Interstate Bakeries Pushes for Concessions

October 17, 2007: Over 10,000 jobs are on the line for the Teamsters who deliver Twinkies, Wonder Bread, and other products for Interstate Bakeries Corporation (IBC).

IBC is seeking new concessions from Teamster drivers. On Oct. 3, a U.S. Bankruptcy Judge extended the deadline for the company and the union to agree on contract changes by 30 days.

Teamster members first made concessions in 2004, when IBC declared Chapter 11 bankruptcy. Now IBC says those concessions are not enough and is demanding more from members—even though the head of the company is pulling down $75,000 a month.

IBC wants to cut wages, and it is asking for all Teamsters to pay $20 a week for healthcare.

The company also wants to implement a “path to market” distribution system that will eliminate many Teamster jobs and change work rules. The company complains that its current distribution system—cobbled together from mergers with other bakeries—is antiquated.

Four Plants Close

The bankruptcy judge has already allowed the company to close down its operations in Southern California, eliminating 800 Teamster jobs.

IBC wrung out new concessions from the other major union, the Bakery, Confectionary, Tobacco Workers and Grain Miller’s International Union on Sept. 28. The BCTGM represents 10,000 IBC bakers.

The Teamsters are promoting the investment company Yucaipa as a potential savior for the company.

Yucaipa and its billionaire head Ron Burkle got concessions from Teamster carhaulers at Allied earlier this year after Burkle took over ownership and control of Allied.

For now, IBC is balking at a Burkle takeover, and the Teamsters are still threatening to strike. Industry experts believe that a strike could doom the company. Even if the company folds, its brands are likely to be sold off and survive—but the effect on Teamster jobs could be disastrous.

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