After weeks of being blamed for the November bankruptcy of Hostess Brands, the bakers union on Thursday finally went public with its side of the story.
Union members had given about $110 million in concessions, including pay cuts amounting to 28 to 32 percent of compensation, to keep the company afloat after its first bankruptcy in 2004, union president David Durkee said in a conference call with reporters.
By last fall, union members lost faith that management, seeking more givebacks, would ever use the concessions to invest in the plants, research and development, marketing or advertising Hostess products, as was promised after the union agreed to cuts, Durkee said.
Ninety-two percent of the voting members of Bakery, Confectionery, Tobacco Workers and Grain Millers International voted to strike. Hostess responded by closing its plants and putting 6,000 bakery union employees out of work.
“Our people … just gave up on this employer,” Durkee said. “Our members were very discouraged with the huge amount of debt brought into the deal. Enough was enough.”
Durkee said baking is an art and a science, and the experienced bakers were upset at management that brought in six CEOs in eight years. He criticized the “Wall Street investors” and “third-tier management with no baking experience” that ran Hostess Brands, which for many years was based in Kansas City and known as Interstate Bakeries.
Union members, said Durkee, are eager to get back to work in the shuttered plants — although they have no idea which of the 36 former plants might become operational again. Hostess had bread and bun plants in Lenexa and Boonville, Mo., and a snack cake plant in Emporia, Kan.
Lawyers for the union, also participating in the conference call, said they had limited access to speak with representatives of companies that are bidding to buy Hostess properties or product rights through a bankruptcy court process.
The union has signed a confidentiality agreement that keeps it from revealing specific details of those talks.
Durkee said the bakery union was willing to work with any owner but wanted buyers that had experience in the bakery industry. That doesn’t necessarily confine preferred bidders to established companies such as Grupo Bimbo and Flowers Foods Inc. and other companies that have entered bids.
“There are some private equity companies and hedge funds that are qualified to do this,” Durkee said, adding that the union wanted to work with any owner that will “bring to the table low debt and invest in the company.”
Obviously, he hopes new owners will hire union members.
“It’s going to be difficult to get the plants back up and running without union support,” he said. “Only our members know how to get things running. A workforce off the street won’t be able to accomplish that.”
Durkee stopped short of promising a union boycott against any new owner that didn’t hire union members. But he noted that fourth-quarter earnings by Flowers and other competitors surged after Hostess folded and that the union would work hard to return brand loyalty to Hostess products.
He said union members showed courage and solidarity in the strike, and he believes that strength continues. Several hundred former Hostess workers have been hired by Bimbo, and a few now are working for Flowers in different locations, he said, but most are getting unemployment benefits. He said the union didn’t have exact information about members that might have taken other jobs.
Asked whether he thought the union could get a better deal with prospective owners than what Hostess offered, his response was quick: “Absolutely, we think we can get a better deal.”