Workforce Fairness Institute

UNION BOSSES TAKE DOWN ICONIC AMERICAN COMPANY
Hostess Most Recent Victim Of Big Labor's Job-Killing Campaign

The Conflict Between The Bakers’ Union And Hostess Goes Back To February 2012 With The Company Warning Labor Bosses Many Times:

In February 2012, The Teamsters Union Said Its Members At Hostess Would Strike If A Judge Approved Hostess Cuts In Health Care And Pensions. “The Teamsters Union said Monday that its members at Wonder Bread and Twinkies maker Hostess Brands Inc. have voted to authorize a strike if a bankruptcy judge approves the company's request to cut their health care and pension benefits.  Local unions representing more than 7,500 Hostess workers held strike authorization votes over the past 10 days.  A majority of members took part in the vote, with over 90 percent of those voting electing to authorize a strike, the union said.” (“Teamsters Members At Hostess Vote To OK A Strike,” The Associated Press, 2/13/12)

  • “Hostess Said In Court Filings That Its Struggles Were Largely Related To Its Heavy Obligations To Union Workers And Retirees. It Also Said Its Competitors Don’t Face The Same Burden.  Hostess Said That In Its Previous Bankruptcy Reorganization, It ‘Did Not Obtain Any Substantial Relief’ From Its Union Obligations.”(“Teamsters Members At Hostess Vote To OK A Strike,” The Associated Press, 2/13/12)

In April 2012, Hostess Made Its Final Offer To The Unions To Avoid Bankruptcy. “The company that makes Twinkies, Wonder bread and Ding Dongs says it’s making a final offer to workers to accept cost-cutting before it asks a bankruptcy court to impose the cuts. Hostess Brands Inc. wants the Teamsters and bakers’ unions to accept reduced pension benefits and changes in work rules to lower costs. It wants to outsource some delivery work.” (David Koenig, “Twinkies Maker Hostess Gives Unions ‘Final’ Offer,” The Associated Press, 4/14/12)

  • “The Company Said Saturday That If The Unions Reject The Offer, It Will Push Ahead With Efforts In Bankruptcy Court To Throw Out The Unions’ Collective Bargaining Agreements.  A Union Official Warned That Could Lead To A Strike.” (David Koenig, “Twinkies Maker Hostess Gives Unions ‘Final’ Offer,” The Associated Press, 4/14/12)

Hostess’ CEO Said They Wanted To Cut Pension Contributions From $103 Million To $25 Million. “The company’s new CEO, Gregory F. Rayburn, said Hostess wants to cut annual pension contributions from $103 million to $25 million.  Hostess also wants to change work rules that sometimes require two trucks instead of one, and to outsource deliveries to small stores.” (David Koenig, “Twinkies Maker Hostess Gives Unions ‘Final’ Offer,” The Associated Press, 4/14/12)

  • The Union Said They Would Reject The Offer. “Ken Hall, general secretary-treasurer of the Teamsters, said the union would reject the company’s proposal and make a counteroffer Sunday.” (David Koenig, “Twinkies Maker Hostess Gives Unions ‘Final’ Offer,” The Associated Press, 4/14/12)

In April 2012, No Deal Was Going To Be Reached. “A deal between bankrupt Hostess Brands and its unions that could rescue the maker of Twinkies and Wonder bread before a crucial trial begins tomorrow is not likely, CEO Gregory Rayburn told The Post.” (Josh Kosman, “No Hope For Hostess Union Deal: CEO,” The New York Post, 4/16/12)

Hostess Said They Could No Longer Afford To Pay For Pensions. “‘As much as 50 cents of every dollar Hostess Brands contributes goes to pay for pensions for people who worked at other companies that no longer exist and who never worked at Hostess Brands, IBC or any other predecessor of [Hostess],’ the company said in its proposal.  ‘Unfortunately, we can no longer afford to carry the pension costs of former competitors who have long since closed their doors and disappeared.’” (Josh Kosman, “No Hope For Hostess Union Deal: CEO,” The New York Post, 4/16/12)

In September 2012, The Bakers’ Union Rejected The Restructuring Plan That Would Have Saved Hostess; Teamsters Union Agreed To This Plan. “Hostess bakers soundly rejected a restructuring plan yesterday aimed at saving the bankrupt maker of Wonder Bread and Twinkies.  The move, not unexpected, follows a vote by members of the Teamsters, a second Hostess union, that narrowly approved the proposal that will cut wages and benefits.  The bakers’ union vote leaves the fate of America’s biggest bakery uncertain.” (Josh Kosman, “Bakers Nix Hostess $$,” The New York Post, 9/15/12)

