Circ activation contest

Sweetheart Bakery closure means 350 lost jobs in Montana

2012-11-17T00:06:00Z 2012-11-17T00:11:25Z Sweetheart Bakery closure means 350 lost jobs in MontanaBy JAN FALSTAD Billings Gazette Helena Independent Record
November 17, 2012 12:06 am  • 

After 82 years of baking history that produced Wonder Bread and sweet snack legends like Twinkies and Sno Balls, Sweetheart Bakeries across America are closing, leaving 18,500 employees and about 350 Montanans without jobs.

On Friday, Hostess Brands chief executive Greg Rayburn and his team filed liquidation papers in the U.S. Bankruptcy Court of Southern New York, carrying out a threat that the company would be shut down if the striking bakers did not return to work on Thursday.

Members of the Bakery, Confectionery, Tobacco Workers and Grain Millers Union, representing about 30 percent of Sweetheart’s work force, went on strike beginning Nov. 9 after Hostess imposed a contract the bakers had voted down by a 94 percent margin.

Meanwhile, Franz Bakery based in Portland, Ore., is at least eyeing the Billings market.

Franz, a family-owned, 100-year-old chain of seven bakeries, moved into the western Montana market and then into the Billings area several years ago.

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.

“As we continue to grow in the future, we will always explore any opportunity that fits our core business model,” Albers said.

In Billings, bakers walking a cold picket line on Friday said they walked off the job on Nov. 10 and wouldn’t return to work mostly because they didn’t trust management.

Hostess spent five years in a reorganization bankruptcy that ended in 2008 and filed for a second bankruptcy 10 months ago. The company is now owned by a private equity firm and two hedge funds.

In September, the bakers rejected a contract calling for wage and benefit cuts of 27 to 32 percent, including an immediate 8 percent pay cut, plus a 20 percent shift of health care costs onto employees.

The company cut off health care benefits when the strike began, said Eusebio Diaz, Billings business agent for BCTGM Local 466.

“We probably shouldn’t have taken the company plan because then you have too many eggs in one basket,” Diaz said.

The bakers union, the second largest at Sweetheart, also refused to give up a guaranteed eight-hour work day and 40-hour work week in the contract.

Some strikers feared they would be turned into temporary workers.

The picket lines will continue until union attorneys review the liquidation filing that runs more than 100 pages.

“The way the papers were filed in bankruptcy court, there’s some leeway in there for him (Rayburn) to do something else,” Diaz said.

Rayburn said the company will be “selling its assets to the highest buyer,” according to the Wall Street Journal. While Hostess didn’t have a buyer for the entire company, it had received some interest in certain assets, the Journal said. The company also could sell its well-known brands.

In addition to asking the bankruptcy judge to grant permission to close the company, Hostess also asked for approval of bonuses for 19 managers, ranging from 25 percent to 75 percent of their base yearly compensation, according to the Journal.

Sid Mauch, a five-year employee at the Billings bakery, said he doesn’t regret striking, even if it leads to the end of Sweetheart.

“I’m not going to work that hard and put in those many hours and get paid less,” Mauch said. “I’m going to start pounding the pavement, start looking for another job.”

Billings bakery workers have been applying for unemployment insurance since the strike began.

“Hostess said they sent a letter out to all those not cleaning up to stay home, so they are unemployed now,” said John Harper, superintendent of Job Service in Billings.

Copyright 2015 Helena Independent Record. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(10) Comments

  1. FlamingLiberal1
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    FlamingLiberal1 - November 23, 2012 1:55 pm
    Hostess has had six CEOs since 2002. In the first bankruptcy in 2004, workers agreed to large wages concessions, money that was never reinvested in the business. In 2009, it emerged from bankrubtcy under the management of a private equity firm and two hedge funds. Vultures there to pick the carcass. 21 plants closed and thousands of jobs were eliminated. In 2011, Hostess again demanded concessions from workers, while the CEO got a 300% raise and upper management all got from 50% to 300% more. Then Hostess stopped paying its pension obligations to workers and tried to strongarm the union into accepting 30% less. But by all means, blame the union for the failure. Feh.
  2. Bidnessman
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    Bidnessman - November 21, 2012 3:59 pm
    Speaking of being shortsighted, I would trust Romney's business sense, just for his past performance. Did he profit from his experience? Yes. Could he have helped this country through these financial times? I believe yes. Or we could continue to blame Bush, as is often the case in these comments. This company started out as a small business many years ago, and the people that have guided it helped how many workers with their pay, benefits, and retirement. I would think quite a few more than the people that have agreed not to work for Hostess since November 9th. Companies need to make a profit. The investors that take the risks need to see a return on investment. If they do not, they must cut their losses and try and recover as much as they can. Or they can run their company like the government and borrow more and more and wait to be bailed out. People choose their jobs and conduct. It is their choice and they must live with it. I wish everyone luck, and am looking forward to working with Franz Bakery.
  3. jha1963
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    jha1963 - November 21, 2012 9:32 am
    How is things going for you now, you go on strike because you do not want to help the company survive, you just think of yourself, now you have no job, no benefits. Way to go,
  4. steeline
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    steeline - November 21, 2012 9:23 am
    If you don't like your job find another one. If you are a solid worker you will have no problems. Good workers are hard to find and will never have to worry about being unemployed or under paid. The rest, well tough.
  5. FlamingLiberal1
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    FlamingLiberal1 - November 19, 2012 12:39 pm
    These union members were quite right in saying no to slashed wages and benefits, to support shareholder dividends. We need to stand behind labor, including refusing to spend our money at the big-box stores who swill at the tax trough while paying their workers poverty wages.
  6. skooter
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    skooter - November 17, 2012 12:46 pm
    It's nice you can count on certain things...shortsighted people who repeat all of the same lies, barely read the stories, repeat all of the winger talking points, and blame (and would let sink) real american/montanan/neighbor workers over the companies sticking it to them.

