Hostess Nears Teamsters Deal

Gothamist
14, 2012

Hostess, the beloved but bankrupt sweets company, may not have to be liquidated after all. The Post reports that the company, which has been going through bankruptcy proceedings since January, is this close to coming to a deal with its Teamsters. Which might allow them to keep their creditors happy.

Nothing has been signed yet and T's still need to be crossed and I's dotted, but "there are no major sticking points, according to sources." It isn't all great news—workers are going to be asked to take a 5 percent wage cut in the first year, and there will be health-care cuts and lower pension contributions—but jobs will be saved.

As part of the deal, Hostess would be able to sell smaller brands, such as Southeast favorite Merita Bread. Part of the sale proceeds would go to the company and part to pay back the creditors.
In exchange, the company would remain in almost all of the Teamsters’ multi-employer pension plans — a key demand of union officials.
The Teamsters are expected to reach a deal with creditors by week’s end, then spend the next few weeks preparing ballots to distribute to its roughly 8,500 Hostess worker members.

Of course, just because union officials like the deal doesn't mean that workers will. Mexican bakery conglomerate Grupo Bimbo, which has tried to buy out the brand before, already pays its workers more. But right now this is "likely Hostess' last hope." Save the Twinkies!

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