NOTE: In September 2012, The CEO Of Hostess Warned If The Bakers’ Union Did Not Accept The Deal Then Hostess Would Shut Down And 18,000 Jobs Would Be Lost. “Hostess Brands’ CEO told a bankruptcy court that if the bakers union doesn’t ultimately accept its final offer, it will rapidly shut operations down, including those in Waterloo.  ‘If the court approves our motion to impose our new collective bargaining agreement but the bakers’ union strikes, Hostess will rapidly close its operations and begin the process of selling all of its assets,’ CEO Gregory Rayburn said in an emailed statement Thursday after he told the U.S. Bankruptcy Court in Southern New York in written testimony that acceptance of the company’s offer is ‘the last chance to preserve our reorganization prospects and over 18,000 jobs.’” (Jim Offner, “Hostess CEO: Bakeries Will Close If Offer Not Accepted,” McClatchy-Tribune Business News, 9/21/12)

Details Of The Deal Offered By Hostess Seemed Fair To Union Members. “The negotiated take-it-or-leave Hostess deal has its compromises.  Wage compensation would immediately drop 8 percent for everyone, even management, but with the promise of a 3 percent bump the next year of the five-year deal.  There also would be sharp reductions in pension plan payments.  The company moved to reduce executive pay in April, and Chief Executive Gregory Rayburn has said its lawyers, bankers and bankruptcy advisers will forgo $60 million in fees, a discount of about 18 percent.  Union members stand to get a 25 percent equity stake and would be in line for $100 million of the recovered debt, plus two of the company’s eight board slots and one seat on the board’s executive compensation committee.” (Phil Rosenthal, “Choices Not So Sweet For Hostess Brands Workers,” The Chicago Tribune, 10/7/12)

In October 2012, The Hostess CEO Continued To Say The Cuts Were Only Way For Company To Survive And Even The Teamsters Union Accepted Them. “And Rayburn is adamant.  There is no angel buyer waiting in the wings.  There will be no more bargaining.  ‘I think our employees want to keep their jobs.  They understand the position we’re in and that there’s not an option one, option two or option three here,’ Rayburn said.  ‘The Teamsters ... accepted these cuts with the thought that they wanted to hold onto their jobs.  I just hope the message gets through now.’” (Phil Rosenthal, “Choices Not So Sweet For Hostess Brands Workers,” The Chicago Tribune, 10/7/12)

In November 2012, The Bakers’ Union Went On Strike And Hostess Said The Strike Would Force Them To Liquidate The Company. “The tense relationship between Hostess Brands and its second-largest union deteriorated further when the bakers’ union launched a strike against the bankrupt snack maker, beginning Friday.  A news release issued late Friday by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union called the move ‘an inspiring display of courage and conviction.’  Hostess has said repeatedly that a prolonged strike would result in a ‘rapid’ wind-down of the company, which has been in bankruptcy court since January.  ‘A widespread strike will cause Hostess Brands to liquidate if we are unable to produce or deliver products,’ the maker of Twinkies said in a statement.” (Karen Robinson-Jacobs, “Bakers’ Union Goes On Strike Against Hostess Brands,” The Dallas Morning News, 11/10/12)

On Friday, Hostess Said The Company Will Shut Down And Liquidate Because Of The Striking Union:

On Friday, Hostess Said The Company Will Shut Down And Liquidate Because Of The Striking Union. “Hostess Brands Inc. announced early Friday that the company will shut down and sell its assets, blaming union bakery workers' refusal to end a strike.” (“Hostess Says It Will Shut Down, Liquidate,” Kansas City Business, 11/16/12)

  • Hostess Said The Union Strike “Crippled The Company’s Ability To Produce And Deliver Products At Multiple Facilities.” “‘The Board of Directors authorized the wind down of Hostess Brands to preserve and maximize the value of the estate after one of the company’s largest unions, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), initiated a nationwide strike that crippled the company’s ability to produce and deliver products at multiple facilities,’ Hostess said in the statement.” (“Hostess, Maker Of Twinkies And Ding Dongs, Says Closing Business,” NBC News, 11/16/12)

The Associated Press: “The move to liquidate comes after thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike last week after rejecting the latest contract offer.  The bakers union represents about 30 percent of the company’s workforce.  A representative for the bakers union did not return a call seeking comment.” (Candice Choi & Tom Murphy, “Twinkie Maker Hostess Reaches The End Of The Line,” The Associated Press, 11/16/12)

The Associated Press Headline: “Hostess Moves To Liquidate After Crippling Strike”(Candice Choi & Tom Murphy, “Twinkie Maker Hostess Reaches The End Of The Line,” The Associated Press, 11/16/12)

