350 Jobs Lost, Hostess Union Clings to Hope

Aaron Flint posted on November 19, 2012 12:09 :: 1990 Views

The bakers union credited with bringing down Twinkie maker Hostess brands is clinging to hope, as 350 jobs in Montana alone are threatened.  But could a Mexican billionaire come to the rescue?  Here’s the latest: 

Wall Street Journal: “Hostess Union Clings to Hope

While Hostess has said the shutdown would result in the loss of more than 18,000 jobs and place the fate of more than 30 American brands in jeopardy, union President Frank Hurt said he believed there was “more than a good chance” that a buyer quickly would swoop in to buy the profitable parts of the company and give his union’s members their jobs back.

“Nobody wants to have anything to do with these old plants or these unions or these contracts,” Mr. Rayburn (Hostess CEO) said in an interview. The company had hunted for buyers for the last several years as it tried to avoid a second trip into bankruptcy, but no buyer came forward.

The Daily Caller: “Mexican Billionaire May Save Twinkies

Meet Daniel Servitje Montull. He and his family are worth more than $4 billion by our tally. Servitje runs Grupo Bimbo, a publicly traded bakery concern that ranks as the world’s largest bread maker. (Seated close to Servitje is his uncle, Don Roberto, and his father, Lorenzo. Papa Servitje founded Bimbo with three others in 1954.) Daniel Servitje assumed control of Bimbo in 1997, setting the company on a course of rapid growth. This included a battle with Mexico‘s tortilla don; positioning white bread in Latin American markets; and careful management of Bimbo’s fleet of white delivery vans.

The Billings Gazette’s Jan Falstad: 350 Jobs Lost Due to Hostess Closure

Sweetheart Bakeries across America are closing, leaving 18,500 employees and about 350 Montanans without jobs.

Franz is not building a bakery in Billings, said marketing manager Jessica Larson in Portland.

Franz president Marc Albers said Friday that no details have been decided yet about an auction, the sale of Sweetheart brands or other assets. But he left a door open to another acquisition, possibly the Billings bakery.

Additional insight on the troubles at Hostess from The Wall Street Journal:

The snack giant endured $52 million in workers’ comp claims in 2011, according to its bankruptcy filing this January. Hostess’s 372 collective-bargaining agreements required the company to maintain 80 different health and benefit plans, 40 pension plans and mandated a $31 million increase in wages and health care and other benefits for 2012.

Union work rules usually required cake and bread products to be delivered to a single retail location using two separate trucks. Drivers weren’t allowed to load their own vehicles, and the workers who loaded bread weren’t allowed to load cake. On most delivery routes, another “pull up” employee moved products from back rooms to shelves.

The 18,500 layoffs are equal to about 11% of the net new jobs the entire U.S. economy created in October.

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