Hostess warns of liquidation threat if workers strike

Hostess warns of liquidation threat if workers strike

Struggling US bakery group Hostess Brands has warned it would be forced to liquidate the company if its unionised workforce takes strike action.

Earlier this month, Hostess won approval from a US bankruptcy court to push through a collective bargaining agreement that had been rejected by some unions, notably the Bakery, Confectionery, Tobacco Workers & Grain Millers union.

The deal will see pay cut by around 8% across the workforce, US reports have suggested. The Twinkies maker started to roll out the changes to its terms and conditions this week.

The move has raised the possibility of industrial action but, a spokesperson for the company told just-food, significant strike action would likely lead to the liquidation of the group.

"Talks with our unions have been completed. The Teamsters and several other unions ratified our last, best, final offer. The court authorised implementation of the changes with the remaining unions," the spokesperson said. "A strike is still possible, and should a significant one occur, we would be forced to wind down the company."

Hostess filed for Chapter 11 bankruptcy protection in January with over US$1bn in debts. It is the second time the company has entered Chapter 11; it did so as Interstate Bakeries Corp. in 2004, emerging five years later.

Previously, Hostess has warned its 18,500-strong workforce any sale or closure of the company would result in job cuts.