And On Saturday, The Wall Street Journal Editorial Board Details The “Crippl[ing]” Union Contract Provisions Placed On Hostess:

Hostess Was Forced To Manage Nearly 400 Collective-Bargaining Agreements, 80 Health Plans And 40 Pension Plans. “The snack giant endured $52 million in workers’ comp claims in 2011, according to its bankruptcy filing this January.  Hostess’s 372 collective-bargaining agreements required the company to maintain 80 different health and benefit plans, 40 pension plans and mandated a $31 million increase in wages and health care and other benefits for 2012.” (Editorial, “The Twinkie, A Suicide,” The Wall Street Journal, 11/16/12)

Cake And Bread Products Were Delivered Using Separate Trucks With Separate Workers Loading Each. “Union work rules usually required cake and bread products to be delivered to a single retail location using two separate trucks.  Drivers weren’t allowed to load their own vehicles, and the workers who loaded bread weren’t allowed to load cake.  On most delivery routes, another ‘pull up’ employee moved products from back rooms to shelves.” (Editorial, “The Twinkie, A Suicide,” The Wall Street Journal, 11/16/12)

The Bakers’ Union Bosses Make “Fat-Cat Salaries”:

The Bakers’ Union Bosses Are Making Significant Salaries. “It is instructive to see the fat-cat salaries that the union bosses receive.  The March 2012 LM-2, the annual filing required by the Department of Labor for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union reveals that union bosses collectively received more than $3 million in compensation.  The secretary treasurer takes down a whopping $196,627 while the president rakes in $210,672.  Hey, the Big Labor execs have their dough, so why should they sweat, a month before Christmas, about 18,500 employees going jobless?  Perhaps they should adopt a new slogan for their union: Let ‘em eat cake.” (Jennifer Rubin, “Ding Dongs – Big Labor Strikes Again,” The Washington Post, 11/16/12)

David B. Durkee Is The Secretary-Treasurer Of The Bakery, Confectionery, Tobacco Workers And Grain Millers International Union And Makes $196,627.(U.S. Department Of Labor, Form LM-2 Labor Organization Annual Report, Bakery, Tobacco & Grain AFL-CIO, 3/28/12)

Robert Oakley Is The Vice President Of The Bakery, Confectionery, Tobacco Workers And Grain Millers International Union And Makes $142,638.(U.S. Department Of Labor, Form LM-2 Labor Organization Annual Report, Bakery, Tobacco & Grain AFL-CIO, 3/28/12)

Frank D. Hurt Is The President Of The Bakers’ Union. (U.S. Department Of Labor, Form LM-2 Labor Organization Annual Report, Bakery, Tobacco & Grain AFL-CIO, 3/28/12)

  • Hurt’s Lone Political Contribution Was To President Obama For $250 In 2008.(Center For Responsive Politics, www.opensecrets.org, Accessed 11/16/12)

NOTE: In Total, Union Officers At The Bakers’ Union Made More Than $1.6 Million In Salary In 2011. (U.S. Department Of Labor, Form LM-2 Labor Organization Annual Report, Bakery, Tobacco & Grain AFL-CIO, 3/28/12)

NOTE: In Total, Union Employees (33 Employees) At The Bakers’ Union Made More Than $2.8 Million In Salary In 2011 Which Is An Average Salary Of About $85,000/Year. (U.S. Department Of Labor, Form LM-2 Labor Organization Annual Report, Bakery, Tobacco & Grain AFL-CIO, 3/28/12)

The Bakers’ Union PAC Contributed Only To Democrats In The 2012 Election Cycle:

The Bakers’ Union Only Contributed To Democrats In The 2012 Election Cycle.(Center For Responsive Politics, www.opensecrets.org, Accessed 11/16/12)

The Bakers’ Union Is An Affiliate Of The AFL-CIO Which Is Run By Obama Supporter Richard Trumka:

The Bakers’ Union Is An Affiliate Of The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).(U.S. Department Of Labor, Form LM-2 Labor Organization Annual Report, Bakery, Tobacco & Grain AFL-CIO, 3/28/12)

AFL-CIO President Richard Trumka Attacked Hostess. “‘What’s happening with Hostess Brands is a microcosm of what’s wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor,’ A.F.L.-C.I.O. President Richard Trumka added in a separate statement.” (“Twinkie Maker Goes Belly Up,” TheStreet.com, 11/16/12)

Trumka Is A Big Supporter Of President Obama. “Labor and President Obama haven’t always seen to eye.  But AFL-CIO President Richard Trumka says he couldn’t be happier with the way the campaign is shaping up.” (“AFL-CIO President: Obama’s Running The Election We Always Wanted,” Talking Points Memo, 8/9/12)

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