Hostess Threatens Layoffs In San Leandro

Company says 22 workers at its outlet store on Montague Avenue could be let go as part of a complex bankruptcy filing.


It will be an uneasy Fourth of July for 22 workers the Hostess Outlet Store in San Leandro.

According to a state database they could be laid off as of today (follow link to PDF and look for "San Leandro).

Those local workers are among 1,700 Hostess employees statewide who have been put on similar notice by Hostess Brands.

In fact, the Texas-based company has warned all of its 18,000 employees that they could be fired.

The warnings are a tactic in a bankruptcy filing that seeks, in part, to void contracts with the unions that represent about 80 percent of the company's workforce.

Hostess Brands did not respond to a request for information about its plans in San Leandro.

Staffers at the local store say they haven't heard anything definitive.

So until further notice, the store remains open.

Anxiety nothing new

Apprehension has run high at Hostess since at least January when the company filed for Chapter 11 bankruptcy to reorganize its business.

It was the company's second bankruptcy filing in recent years.

The same company under a different name -- Interstate Bakeries -- went into bankrupty in 2004 and emerged as Hostess Brands in 2009 according to USA Today.

When it filed its second bankruptcy, Hostess cited a number of causes including higher labor and pension costs.

But observers said another factor has been a dramatic shift in eating habits that disfavor well-known Hostess products like Twinkies, Ho-Ho's and Wonder Bread.

Hostess says its goal is "to emerge from bankruptcy as a growing company with a strong future."

Layoff warnings pressure unions

The Teamsters are one of the two unions that represent most Hostess workers. The other is the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

The Teamsters say wages and pensions are not the primary cause of the company's woes. Instead, they blame mismanagement and underinvestment. Teamster leaders say they will not let Hostess "force a poorly defined or inequitable turnaround plan on its employees.

The Wall Street Journal reports that the Teamsters have threatened to strike if Hostess uses the bankruptcy process to void its contracts. Company and union officials agree that such a strike would likely shut the company down, the Journal says.

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An\on July 03, 2012 at 02:36 PM
It all starts with Sales. Where's the Wonder Bread? Colombos or Toscana? Anyone see them in grocery stores anymore? And who buys Twinkies or HoHo's anyway? Who drives out of their way to shop at bakery outlets? How many people can they attract to outlets? Are sales improving or falling? There's just a limited amount of dinero folks. Employees, it's pretty tragic for you because many of you have probably worked there for years, but you better give in to lower incomes or you'll all be out looking for jobs. And the Teamsters? They're only looking out for themselves. All they want are your dues and monthly pension contributions to fatten their own retirement checks. Been there, done that!
Mike Feagan July 03, 2012 at 03:09 PM
Sad for the employees who may lose there jobs.And also sad for the families who needed the savings to put bread on the table.
Tom Abate (Editor) July 03, 2012 at 03:22 PM
I get the sense this is a long game of chicken between the company and the unions. Any why assume the unions are to blame? A Washington Post story at the time of the bankruptcy filing says Hostess owed one of its pension funds $944 million -- so it had already stopped making payments and was still in trouble. http://www.washingtonpost.com/business/economy/2012/01/11/gIQAxrXAsP_story.html
Debi Dowell July 03, 2012 at 04:15 PM
This truly is unfortunate. I discovered this little store on my way home from work about a year ago, and have been making stops off and on ever since. After paying nearly $3.00 for a loaf of bread at the grocery store, not to mention the ridiculous prices for snack cakes, this little shop has helped me stretch my grocery budget and allowed me to get the goodies that I normally pass up. I have always enjoyed the sweetheart of a lady that is always on the register when I come in. Our family will definitely miss the Hostess shop in San Leandro.
David July 03, 2012 at 05:14 PM
Union work rules, which are often more detrimental than their pension/wage demands (i.e. UAW work rules, not actual wages, killed the Detroit car companies) caused Hostess employees to be much less productive than their non-unionized competition. In addition to declining brands like Wonder Bread, this company has been on life support for years.
Tom Abate (Editor) July 03, 2012 at 06:33 PM
Sent in by a non Patch member by email: Old news. Bankruptcy court judge ruled last month that 1113 motion filed by Hostess was Denied and Hostess can NOT break the Teamsters contracts. Please if your going to "REPORT" THE NEWS insure its correct and up to date and not just pull what sounds juicy from old articles posted and repost.
Mike Feagan July 03, 2012 at 08:24 PM
My wife went by there this afternoon to make a purchase. She expressed her condolences to the fella working about possibly being layed off. He claimed he hasn't heard anything about it. Hopefully this was a vicious rumor spread by an unknowing person. Come on we all need a job !!!!!!!!!!!!!
Tonto July 04, 2012 at 03:22 AM
Jack Kincaid July 09, 2012 at 01:22 AM
Jack Kincaid I think that it is outrageous that companies are able to renege on their pension obligations! Almost all industries and companies have a life cycle (eg: Buggy Whips) and the attempt to extend this this for the benifit of a few (greedy and/or incompetent) by stealing from the earned benifits of their emplyees harkens back to the days of the Robber Barons, the more modern version of the Feudal System. Why do we need more Goverment intervention in our transactions with each other? because so many of us are CROOKs! I have noticed that the earliest laws enacted by us (before we were even a country) were to protect us from unscupulous people, eg: laws to prevent the adulteration of butter, shortaging on an order of bread etc. The need to look out for each other should be described as "creepng civilization" NOT "creeping socialism". Love to all! Jack kincaid
Paul Vargas July 10, 2012 at 04:53 AM
This place is where to go to buy bread and such. Why pay double at the grocery store?
Fred Eiger September 19, 2012 at 03:03 AM
I understand that the Teamsters have agreed to managements demands last week.


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