Union leader lashes out at Hostess management
Jan. 12, 2012
by Josh Sosland
KENSINGTON, MD. — Expressing hope that the Hostess Brands Corp. will survive in the wake of the recent bankruptcy filing, the leader of a principal union representing baking employees issued a strongly worded statement countering assertions the company’s financial problems are due to “union contracts and pension and health benefits obligations.”
“I find it deeply offensive and highly disingenuous for the company to claim that its financial woes are the result of its union contracts and pension and health benefits obligations,” said Frank Hurt, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union. “We contend that the company is in dire financial shape because of a string of failed business decisions made by a series of ineffective executives who have been running this company for the past decade.”
According to the B.C.T.G.M., the union represents about 5,000 Hostess workers.
Announcing the bankruptcy filing, Hostess said its “current cost structure is not competitive, primarily due to legacy pension and medical benefit obligations and restrictive work rules.” The company expressed the hope it will emerge from bankruptcy with “competitive employee benefit plans.”
According to the B.C.T.G.M., the union has been “working with Hostess for months to identify an amenable resolution that would address the company’s financial difficulties.”
“Throughout this process, the company has never provided the union with a legitimate proposal that could be taken to the membership for consideration,” he said.
Mr. Hurt expressed great concerns about the jobs at Hostess at risk and the well being of union members working at Hostess.
“We had hoped that the company would emerge from the last restructuring stronger and more competitive,” he said. “Our members sacrificed a great deal to try and save the company the last time.
“The B.C.T.G.M. has contracts with dozens of baking companies across the country, including Bimbo Bakeries USA, the nation's largest and most successful. The vast majority of those companies are doing just fine because they have experienced baking industry professionals managing them.”
Mr. Hurt took particular issue as highly misleading “the company's portrayal in the media of its pension obligation problems.”
“Hostess Brands had been a longstanding participant in the industry’s Taft-Hartley multi-employer pension fund,” the union said. “The nearly $1 billion dollars the company refers to is its withdrawal liability. Every participant in a Taft-Hartley fund has withdrawal liability, which ensures that beneficiaries will receive negotiated pension benefits if a company leaves the fund.
“The contributions Hostess had paid into the fund were negotiated through the collective bargaining process and are part of an overall economic compensation package. Pension benefits that retirees receive each month are paid by the fund and not the individual companies.”
Ultimately, Mr. Hurt expressed the hope solutions will be found.
"We remain hopeful that solutions can be found to ensure the permanent continuation of Hostess Brands,” he said. “We will work with the stakeholders throughout the process to find a solution that protects the interests of our members and helps enable the company to remain a viable business entity.”