UPDATE 2: US: "Mismanagement" to blame for Hostess collapse - union
Controversy continues as Hostess fate in the balance
The failure of successive managers and owners - and not the workforce's decision to launch strike action - is the reason US baker Hostess Brands is facing possible liquidation tomorrow (15 November), union officials have insisted.
Members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) moved to strike last Friday in protest at an 8% cut in pay and loss of benefits that, the union said, would reduce workers' incomes by 27-32%. Industrial action was supported by 92% of the union's members.
In response, the company has insisted if a sufficient number of workers fail to return to their stations by 5pm ET today, management will apply for bankruptcy court approval to liquidate the business, with the loss of almost 18,000 jobs.
Speaking to just-food today, a spokesperson for Hostess said the company is "reaching out to employees" and "encouraging them to come back to work".
The spokesperson emphasised the BCTGM represents under a third of Hostess's 18,000 strong workforce. "A very small minority are putting the jobs of nearly 18,000 employees at risk," the spokesperson said.
However, the union has reacted angrily to the suggestion that the striking workers are "to blame" for the failure of the company.
"The crisis facing Hostess Brands is the result of nearly a decade of financial and operational mismanagement that resulted in two bankruptcies, mountains of debt, declining sales and lost market share. The Wall Street investors who took over the company after the last bankruptcy attempted to resolve the mess by attacking the company's most valuable asset - its workers," BCTGM president Frank Hurt insisted.
Hurt claimed the "Wall Street investors" in control of the company plan to sell Hostess "in a way that will maximize the profits of these vulture capitalists regardless of the impact on the workforce".
The spokesperson for Hostess denied the accusation the group's owners intend to wind down the business, rather than returning it to profitability.
"The fact that we continue to ask workers to return demonstrates that we want to avoid liquidation. I'm not sure what more evidence is needed," he insisted.
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