Hostess closings to cut 627 jobs

Michael Bourgault (left) and Michael Ducharme, members of the Bakery Union, picketed in Northeast Phila.
Michael Bourgault (left) and Michael Ducharme, members of the Bakery Union, picketed in Northeast Phila. (CLEM MURRAY / Staff)
Posted: November 14, 2012

The world of Twinkies and Wonder Bread threatened to crumble Monday, as a nationwide strike continued and Hostess Brands Inc., the bankrupt owner of the historic products, said it would close three bakeries, eliminating 627 jobs.

The closures in Seattle, St. Louis, and Cincinnati spared Hostess' Northeast Philadelphia bakery, where 330 members of Local 6 of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union stopped working at 12:01 a.m. Saturday to protest wage and benefit cuts approved last month by a bankruptcy judge.

"We're fighting for our pensions, we're fighting for health care, we're fighting for our wages, we're fighting for our way of life," said Barry Fields, president and business manager of Local 6.

In September, 112 of 115 Bakery Union locals, representing 6,600 Hostess workers, rejected a contract proposal that included wage and benefits cuts totaling 27 percent to 32 percent, including immediate 8 percent wage cuts.

Hostess' other main union, the International Brotherhood of Teamsters, ratified similar contract changes in September, according to Hostess. The Teamsters represent an estimated 7,500 Hostess workers, based on data in court documents. Officials at Teamsters Local 463, which represents area Hostess drivers, did not return a call for comment.

The workers picketing the Northeast Philadelphia bakery were not from Local 6, but from Biddeford, Maine, where the Hostess contract had expired. Members of Local 6, who still have a contract in effect, honored that picket line, union officials said.

In all, about 83 percent of Hostess' 18,300 workers are covered by 360 union contracts, a bankruptcy document said. Hostess listed 34 bakeries on its website Monday.

Chief executive Gregory F. Rayburn said he regretted closing bakeries, adding that Hostess has "repeatedly explained that we will close facilities that are no longer able to produce and deliver products because of a work stoppage - and that we will close the entire company if widespread strikes cripple our business."

Robert Oakley, the Bakery Union's international vice president and chief negotiator, said it would be foolish for Hostess to liquidate, noting, "That would be as close to a fire sale as they can get."

Oakley said that he thought that the company could be saved, but that the cuts were too deep this time, given the history of concessions through two bankruptcies. "They angered these people," he said.

A plan orchestrated by private-equity firm Ripplewood Holdings and hedge funds led by Silver Point Capital and Monarch Alternative Capital brought Hostess out of a previous bankruptcy in early 2009 with $670 million in debt.

Losses continued, and the company went back into bankruptcy in January with $861 million in debt. Hostess' equity owners, the largest being Ripplewood, stand to lose 100 percent of the equity investments in a plan submitted to the court last month.


Contact Harold Brubaker at 215-854-4651 or hbrubaker@phillynews.com.

Clem Murray of The Inquirer staff contributed to this article.

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