On Wednesday, January 11, Hostess Brands filed for bankruptcy protection for the second time since 2004. The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) represents more than 5,000 workers at Hostess Brands.
The BCTGM International Union’s legal and financial team, under the direction of International President Frank Hurt, 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.
In commenting on the company’s bankruptcy filing, Hurt states, “We are very concerned for the jobs and well being of our members employed at Hostess. We had hoped that the company would emerge from the last restructuring stronger and more competitive. Our members sacrificed a great deal to try and save the company the last time.
“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. 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.
“The BCTGM 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.”
Hurt points out that the company’s portrayal in the media of its pension obligation problems was very misleading. Hostess Brands had been a longstanding participant in the industry’s Taft-Hartley multi-employer pension fund. 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.
“We remain hopeful that solutions can be found to ensure the permanent continuation of Hostess Brands. 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,” Hurt concludes.
BCTGM members produce Hostess Brands products in 34 production facilities throughout the U.S. The Union also represents workers in thrift stores and depots.