KANSAS CITY — Shares of Interstate Bakeries Corp. fell as low as 88c per share in midday trading on Monday — the lowest level on record and down 23% from the close on Sept. 7 — following news that the International Brotherhood of Teamsters have broken off talks with I.B.C. on how the company should reorganize.
"We refuse to negotiate with a gun to our heads," said Jim Hoffa, president of the Teamsters. "Our members will take the necessary actions to show the company that they are prepared to stand and fight for their livelihoods."
The decision to break off talks comes two weeks after I.B.C. announced the closing of its Southern California operations, including four bakeries, which would put 1,300 union members out of work, including 800 Teamsters. At that time, I.B.C. said it was seeking concessions the company said are needed to "achieve meaningful productivity savings in health and welfare plans." The company said it had not asked unions for concessions on pension plans to date.
"We have weeks, not months or years, to act," Craig Jung, I.B.C.’s chief executive, said in late August. "Union agreement to path-to-market and the health and welfare concession in our business plan are crucial."
According to the Teamsters, I.B.C. has refused to consider putting the closing of Southern California bread operations on hold pending further discussions. It also has refused to guarantee that should workers agree to concessions, the company will not close the rest of the operations. The Teamsters also said I.B.C. has refused to promise that work currently performed by Teamsters will continue to be performed by Teamsters.
"The Teamsters entered negotiations this week with an open mind," said Richard Volpe, international director of the Teamsters. "We fully understand the company’s financial and competitive position. In fact, our members have negotiated and agreed to sacrifices that resulted in more than $16 million in annual savings to the company. Not only does the company refuse to recognize those contributions, the company continues to exclude viable investment partners that could result in its emergence from bankruptcy."
According to the Teamsters, I.B.C.’s demands also include the provision that Teamster workers contribute more than $320 million over five years, a figure the Teamster’s called "a vastly disproportionate share."
"Make no mistake, we are prepared to be creative and to consider all options that would help I.B.C. once again be an industry leader, either as a stand-alone company or sold to a willing partner," Mr. Volpe said.
The Teamsters did not disclose who potential investment partners may be, saying only that those who have come to the negotiating table have been told they must sign an agreement that prohibits them from talking with the Union.
"We call on the company, and the other constituents in the bankruptcy process, to work with us to formulate a plan that brings I.B.C. out of bankruptcy," Mr. Volpe said. "We are prepared to look at ways to save additional costs. However, we must be viewed as a party that has a significant investment in the process. Further, we call on the company to cease excluding viable investment partners, restricting alternatives that will only drive down the value of the company."