Tuesday, November 20, 2012
Can Mediation Save Twinkies?
As the nation mourns the loss of Hostess treats, a bankruptcy judge eager to save thousands of jobs directed the parties to mediate in a last-ditch effort to avoid winding down the company. Hostess Brands and the Bakery, Confectionery, Tobacco Workers and Grain Millers Union, which represents over five thousand Hostess workers, are meeting today with a mediator to narrow their differences toward a labor agreement. If mediation succeeds, it could prevent the liquidation and save 18,500 jobs. The 82-year-old baking company filed for Chapter 11 again this year, just three years after emerging from bankruptcy. At the time, the company said it was unable to pay its debts and needed to make deep cuts in labor costs to survive. Hostess was able to reach a new contract with the Teamsters, its largest union. But talks between the company and the bakery workers deadlocked, and the union went on strike with management declaring plans to liquidate last week. Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York pushed for one last round of talks. At a hearing yesterday, the judge expressed dismay that neither side had exhausted all efforts to avoid liquidation. Some thought the company was bluffing that a buyer was going to come save the company. Potential suitors include Flowers Foods and Grupo Bimbo, the world’s largest bread-baking company which already owns parts of Entenmann’s, Thomas’ English muffins and Sara Lee. Perhaps this effort can save jobs and a favorite of America's sweet tooth. See full story here- http://dealbook.nytimes.com/2012/11/19/hostess-and-bakers-union-agree-to-mediation/