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- 2012 - November - 14th -

Bakers’ union strikes Hostess plants: Jacksonville bakery remains operating

by Karen Brune Mathis, Managing Editor

Members of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union are striking Hostess Brands Inc. plants nationwide, including the Interstate Brands bakery in North Jacksonville.

The plant remains open.

Members of bakers' union Local 103 were picketing Tuesday at the bakery, which is in the Imeson International Industrial Park.

The bakers' union is striking Hostess, which is reorganizing under Chapter 11 bankruptcy laws, saying in a two-page "Hostess Strike Fact Sheet" that workers agreed to significant wage and benefit concessions in a previous Hostess bankruptcy and then the company filed again in January.

The fact sheet is available at BCTGM.org.

The fact sheet says if Hostess emerges from bankruptcy under its present plan, it will still have too much debt, too high costs and not enough access to cash to stay in business for the long term.

The previous restructuring was completed in 2009, and by 2011 "the company was floundering and again demanded major concessions from its unionized members," said the fact sheet.

Hostess Brands spokesman Lance Ignon said in an email Tuesday the Jacksonville bakery, Interstate Brands at 201 Busch Drive E., employs 128 people.

"We will be forced to liquidate Hostess Brands if the strikes cripple the company's ability to produce and deliver products, so we are urging striking employees to return to work to help revive the company," Ignon said.

Ignon said he had no specifics about Jacksonville's plant. He said it produces Wonder bread, Nature's Pride and Merita products.

Bakers' union members on strike Tuesday at the plant said they were picketing in shifts around the clock at the property. A member of the union, who said he could not be identified because of union rules, estimated 70-80 union members work at the plant and that more than half are on strike.

Security guards would not allow visitors into the bakery's parking lot.

Money.CNN.com reports that in September, one of the company's two major unions, the International Brotherhood of Teamsters, voted narrowly to accept the deal, but the bakers' union rejected it. Hostess management sought permission from the bankruptcy court to force the new contract on workers.

The Teamsters and bakers, the largest unions, represent about 93 percent of the company's unionized workforce, according to Dallasnews.com.

The Teamster.org/hostess website posted that the union was not informed about the bakers' union actions.

"It's unclear whether the goal of the Bakers strike is to force Hostess to negotiate or just put Hostess out of business," says the site.

"In interviews Hostess claims BCTGM leaders have not returned calls for many weeks. In addition, Teamster Leaders were not informed by the BCTGM of its actions that began on Friday," it said.

The Teamsters said it recognizes "this is a tough position for all Hostess workers — Hostess management over the years has done nothing to build confidence that it can manage the business successfully but a majority of Teamster members, based on reviewing the final offer and listening to our restructuring experts and Teamsters leaders, believe the management changes and increased oversight and governance controls contained in the ratified final offer provide the only chance to preserve jobs at Hostess."

Dallasnews.com reports the contract called for an 8 percent wage reduction that was imposed in recent weeks and that with all concessions and give-backs, the union said the cuts amount to 27 percent to 32 percent overall.

The company also stopped making contributions to a multiemployer pension program in July 2011 and imposed cuts in health benefits, the news site said.

It said the previous bankruptcy reorganization lasted five years during which 21 Hostess plants were shut down and thousands of jobs lost.

Hostess countered that cumbersome work rules and other provisions of its union contracts are partly to blame for its financial woes.

Irving, Texas-based Hostess Brands Inc., the maker of brands that include Twinkies and Ding Dongs, announced Monday it will permanently close three bakeries — in Seattle, St. Louis and Cincinnati — because of the nationwide strike that began Friday by the bakers' union.

Hostess said the strike prevented the bakeries from producing and delivering products.

"Our customers will not be affected because we will continue to serve them from other Hostess Brands bakeries, but sadly this action will result in the permanent closure of three facilities and the loss of 627 jobs," said Hostess Brands CEO Gregory Rayburn in the news release.

Hostess Brands, which also makes Ho Hos, Suzy Q's, Cupcakes, Sno Balls, Donettes and bread and other products, filed for reorganization under Chapter 11 bankruptcy laws in January in New York.

The company filed Worker Adjustment and Retraining Notifications across the country in May that layoffs were possible. Hostess Brands issued a statement at the time that it mailed conditional WARN notices to all 18,500 employees around the country that a sale or wind down of the company was possible in the future during the restructuring under Chapter 11.

"However, our goal is still to emerge from bankruptcy as a growing company and there are no immediate actions being taken to sell or wind down the company. We are simply fulfilling our requirements by sending these notices," said the statement at that time.

The Florida WARN filing indicated that Hostess might lay off 340 statewide employees, including 185 in Northeast Florida at eight bakery outlets and at the North Florida manufacturing plant. The notices listed the layoff dates as July 7-21, but no layoffs took place.

Ignon said in July the filing was a legal requirement that plant closings and layoffs could occur, "but it was completely conditional."

The list of plants at hostessstrike.info shows 36 plants, including the three that are closed. Hostess said the union is striking at 24 plants.

According to the Wall Street Journal, bakers' union President Frank Hurt said he was well aware of the possibility of a company liquidation, but said "people will only take so much" when it comes to wage and benefit cuts.

Rayburn said "we deeply regret this decision, but we have repeatedly explained that we will close facilities that are no longer able to produce and deliver products because of a work stoppage — and that we will close the entire company if widespread strikes cripple our business."

Hostess said the Seattle bakery employs 110 people and produces Hostess cake products; the St. Louis facility employs 365 people and produces Hostess cakes, Nature's Pride and Wonder breads; and the Cincinnati facility employs 152 people and produces Butternut, Beefsteak and Wonder breads.

According to the news release, Rayburn said some employees "are apparently under the misimpression that if they force Hostess to liquidate, another company will buy our bakeries and offer them employment."

He disputed that. "The fact is, the bakery industry already has far too much capacity, and there is a strong risk that many of our facilities may never operate as bakeries again once they are closed. I believe the leadership of the Bakers Union knows this fact, but is willing to sacrifice its Hostess employees for the sake of preventing other bakery companies from asking for similar concessions," he said in the release.

Hostess, founded in 1930, makes brands such as Hostess, Wonder, Nature's Pride, Dolly Madison, Drake's, Butternut, Home Pride and Merita. Hostess Brands says it has about 18,300 employees and operates 36 bakeries (now 33), 565 distribution centers, about 5,500 delivery routes and 570 bakery outlet stores throughout the United States.

The bakery outlets in the Jacksonville area operate as Merita or Dolly Madison stores, according to Hostessbrands.com. The outlets do not appear to have been affected by the strike.

Jax Cash Mob shops Nov. 23 in San Marco

Jax Cash Mob will meet at 11 a.m. Nov. 23 outside Maple Street Biscuit Co., 2004 San Marco Blvd., to unveil its target store and says each "mobber" will spend $10-$20 at the announced business.

After the mob, participants will regroup at Maple Street Biscuit for lunch.

Jax Cash Mob co-founder Mike Field said there are three rules for a cash mob: Spend $10-$20 at a local store; meet three new people; and have fun.

The Jax Cash Mob was formed in April and seeks to support locally owned businesses in Downtown, Avondale, Murray Hill, Riverside, San Marco and Springfield. It has held eight "mobs."

Field said studies show that for every $100 spent at an independent business, the local economy has a return of $68 as opposed to $43 when that same amount is spent at a national chain. For information about Jax Cash Mob, follow it on Facebook at JaxCashMob.

kmathis@baileypub.com

@MathisKb

(904) 356-2466

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