Hostess Blames Unions for Its Bankruptcy [View all]

[The Straight Story]

Hostess Blames Unions for Its Bankruptcy


DALLAS (CN) - Hostess Brands, which filed for Chapter 11 two weeks ago, asked a judge to reduce its commitments to union employees, claiming the costs put the Twinkie-maker at a "profound competitive disadvantage."

Irving-based Hostess asked the Manhattan Bankruptcy Court to reject its collective bargaining agreements and modify retiree benefit obligations for its major unions, The International Brotherhood of Teamsters, and the Bakery, Confectionary, Tobacco and Grain Millers Union.

Hostess said when it filedfor bankruptcy that incremental change, including a bankruptcy filing 3 years ago, were insufficient and that its cost structure is "not competitive, primarily due to legacy pension and medical benefit obligations and restrictive work rules. Those issues, combined with the economic downturn and a more difficult competitive landscape, created a worsening liquidity situation that prompted the need for a reorganization."

Hostess seeks relief from what it calls "a number of significant financial commitments and arcane work rules imposed by collective bargaining agreements."

http://www.courthousenews.com/2012/01/30/43442.htm