I.B.C. calls Teamsters' allegations 'inaccurate'
September 11, 2007
by Eric Schroeder
KANSAS CITY — Interstate Bakeries Corp. on Monday evening responded to an earlier announcement by the International Brotherhood of Teamsters, saying the assertions made by Jim Hoffa and Richard Volpe of the Teamsters were "inaccurate."
"We remain committed to saving the company and providing better jobs for our employees," I.B.C. said, calling the decision by the Teamsters to break off talks with the company "regrettable."
According to I.B.C., the status of the Southern California market has been widely known among both the Teamsters and other constituents since June 2006, and on June 15, 2007, Craig Jung, chief executive officer of I.B.C., told senior representatives of the Teamsters at a meeting in Washington that California was considered a "problem market," and that the company intended to re-shape or exit California and the company’s other struggling markets.
Regarding the Teamsters’ allegation that the company has refused to allow several viable investors to "come to the table," I.B.C. responded, "The potential investors we believe the Teamsters are referring to have requested that I.B.C. allow them to obtain and disclose confidential information about the company to the Teamsters, and inject themselves into the negotiating process between the company and unions representing some of it employees. The company’s investment bankers have consistently told the potential investors to whom the Teamsters are referring that they, the potential investors, are welcome to participate in the financial restructuring process under the same terms and conditions as all other interested investors."
As it considers options for the future, I.B.C. said its challenge remains to align its cost structure with "the economic realities of all-time, record-high commodity costs and intense competition." The company said it remains committed to the two cornerstones of its business plan, which include implementing a more capable and more cost-effective path to market, and lowering its cost structure through rational health and welfare concessions.
Shares of Interstate Bakeries dipped as low 70c per share in early morning trading on Tuesday, down from the close of 95c per share on Sept. 10.