    This is what we narrowly avoided earlier the month. The Romney way of doing business. Buy, cut, destroy, fire and make a profit...who cares about workers, wages, benefits and the families destroyed....oh wait, and blame the workers too.

    These are investments bankers (like Romney's Bain Capital) buying an asset in bankruptcy court and cutting the cake into as many pieces as possible to sell for the most money...it's never once been a secret that they would do it. And one of the ways to make more money is to force as many concessions from the workers as possible to trim overhead, even though top executives (all wall street investors with no food or bakery experience, have gotten massive pay raises during the same period. The workers have made huge concessions already over the last 8 years, and this is the company coming back for more, with more threats to close plants if they don't concede (even though they'd long ago declared they'd close them either way as part of the profit driven bankruptcy and fire-sale and no matter if the 30% cuts to wages and benefits were or weren't accepted). And every promise to invest in the company to keep the brands and company working when the workers made earlier huge concessions were NEVER made by the wall street crew just looking for more billions.

    BCTGM pres Frank Hurt said: "Our members know that the plans all along of the Wall Street investors currently in control of this company did not include the operation of Hostess Brands any longer than it takes to sell the company in whole—or in part—in a way that will maximize the profits of these vulture capitalists regardless of the impact on the workforce."

    Now the good news is that many of these brands and bakeries may be purchased as part of this money grab sale and taken over by legit owners and people that care about real workers and American jobs...and making your HO-HOs. But some of these jobs, workers and families will be never be the same by this little microcosm of American Romney-style greed. And let's not pretend these guys were getting paid fabulous fat cat salaries (oh, unless you were talking about the actual fat cat owners and upper management...they of course ALWAYS get paid.

    It's time to stand up for real jobs, workers, infrastructure, families, the things that made this country great, the things that have disappeared and the things that matter...not making excuses for corporate excess, greed and everybody can stick it because I've got mine, I'm rich and you aren't politics (and attitudes always on display here).
  7. steeline
    Report Abuse
    steeline - November 17, 2012 11:47 am
    Great job Union and you support Obama. Your people are fools to belong to such an organization. If workers were smart they would dump all unions. There are enough labor laws on the books to cover the necessities of worker safety. The rest is up to the worker. You work hard you have a job. You are a slacker you get canned. That way the best work. Oh! but now that we have Obama it really don't matter if you work he will give you money that is earned by those who do work, until it is all gone and that is about NOW. We have to save America.
  8. captbob
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    captbob - November 17, 2012 10:05 am
    Shortie, give me a break. Hostess is owned by "two private equity firms and a hedge fund." They're asking the workers to take a pay cut while giving bonuses to managers. It's clear that the strategy of the hedge fund was to bleed the company then sell the assets: a classic Wall Street move.

    The union wants Hostess to continue paying into the worker's pension plan (they stopped a couple years ago), restoration of health benefits, and they want their pay to keep up with inflation. They aren't asking for the 25-75% bonuses being given to managers -- just parity. To pit this as a "union workers bleeding the poor struggling owners" story is simply incorrect.
  9. SerialThriller
    Report Abuse
    SerialThriller - November 17, 2012 9:18 am
    Uh, better received if it could be comprehended shortie. Good grief, proof it!!
  10. shortie
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    shortie - November 17, 2012 7:22 am
    Here we go again with these selfish union people. Like Mr. Mauch,"I'm not going to work hard for less." Thats the union the word," hard work". Let me explain about the unions demand, to deliver Sweetheart bread and a Twinkie can not be handled in the same truck. The driver is not allowed to handle these products in the same truck. Thats just one union request. Now Mr. Mauch[union employee] he doesn't want to work harder and get less pay so I will strike and I'm proud of it. This is what unions do to people, work hard anymore is a nasty word. I bet Mauch never worked on a farm, dairy, working outside in cold weather, how about a shovel or broom, no I think he wants the union way,"less hard work and more pay"

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