A deal between bankrupt Hostess Brands and its unions that could rescue the maker of Twinkies and Wonder bread before a crucial trial begins tomorrow is not likely, CEO Gregory Rayburn told The Post.
Hostess made a last-ditch effort to win support from its unions on April 14 by offering to pony up at least some cash for their pensions, but Rayburn, in an interview with The Post, said he is not hopeful of reaching a deal with the Teamsters and bakery unions.
The unions are expected to reject the offer and could come back with a counteroffer today.
Absent a deal, a bankruptcy judge will hold a two-day trial to determine if Hostess can scrap its existing collective bargaining agreements.
If the union deals are canceled, the likelihood of both a union strike and the liquidation of Hostess increases.
"As much as 50 cents of every dollar Hostess Brands contributes goes to pay for pensions for people who worked at other companies that no longer exist and who never worked at Hostess Brands, IBC or any other predecessor of [Hostess]," the company said in its proposal. "Unfortunately, we can no longer afford to carry the pension costs of former competitors who have long since closed their doors and disappeared."
The Post reported exclusively Saturday that New Jersey Hostess Teamsters workers were now being forced to take severe pension cuts because their multi-employer pension was under-funded enough to trigger federally mandated cuts.
Hostess has not made pension contributions since August, which is partly why the multi-employer pensions are becoming seriously under-funded.
Hostess, under the new plan, would not make back payments and would not make new pension contributions until 2013.
At that time, it would give present workers the chance to get reduced pension benefits when they join financially healthy multi-employer plans.
By Josh Kosman for New York Post