Hostess' Teamsters members may strike -union

Mon Feb 13, 2012 4:53pm EST

* Union votes to authorize strike pending court ruling

* May strike if court OKs Hostess' "unfair" labor proposals

* Hostess in Chap. 11 bankruptcy, burdened by labor costs

By Nick Brown

Feb 13 (Reuters) - About 7,500 union workers at Hostess Brands Inc, the makers of Twinkies and Wonder Bread, may strike if a U.S. bankruptcy judge grants the company's bid to slash commitments to union employees, the Teamsters Union said on Monday.

The Teamsters said in a statement its members voted by a margin of 9-to-1 to authorize the strike if Hostess' "unfair" proposal is granted by U.S. Bankruptcy Judge Robert Drain in White Plains, New York.

A Hostess Brands spokesman could not immediately be reached for comment.

Hostess submitted the request on Jan. 25, two weeks after filing its second bankruptcy since 2004. The company said a successful reorganization will require it to withdraw from multiemployer pension plans, bring down its cost of long-term worker benefits, and alter the terms of its collective bargaining agreements.

The matter is set for a hearing on March 5.

"While we remain committed to finding a solution to save the company, it won't be done solely on the backs of our members and Hostess employees," Dennis Raymond, director of the union's bakery and laundry conference, said in the statement.

Raymond said unionized employees have made concessions before, only to see the company remain stagnant.

One other union piped up in similar fashion on Monday. The Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, which has about 6,000 members at Hostess, said in court papers it compromised with the company during its last trip through bankruptcy, which lasted from 2004 to 2009.

Hostess "frittered away the value of the BCTGM's concessions through a series of wasteful business decisions," ultimately landing it back in bankruptcy court, the union said.

Hostess, founded in 1930, has about $860 million in debt. It operates around 36 bakeries and employs about 19,000 people, a majority of whom are members of 12 unions.

While a strike could be detrimental to the company, Hostess said the consequences of keeping its current labor cost structure are just as severe.

"Without relief from their existing CBAs and benefit obligations, there is a substantial likelihood that will rapidly expend all available cash," it said in court papers. "With no other viable alternative, would be forced to liquidate."

The case is In re Hostess Brands Inc, U.S. Bankruptcy Court, Southern District of New York, No. 12-22052.