Hostess goes into mediation with labor union


On Friday, it appeared that a union strike had taken down Hostess, maker of the Twinkie and Ding Dong. Teamsters had made concessions to get workers back on the job rather than see the company go out of business, but the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) refused to ratify a new labor agreement, despite the urging of Teamsters for them to do so. Because of this, Hostess, which was going through bankruptcy for the second time, decided to liquidate, eliminating 18,500 jobs.

But yesterday, news broke that Hostess and BCTGM would enter mediation to try to resolve the stalemate that seemed to be unbreakable:

The bakery giant and its labor unions have agreed to a Tuesday mediation session over a crippling labor strike the company cited as the final trigger for the emergency shutdown Hostess began last week.

The temporary reprieve in the labor-management standoff came in a White Plains, N.Y., hearing Monday in which U.S. Bankruptcy Court Judge Robert Drain questioned the rationale for the strike by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

Drain cited “serious questions” about the strike because the union rejected Hostess’ latest contract offer without filing an objection to it or discussing the possibility of going to mediation. The union represents about 5,000 of the company’s 18,500 workers.

Even without mediation, Hostess may have been bought out by a competitor inside the United States or even by a company outside the country. This, of course, doesn’t mean that Hostess will survive its current, and seemingly on-going, financial problems or even that an agreement will be reached that the bankruptcy judge will find suitable. But the role of unions in the predicament is a factor that cannot be overlooked.

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