Unions Given Final Cost Cutting Offer by Twinkies Maker Hostess
Twinkles-maker Hostess Brands Inc has made a final offer to its workers’ unions giving details of proposed cost-cuts and has said that in case they do not accept the offer, it will ask a bankruptcy court to impose the cuts.
New York, April 16 (SharewellNewswire.com) - Hostess Brands Inc, maker of Twinkies, Wonder bread and Ding Dongs, said that it has made a final offer to its workers detailing cost-cuts that they need to accept, failing which it will ask a bankruptcy court to impose the cuts. The cost-cuts involve reduced pension benefits and changes in work rules with a view to lowering costs. It has also asked the Teamsters and bakers’ unions to accept outsourcing of some delivery work.
The company said that it will pursue its efforts with the bankruptcy court to annul the collective bargaining agreements with the unions in case its offer is rejected by them. A union official gave the threat of a strike action in retaliation. In January, Hostess brands had filed for bankruptcy protection for the second time in less than a decade. The union contracts will come up for a trial Tuesday.
Hostess wishes to come out of some multi-employer pension plans. It also said that it would like to rejoin a few of the financially strongest plans. It proposed that new hires would be covered under the same 401(k) – retirement accounts that are used by nonunion and management employees. It would also like to reduce annual pension contributions from $103 million to $25 million. It proposes that those work rules should be changed that sometimes require two trucks instead of one and it wants to outsource deliveries to small stores.