In reaction the news that the bankrupt Hostess company – maker of such sugary confections as Twinkies and Ding-Dongs – is closing its doors because it was unable to reach an agreement with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), AFL-CIO President Richard Trumka issued the following statement (the bakery union is an AFL-CIO member):
What’s happening with Hostess Brands is a microcosm of what’s wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor. Crony capitalism and consistently poor management drove Hostess into the ground, but its workers are paying the price. These workers, who consistently make great products Americans love and have offered multiple concessions, want their company to succeed. They have bravely taken a stand against the corporate race-to-the-bottom. And now they and their communities are suffering the tragedy of a needless layoff. This is wrong. It has to stop. It’s wrecking America.
That is not how the company management sees it. CEO Gregory Rayburn said the bakers union refused to deal and gave management no choice. Another major union that represented workers at the company, the International Brotherhood of Teamsters, agreed.
In a statement yesterday, it said the leadership of the BCTGM was not representing the best interrests of its members and putting Teamster members in an untenable position:
Today, the Teamsters Union announced its recommendation to the Bakery, Confectionary, Tobacco and Grain Millers International Union (BCTGM) that a vote of its Hostess members by secret ballot should be held to determine if the workers want to continue their strike of the company and force it into liquidation.
On Wednesday, Nov. 14, Hostess Brands indicated that if it couldn’t resume normal operations by 5 p.m. EST on Thursday, Nov. 15 that it would have to begin the liquidation process. Teamster Hostess members and all Hostess employees should know this is not an empty threat or a negotiating tactic, but the certain outcome if members of the BCTGM continue to strike. This is based on conversations with our financial experts, who, because the Teamsters were involved in the legal process, had access to financial information about the company. (Emphasis added.)
The Teamsters said it had made concessions and struck a deal with management that would have kept the company open. The BCTGM, it alleged, did not tell its members of the full extent of the company’s problems:
The BCTGM chose a different path, as is their prerogative, to not substantively look for a solution or engage in the process. BCTGM members were told there were better solutions than the final offer, although Judge Drain stated in his decision in bankruptcy court that no such solutions exist. Without complete information, BCTGM members voted by voice votes in union halls. The BCTGM reported that over 90 percent rejected the final offer and three of its units ratified the final offer. (Emphasis added.)
In a follow-up news release today, the Teamsters again said that the BCTGM’s refusal to budge brought the company down, though it did not explicitly name the union this time:
Unfortunately, the company’s operating and financial problems were so severe that it required steep concessions from a variety of stakeholders but not all stakeholders were willing to be constructive. Teamster Hostess members, based on the facts and advice from respected restructuring advisors, understood what was at stake and voted to protect all jobs at Hostess.
The Teamsters acrimoniously split from the AFL-CIO years ago in an attempt to form a rival labor coalition with the Service Employees International Union. They have a long history of acting independently of the larger labor movement.
For its part, the BCTGM has said it bears no responsibility for any of the company’s troubles. It represents 30 percent of their workforce. The liquidation of Hostess will likely cost 18,500 employees their jobs.