Hostess Says Talks To Delay Shutdown Fail - 47 ABC - Delmarva's Choice

Hostess Says Talks To Delay Shutdown Fail

Posted: Updated:

NEW YORK, Ny. - Hostess Brands Inc. lived to die another day.
    
The maker of Twinkies and Ding Dongs said late Tuesday that it failed to reach an agreement with its second-biggest union. As a result, Hostess plans to continue with a hearing on Wednesday in which a bankruptcy court judge in White Plains, N.Y., will decide if the company can shutter its operations.
    
The renewed talks between Hostess and The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union came after the company declared last week that it would move to wind down its business and start selling off its assets in bankruptcy court. The company cited a crippling strike that was started on Nov. 9 by the union, which represents 30 percent of Hostess workers.
    
After making its case to liquidate on Monday, the bankruptcy court judge noted that the two sides hadn't yet tried resolving their differences through private mediation. The judge noted that 18,000 jobs were on the line and urged the company and union to try to resolve their differences. Both sides agreed to hold mediation proceedings on Tuesday.
    
In a statement late Tuesday, Hostess said it would not comment on the breakdown in talks other than to say that mediation "was unsuccessful." There was no immediate comment from the bakers union.
    
Hostess shut down its three dozen plants late last week after it said the strike by the bakers union hurt its ability to maintain normal production. The union says the company's demise was the result of years of mismanagement, however, and that workers have already given steep concessions over the years.
    
Hostess, weighed down by management turmoil, rising labor costs and Americans' changing tastes, is making its second trip through Chapter 11 bankruptcy restructuring. The company, based in Irving, Texas, had brought on CEO Gregory Rayburn as a restructuring expert in part to renegotiate its contract with labor unions.
    
The company reached an agreement with its biggest union, the International Brotherhood of Teamsters, on a contract that dramatically reduced pension contributions, as well as slashing wages and health benefits. But the company said the bakers union stopped returning its calls about a month ago.
    
The Teamsters urged the smaller union to hold a secret ballot on whether members wanted to continue striking. Many workers in the bakers union decided to cross picket lines last week but Hostess said it wasn't enough to keep operations at normal levels.
    
Teamsters General Secretary Ken Hall said the failure of the mediation talks Tuesday and the likely shuttering of the company was a "tragic outcome" for Hostess workers.
    
Rayburn said that Hostess was already operating on razor thin margins and that the strike was the final blow. The bakers union meanwhile pointed to the steep raises executives were given last year as the company was spiraling down toward bankruptcy.
    
The company's announcement last week that it would move to liquidate prompted a rush on Hostess treats across the country, with many businesses selling out of Twinkies within hours.
    
Even if Hostess goes out of business, its popular brands will likely find a second life after being snapped up by buyers. The company says several potential buyers have expressed interest in the brands. Although Hostess' sales have been declining in recent years, the company still does about $2.5 billion in business each year. Twinkies alone brought in $68 million so far this year.

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

  • Most Popular StoriesMost Popular StoriesMore>>

  • Homeless Sex Offenders

    Homeless Sex Offenders

    DELAWARE - Individuals featured in this slideshow are NOT wanted. They are sex offenders who have registered with Delaware State Police as homeless. These are public notifications.More >>
    DELAWARE - Individuals featured in this slideshow are NOT wanted. They are sex offenders who have registered with Delaware State Police as homeless. These are public notifications.More >>
  • Spring Gas Giveaway

    Spring Gas Giveaway

    Let WMDT fill up your tank! It's time for our Spring Gas Giveaway! More >>
    Enter for your chance to win a $100 Exxon/Mobil Gas Card!More >>
  • Man Found Dead Outside Home In Centreville

    Man Found Dead Outside Home In Centreville

    Wednesday, April 23 2014 8:12 AM EDT2014-04-23 12:12:46 GMT
    CENTREVILLE, Del. (AP) - New Castle County police are investigating the death of a man found lying in the driveway of his home in Centreville. Police say a relative found 85-year-old James Conaway dead outside his home on High Ridge Road on Tuesday. His bronze Cadillac was missing, but police say it has been found. Conaway's body has been taken to the Office of the State Medical Examiner for an autopsy to determine the cause and manner of his death. Sgt. Jacob Andrews says Conaway's death has...More >>
    CENTREVILLE, Del. (AP) - New Castle County police are investigating the death of a man found lying in the driveway of his home in Centreville. Police say a relative found 85-year-old James Conaway dead outside his home on High Ridge Road on Tuesday. His bronze Cadillac was missing, but police say it has been found. Conaway's body has been taken to the Office of the State Medical Examiner for an autopsy to determine the cause and manner of his death. Sgt. Jacob Andrews says Conaway's death has...More >>
  • ContestsMore>>

  • Spring Gas Giveaway

    Spring Gas Giveaway

    Let WMDT fill up your tank! It's time for our Spring Gas Giveaway! More >>
    Enter for your chance to win a $100 Exxon/Mobil Gas Card!More >>
  • Teacher Who Makes A Difference

    Teacher Who Makes A Difference

    The WMDT 47 Teachers Who Make a Difference Contest is Sponsored by Accurate Optical: "Encouraging children of all ages to come in for an annual eye exam to help them see better in school." Each month weMore >>
    The WMDT 47 "Teachers Who Make a Difference" Sponsored by Accurate Optical Encouraging children of all ages to come in for an annual eye exam to help them see better in school.More >>
Powered by WorldNow
Powered by WorldNow All content © Copyright 2000 - 2014 WorldNow and WMDT. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms of Service.