Hostess Union Mediation Fails; Company to Proceed with Liquidation Plans
(NEW YORK) -- It appears the company that makes Twinkies and Wonder Bread will close after all. Hostess says its mediation to reach a new labor agreement with its bakery workers failed and it will move ahead with liquidation plans.
On Monday, Judge Robert D. Drain of the Federal Bankruptcy Court for the Southern District of New York pushed Hostess and its workers to reach an agreement with the help of a mediator to save the jobs of more than 18,000 employees. The company said last week that it would wind down operations after bakery workers decided to continue their strike that began Nov. 9.
By Tuesday evening, Hostess announced the last-ditch mediation had failed. Now the folks who make the popular snack brands will lose their jobs.
The brands could survive under another baker, however. Other companies could step in and by some of Hostess' most famous brands such as Twinkies. According to the New York Times, Flower Foods and Grupo Bimbo, the world's largest bread baker, are two potential buyers.
Many of the union workers are angry their negotiators didn't accept something that might have saved their jobs. Chris Schiaffarelli worked as a truck driver at the Hostess plant in Elmsford, NY. He's a Teamster, but he says the bakers union had a lot of guts in this dispute.
"The bakers union showed a lot of guts standing up for what they believe because although I'm a Teamster, I know we narrowly passed this latest contract, and I did not want it and I don't believe anybody wanted it," Schiaffarelli said of the contract negotiations Hostess settled with the Teamsters in September. "I know the drivers that I worked with on the last contract had sacrificed greatly. We gave $110 back on our base salary, paid $30 into our benefits."
After 22 years working for Hostess, Schiaffarelli says he's worried about finding another job in this economy.
"I've been working for Hostess for 22 years, and it's definitely devastating to find out that you're unemployed after so long," he said. "I'm 51 years old currently, and I currently just feel … it's going to be difficult."
Now the company plans to continue with a hearing scheduled for Wednesday morning in which Judge Drain will decide if the company can liquidate its assets.
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