After a doomed attempt for a bankruptcy court to hold last-minute talks between the Baker’s union and the treat maker, Hostess will be back in court on Wednesday while a judge decides if it can shut down for good.
The emergency talks between Hostess and The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union failed to yield any compromise from the union that would allow Hostess to continue operations.
The meeting was set when the judge decided that the two groups had not yet attempted private mediation. In a last ditch attempt to save 18,000 jobs, the two sides agreed to meet one final time.
In a statement following the meeting, Hostess said that the mediation “was unsuccessful” and offered no further comment in order to comply with mediation rules.
Americans have been choosing the treats offered by the snack maker on a declining basis which was why the restructuring of labor costs was necessary to continue.
The union has pointed at Hostess’ management failures as the cause for the company’s failure despite the $2.5 billion per year in revenues brought in.
Disagreements between the unions also put the Baker’s unions claims into question. The Teamsters had asked the Bakers to hold a secret ballot to see if their members preferred the prospect of losing their jobs altogether or a pay and benefit cut. The Baker’s union declined even as many of their own members crossed picket lines – unfortunately, not enough to keep the company going.
There are several rumored buyers as Hostess has many successful products. Twinkies alone bring in an estimated $68 million per year. As many of the buy rumors are from private equity companies who are likely to sell off the assets to whomever they can. With the snack industry having more production capacity than demand requires, the sold-off plants are unlikely to see employees return to work and whoever buys the product lines will likely produce them at their facilities.