A weekend of labor strikes has prompted Hostess Brands Inc. to close three plants and mull a possible liquidation of the beleaguered baking company.
Hostess, which has been dueling with various labor groups for the past 10 months as it attempts to claw its way out of bankruptcy, had picket lines at about two-thirds of its plants this past weekend, according to Chief Executive Gregory Rayburn. The strikes were organized by the Bakery, Confectionery, Tobacco Workers & Grain Millers International Union, whose 5,680 Hostess workers account for about 30% of the company's total work force.
In September, the union rejected a Hostess proposal that called for deep labor concessions, but a judge later allowed the baking company to force the union to adopt the new collective bargaining agreement.
The union on Friday said its strike was a protest of the "horrendous contract" that Hostess imposed, which features wage cuts and limits workers' participation in pension plans.
Mr. Rayburn said Monday afternoon that Hostess was shutting down plants in Seattle, St. Louis and Cinicinnati as a result of the work stoppage. "We don't have the manpower to maintain them during the strike," he said.
If the strike continues, he added, the company will have to forgo the reorganization proposal that was slated for an initial round of approval later this month and instead initiate wind-down proceedings.
"I think the timeline for us to have to make that determination is very short," he said of the decision to liquidate the company. "We're talking days, not weeks."
Frank Hurt, the bakers union president, said he's well aware of the potential for a liquidation but stressed that "people will only take so much" when it comes to cuts to their wages and benefits. In an interview Monday, he took aim at the labor offer that 92% of voting BCTGM Hostess workers rejected in September.
Well then enjoy being laid off forever.