Photos Loading
previous next
  • Paul Kitagaki Jr. / pkitagaki@sacbee.com

    Diana McKinley of Seattle pickets at the Sacramento Hostess plant. The Seattle plant was one of three closed earlier this week and a shutdown of the company could begin next week. Privately held Hostess entered bankruptcy court in January.

  • Paul Kitagaki Jr. / pkitagaki@sacbee.com

    Hostess Brands has about 300 workers at its operations in the Sacramento region. The striking bakery union's spokesman says contract givebacks are unacceptable.

  • Paul Kitagaki Jr. / pkitagaki@sacbee.com

    A bakery union striker from Billings, Mont., walks the Sacramento picket line Thursday.

0 comments | Print

Amid Sacramento strike, Hostess threatens liquidation

Published: Friday, Nov. 16, 2012 - 12:00 am | Page 6B

Two dozen workers walked the picket lines on Thursday outside the Hostess Brands plant on Arden Way near the Capital City Freeway in Sacramento. They didn't know if they'd ever be going back to work.

The maker of Twinkies, Wonder Bread, Ding Dongs and other iconic U.S. brands had threatened to file a motion in bankruptcy court to liquidate the entire company if striking workers didn't agree to return by Thursday evening. Late in the day, the company said it would likely postpone any announcement to this morning.

In Sacramento, Hostess employs about 226 workers at its bakery and a total of 39 at two distribution centers and a retail store. The company also has 20 workers in Rancho Cordova, 12 in Woodland and eight in Auburn.

Picketing began Sunday as part of a national strike by the Bakery, Confectionery, Tobacco Workers and Grain Millers' International Union against Hostess, which has 18,500 employees across the country.

On the Sacramento picket line Thursday, union members were orderly, somber and anxious to hear of any new developments as the day wore on.

They came prepared with supplies of food, water and coffee as they held signs and marched quietly up and down the block on either side of the Hostess headquarters.

Some who said they weren't authorized to speak deferred to Marty Zimmerman, secretary-treasurer with BCTGM Local 85.

"For us, it's simple; we couldn't give any more," Zimmerman said.

The union representative said the company ceased pension contributions last year, a move he characterized as a major blow to workers.

"There are people here right now who know that this plant could close, but they have conviction. Enough is enough," Zimmerman said.

A spokesman for Hostess, Lance Ignon, told the Associated Press the company would likely make an announcement today after assessing plant operations Thursday evening.

Hostess, based in Irving, Texas, has already reached a contract agreement with its largest union, the International Brotherhood of Teamsters. But thousands of members in its second-biggest union went on strike late last week after rejecting in September a contract offer that cut wages and benefits.

In an interview with Fox Business, Hostess CEO Gregory Rayburn said many workers have already crossed picket lines this week to go back to work despite warnings by union leadership that they'd be fined.

"The problem is we don't have enough crossing those lines to maintain normal production," said Rayburn, who first joined Hostess earlier this year as a restructuring expert.

Hostess says that production at about a dozen of the company's 33 plants has been seriously affected by the strike. Three plants were closed earlier this week.

The Teamsters union is urging the smaller union to hold a secret ballot on whether to continue striking. Citing its financial experts who had access to the company's books, the Teamsters say that Hostess' warning of liquidation is "not an empty threat or a negotiating tactic" but a certain outcome if workers continue striking.

The Teamsters also noted that the strike put its union members in the "horrible position" of deciding whether to cross picket lines.

Hostess, a privately held company, filed for Chapter 11 bankruptcy protection in January, its second trip through bankruptcy court in less than a decade. The company cited increasing pension and medical costs for employees as one of the drivers behind its latest filing. Hostess has argued that workers must make concessions for it to exit bankruptcy and improve its financial position.

The company, founded in 1930, is fighting battles beyond labor costs, however. Competition is increasing in the snack space and Americans are increasingly conscious about healthy eating. Hostess also makes Dolly Madison, Drake's and Nature's Pride snacks.

Hostess said it would file the motion to liquidate today if needed, with a hearing scheduled for Monday. If the motion is granted, Hostess would begin closing operations as early as Tuesday.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Mark Glover



About Comments

Reader comments on Sacbee.com are the opinions of the writer, not The Sacramento Bee. If you see an objectionable comment, click the "Report Abuse" link below it. We will delete comments containing inappropriate links, obscenities, hate speech, and personal attacks. Flagrant or repeat violators will be banned. See more about comments here.

What You Should Know About Comments on Sacbee.com

Sacbee.com is happy to provide a forum for reader interaction, discussion, feedback and reaction to our stories. However, we reserve the right to delete inappropriate comments or ban users who can't play nice. (See our full terms of service here.)

Here are some rules of the road:

• Keep your comments civil. Don't insult one another or the subjects of our articles. If you think a comment violates our guidelines click the "Report Abuse" link to notify the moderators. Responding to the comment will only encourage bad behavior.

• Don't use profanities, vulgarities or hate speech. This is a general interest news site. Sometimes, there are children present. Don't say anything in a way you wouldn't want your own child to hear.

• Do not attack other users; focus your comments on issues, not individuals.

• Stay on topic. Only post comments relevant to the article at hand.

• Do not copy and paste outside material into the comment box.

• Don't repeat the same comment over and over. We heard you the first time.

• Do not use the commenting system for advertising. That's spam and it isn't allowed.

• Don't use all capital letters. That's akin to yelling and not appreciated by the audience.

• Don't flag other users' comments just because you don't agree with their point of view. Please only flag comments that violate these guidelines.

You should also know that The Sacramento Bee does not screen comments before they are posted. You are more likely to see inappropriate comments before our staff does, so we ask that you click the "Report Abuse" link to submit those comments for moderator review. You also may notify us via email at feedback@sacbee.com. Note the headline on which the comment is made and tell us the profile name of the user who made the comment. Remember, comment moderation is subjective. You may find some material objectionable that we won't and vice versa.

If you submit a comment, the user name of your account will appear along with it. Users cannot remove their own comments once they have submitted them.

hide comments
Sacramento Bee Job listing powered by Careerbuilder.com
Quick Job Search
Buy
Used Cars
Dealer and private-party ads
Make:

Model:

Price Range:
to
Search within:
miles of ZIP

Advanced Search | 1982 & Older



Find 'n' Save Daily DealGet the Deal!

Local Deals