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Issue Date: Vol. 52, No. 4, April 2012, Posted On: 4/5/2012

Hostess Asks Unions To Freeze Salaries

Emily Jed
Dennis Raymond, Hostess Teamsters workers, Hostess union, Hostess Brands, Hostess bankruptcy, Gregory F. Rayburn, Teamsters Hostess strike, pastry business, vending machine snacks, Twinkies,Ding Dongs

IRVING, TX -- Hostess Brands Inc. has proposed a salary freeze for union workers in a move the troubled baked goods company says would save it $6.1 million a year by 2015.

The Irving, TX, maker of Twinkies and Ding Dongs filed for Chapter 11 bankruptcy in January, nearly three years after its predecessor, Interstate Bakeries, emerged from its own bankruptcy proceedings. | SEE STORY

The proposed freeze would impact about 16,000 unionized workers.

If Hostess and the unions fail to reach an agreement over the next few weeks, they will face off at a trial this month over whether Hostess can end its labor contracts, as part of its second visit to the bankruptcy court.

When Hostess first filed for bankruptcy protection, it negotiated labor concessions that changed how the company delivered products in some markets and reduced workers' base pay, saving the company about $80 million a year.

The unions have accused Hostess of failing to innovate and pursuing flawed strategies. Regarding the latest negotiations, Dennis Raymond, the leader of Hostess's Teamsters workers, said the union wants to make sure additional "sacrifices are not made in vain again due to mismanagement."

Hostess recently named Gregory Rayburn its chief executive, less than two weeks after hiring him as chief restructuring officer. | SEE STORY

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