Hostess looking to get back in business, sans the union employees

posted at 4:01 pm on April 26, 2013 by Erika Johnsen

Last fall, Hostess tried to readjust their struggling business model and keep the company (along with its 19,000-strong workforce) going strong by closing a few factories and downsizing workers’ wages and benefits — and the bakers’ union to which a big chunk of the Hostess workforce belonged didn’t like that all. Their resulting strike turned out to be a suicide mission, however; the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union might have thought they were calling the company’s bluff, but Hostess really could not afford to keep up the bloated pay structure, and the settlement failure meant liquidation and a whole lot of layoffs.

Now, a buyout firm is looking to put Hostess’s bankrupt assets back into business; Ed mentioned yesterday that at least one plant should be up and running by July, and they’re planning on re-opening several other plants in short order — but they’re trying to do it without the union contract this time. Via ABC:

But last month Apollo Global Management, LLC, and Metropoulos & Co., which owns Pabst Blue Ribbon and Vlasic pickles, bought the 83-year-old company for $410 million, renaming it Hostess Brands LLC. It is planning to re-open four bakeries over the next two and a half months, in Columbus, Ga.; Emporia, Kan.; Schiller Park, Ill.; and Indianapolis. It is also contemplating a fifth in Los Angeles.

According to a report in the Wall Street Journal, C. Dean Metropoulos, the company’s chief executive, said that between now and September, he plans to inject $60 million in capital investments into the plants, and hopes to hire at least 1,500 workers. …

While Metropoulos did not respond to interview requests from ABC News, he told the Journal that he does “not expect to be involved in the union going forward.” …

A spokeswoman for the BCTGM did not return phone calls to ABC News. In a March statement, BTCGM president David Durkee said, “We share the enthusiasm, energy and passions exhibited by new ownership, and believe our highly-motivated and skilled workforce will serve as indispensable partners in the seamless re-opening of factories,” he said.

But, according to the Journal, Metropoulos and his son, Daren, felt confident that they would be able to hire non-union employees near the new plants.

The loss of all of those jobs last year was something of a PR debacle for the unions — one that they could ill afford in these declining days of union membership — and now the company is back on the prowl for more competitive, more attractive non-union hires. True that the new hires could unionize sometime in the future, but as Hostess executive vice president Michael Cramer said on Thursday, “We are not going to invite the unions in. We don’t have to.”

The Hostess closing left 18,000 people out of work across the country—with about 5,000 of those union members. Hiring in remodeled plants is underway. …

“The Hostess strike will be a lasting image and not for the good of unions,” said Marc Bloch, a labor and employment lawyer at Walter & Haverfield.

“I think any management team will hold up a photo to its workers of Hostess strikers and say, ‘What’s a union going to do for you?”’ Bloch said. “The case can be made that they did nothing.” …

Only 14.3 million of all workers in the U.S. currently belong to unions, according to the Bureau of Labor Statistics—just 11.3 percent of the total workforce. That’s the lowest rate in 70 years. The peak for union workers was a 35 percent rate during the mid-1950s, after a surge in unionization during the Great Depression through post-World War II.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments