Ailing US group Interstate Bakeries Corp. has hit back at trade unions for pulling out of contract negotiations with the company.

Interstate, which remains in Chapter 11, is looking to restructure the business to safeguard its future. Last month, Interstate said it would close down its bread business in Southern California, making around 1,300 employees redundant.

Yesterday, The Teamsters trade union decided to quit talks with Interstate, accusing the company of putting "a gun to our heads".

The union said Interstate "refused to recognize" the contributions that the company's employees to help the company remain in operation.

Interstate said that 25,000 jobs at the company are at stake, adding that the union's decision to pull out of negotiations was "regrettable".

"The company has acknowledged and continues to acknowledge the sacrifices made by all of its employees in enabling it to survive in Chapter 11 for three years," Interstate said. "We remain committed to saving the company and providing better jobs for our employees."

The company lost US$113m, according to its latest fiscal results, and admitted it is facing "all-time, record-high commodity costs and intense competition".