonder Bread.}


 

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Now let's return to the somewhat incredible story.

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"Mr. Hurt, whose union counts 5,600 Hostess employees as members, said he was comforted by the recent frenzy over Hostess products, as consumers rushed to stock up after Friday's announcement of the shutdown. "People are going crazy because they think they're not going to be able to get any Twinkies or Ho Hos or Wonder Bread," he said. "They'll be produced somewhere, some time and by our members."

Hostess Chief Executive Gregory Rayburn had a different vision of how the bankruptcy auction process would play out.

"Nobody wants to have anything to do with these old plants or these unions or these contracts," Mr. Rayburn said in an interview. The company had hunted for buyers for the last several years as it tried to avoid a second trip into bankruptcy, but no buyer came forward.

Liquidation firm Great American Group Inc. and C. Dean Metropoulos & Co., the owner of beer brands including Pabst Blue Ribbon, have signaled interest in Hostess's brands. But Mr. Rayburn said potential buyers have made clear that their interest partly is because a liquidated Hostess would be free of its collective-bargaining agreements.

"People are excited about the brands today, but I don't know how you connect the dots" to get to a full rebirth of the company, he said, especially one that incorporates the union members who had struck. "That's beyond wishful thinking. That, to me, is just misguided." Mr. Rayburn said he expected a buyer might pick a few of Hostess's plants.

He expressed doubt that a buyer would rehire a substantial portion of unionized workers, especially not on better terms than Hostess offered. The company's last proposal included an 8% wage cut in the first year, a 17% increase in employee health-care costs and changes to workers' pension plans that could have reduced payouts. Hostess long had said it couldn't survive without cutting labor costs.

But Mr. Hurt, of the bakers' union, said a buyer could be spurred to offer a better deal after seeing the bakers' negative reaction to Hostess's proposal. The vast majority of voting bakers' union members, 92%, rejected the new collective-bargaining proposal in September.

The company's biggest union, the Teamsters, narrowly voted to accept that deal. The chasm between the bakers and the Teamsters has only grown wider in the past week as the bakers began striking at two-thirds of Hostess plants. On Thursday the Teamsters called on the bakers to hold a vote on whether to continue striking.

Mr. Hurt said some Teamsters had crossed the bakers' picket lines to get to work.

But Ken Hall, the Teamsters' treasurer and general secretary, said his members largely honored the picket lines.

"I know that apparently the baker workers' union believes that there's some real hope that someone's going to come in and buy up the bakeries and continue to operate them," Mr. Hall said Friday. "Our view is that this is going to be a fire sale."

He said his team "switched gears" from trying to preserve all 18,000 Hostess jobs, a prospect he viewed as "off the table," and instead was trying to drum up buyers for "bits and pieces" of the business. He said he hoped that some Teamsters might be able to return to the baking industry, either at Hostess or at competitors. But against the backdrop of the weak economy, he said he didn't see a place for all 6,700 Teamsters from Hostess.

"I don't really feel betrayed" by the bakery workers, said Teamster Luigi Peruzzi, a Hostess driver in Detroit for 25 years. "I think they made a terrible choice based solely on terrible information from their leadership."

The 48-year-old, who has worked continuously since he was 16, said he hoped a new owner would rehire him but was pessimistic. "Right now," he said, "I'm scared to death" about supporting his family of five."

SUMMING UP

What a strange world the president of the bakers' union inhabits.

I'd say Teamster driver Peruzzi has it figured right. The bakers' union president has supplied his members with terrible information in the past.

And now he's apparently doing it again.

Meanwhile, we'll stay tuned and report on anything further on anything related to this bizarre story that is worth reporting.

Perhaps the sanity of bakers' union President Hurt and his sickening "spin machine" will be a source of future news. Just kidding. Or am I?

Thanks. Bob.