Business & Tech

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).

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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.

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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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