Teamsters submit proposal for restructuring Hostess

by Eric Schroeder
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WASHINGTON — The Teamsters Union, which represents more than 7,500 delivery drivers and merchandisers at Hostess Brands, Inc., submitted a proposal today that the union said would share burden among all stakeholders and put Hostess on a path to financial recovery.

“The Teamsters’ proposal demands that executives, as well as all stakeholders, actually share equally in the financial sacrifices necessary for Hostess to emerge from bankruptcy instead of paying lip-service to the concept,” said Ken Hall, general secretary-treasurer of the Teamsters.

The 16-page proposal comes in advance of an April 17 hearing in the U.S. Bankruptcy Court in New York in which Hostess is expected to ask the court to toss its existing union contracts if its unions don’t accept cost-cutting proposals in its “final” offer.

Hostess’ “final” offer this past weekend included reduced pension benefits, work rule changes that the company said would lower its costs and the outsourcing of some delivery work.

Meanwhile, the latest proposal from the Teamsters includes concessions worth $150 million a year in addition to $110 million in concessions the union said it made about three years ago.

The union laid out several specific modifications to its current agreement. For example, the union’s proposal would allow Hostess to use casual transport drivers to fill in for regular full-time drivers absent due to illness or unscheduled absences, or to run extra loads. Additionally, Hostess would be allowed to use distributors and/or wholesalers to distribute a hybrid line of Hostess products.

In its proposal the Teamsters said Hostess would be required to develop a line of “like” items in order to compete with Little Debbie.|

“The source of product ideas/design will be the Top 10 Little Debbie stock-keeping units,” the Teamsters said. “These products will not include any products that are direct competitors of Hostess. The company will have the right to immediately distribute the above products under the ‘warehouse delivery system’ as agreed by the parties and in effect under the long-term extension agreements. Immediately following the introduction of the above items, the company will eliminate three items currently on the Dolly Madison Bakery Cake Warehouse Direct Product List.”

The Teamsters also proposed that Hostess must agree to not exit any current sales market during the term of the letter of understanding for the purpose of evading the terms and conditions.

“Should (Hostess) nonetheless decide to exit a sales market, it agrees that it will negotiate with IBC-IBTNNC over the decision and its effects if the decision is predicated on labor costs, and will negotiate with the IBC-IBTNNC over the effects of the decision if the decision is not predicated on labor costs.”

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