Reprieve for Twinkies as Hostess, union go to mediation
Twinkies may not die that easily after all.
Hostess Brands Inc. and its second-largest union will go into mediation in a bid to resolve their differences, meaning the company won't go out of business just yet. The news came Monday after Hostess moved to liquidate and sell off its assets in bankruptcy court, citing a crippling strike last week.
The Irving, Texas-based company, maker of Ding Dongs, Ho Hos and Wonder bread, employs 149 people at its Melville, Hicksville and Bohemia stores, which double as distribution centers, a Hostess spokesman said. At the Melville store Monday, customers and workers expressed hope that a deal would be reached.
The bankruptcy judge hearing the case said Monday that the parties haven't gone through the critical step of mediation. The judge noted that the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents about 30 percent of Hostess workers, went on strike after rejecting the company's most recent contract offer, even though it never filed an objection to it.
"Many people, myself included, have serious questions as to the logic behind this strike," said Judge Robert Drain, who heard the case in the U.S. Bankruptcy Court in the Southern District of New York in White Plains.
Hostess and the union agreed to mediation talks, which are expected to begin Tuesday.
"Maybe all those people will end up saving their jobs, and I'll get my Twinkies," said Gary Wolf, 69, a Deer Park man who hopes to celebrate his 46th wedding anniversary next Monday over Twinkies with his wife, Kathy. He was disappointed to find none of the sweet treats in the company's Melville store, which hasn't stocked them for weeks.
Hostess employees agree. "I don't think the union, or anybody, wants 18,000 people out of work, and I don't think the company wants to go out of business," said store manager Jim Fusco, 58, who started as a loader 38 years ago and worries about losing his salary and health insurance.
In an interview after the hearing Monday, chief executive Gregory Rayburn said there is enormous financial pressure to come to an agreement with the union by the end of the day Tuesday. He said it is costing Hostess $1 million a day in overhead costs to wind down operations. But even if a contract agreement is reached, it is not clear if all 33 Hostess plants will go back into operation.
"We didn't think we had a runway, but the judge just created a 24-hour runway" for the two parties to come to an agreement, Rayburn said.
With Maura McDermott and Carrie Mason-Draffen