The Teamsters Union submitted its own proposal to take the company out of bankruptcy – responding to a ‘final offer’ of pension cuts put forward by company executives on Saturday.
Hostess Brands has said it intends to ask the court to allow it to scrap union contracts and force employees to accept cost-cutting measures, including a 75% reduction in its annual pension contributions. The maker of Wonder Bread, Twinkies, and other snack cakes filed for Chapter 11 bankruptcy in January, citing pension and medical benefit obligations, restrictive work rules, a continuing difficult economic climate, and a more difficult competitive landscape.
It said at that time that it would seek to reach an agreement with unions over labor agreements, as employee costs had squeezed the company, in addition to higher ingredient prices, and a more competitive US bakery sector.
However, unions, including the Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), have blamed “ineffective executives” for the company’s problems, especially after recent allegations from creditors that top executives may have received pay rises of up to 80% in the months prior to the bankruptcy filing.
Hostess Brands has since said some executives have agreed to take $1 salaries until the company comes out of bankruptcy or December 31, whichever comes first.
“The looting and the games being played by Hostess executives give me zero confidence that they want to join us in saving this company,” said Teamsters general secretary-treasurer Ken Hall.
Hall said: “The Teamsters’ proposal demands that executives, as well as all stakeholders, actually share equally in the financial sacrifices necessary for Hostess to emerge from bankruptcy instead of paying lip-service to the concept.
“Hostess workers have already sacrificed for this company. Under management’s one-sided proposal, Hostess workers again are the only ones doing the sacrificing.”
The Teamsters Union’s proposal includes “tentative” concessions of $150m a year, including suspending pensions until next year. It says workers already made concessions valued at $110m three years ago.
The Teamsters Union’s proposal is available online here.
EDIT: Immediately after publication on Tuesday, a union spokesperson told FoodNavigator-USA that they still had not had a response from the company about the proposal.