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About Northwest labor press. (Portland , Ore.) 1987-current | View Entire Issue (Dec. 7, 2012)
...Hostess relieved of pension obligation (From Page 3) Can you imagine the bankruptcy judge ordering Cargill to sell its flour to Host- ess at a 27 percent discount? Yet that’s what Drain, a former Wall Street lawyer, did to union workers Oct. 3 in an order allowing Hostess to unilater- ally impose changes to the BCTGM’s collective bargaining agreements. Weeks of brinksmanship followed. BCTGM warned that members would strike if Hostess imposed its terms, and Hostess warned that if they struck, the company would ask the court for per- mission to close permanently and liq- uidate assets. Hostess imposed the new terms first on three bakeries that it planned to close anyway — St. Louis, Cincinnati, and Seattle. Union members held off striking, knowing it would give the company an excuse to close those plants. But when Hostess then moved to impose terms company-wide, workers struck Nov. 9 at 24 production facili- ties. “[Members] are not willing to take draconian wage and benefit cuts on top of the significant concessions they made in 2004 and give up their pension so that the Wall Street vulture capital- ists in control of this company can walk away with millions of dollars,” Hurt de- clared in a Nov. 12 statement explain- ing the strike. As one Hostess worker wrote in the online magazine Daily Kos: “It will be hard to replace the job I had, but it will be easy to replace the job they were try- ing to give me.” Hostess announced it would move to liquidation if employees did not re- turn to work by 5 p.m. Nov. 15. On Nov. 16, it announced closure. It’s the end of an 85-year-old bakery business with 33 bakeries, 565 distribution cen- ters, 570 bakery outlet stores, and ap- proximately 5,500 delivery routes — and the loss of 18,500 jobs, including those of 15,000 union members. Seventeen of those jobs are Team- sters drivers in Portland. On Nov. 21, Judge Drain approved the liquidation plan, and on Nov. 29, he granted a request by Hostess for $1.75 million in bonuses to 19 officers and high-level managers who are needed to facilitate the sale of the company’s as- sets. Drain also relieved Hostess of its $944.2 million in withdrawal liability owed to the Bakery & Confectionery Union & Industry International Pen- sion Fund — a decision that will harm Hostess’ unionized competitors and tens of thousands of their employees. That’s because Hostess was the biggest employer in the union’s multi-em- ployer pension plan. Under federal law, multi-employer pension plans are still responsible for workers’ pensions when an employer goes out of business or otherwise withdraws. The federal gov- ernment’s Pension Benefit Guaranty Corporation doesn’t step in with multi- employer plans unless they’re nearly insolvent. Hostess’ collapse means the Bakery Pension Fund has to trim extra benefits for 53,000 retirees and an equivalent number of active members. And it means that still-existing em- ployers (like Franz and Kroger in the Portland area) are stuck paying a sur- charge to make up for Hostess’ with- drawal. The Bakery Pension Fund was at healthy funding levels — despite the 2008 stock market downturn — until Hostess halted contributions last Au- gust. Now, under a pension rehabilita- tion plan that went into effect in No- vember, employers are paying a 5 percent surcharge, which will double Jan. 1. For an employer like Franz Bak- eries, the 10 percent surcharge equals 57 cents an hour per worker, said BCTGM Local 114 Financial Secre- tary Terry Lansing. As Hostess prepares to liquidate — selling off trucks and bakeries and the right to make its famous brands — it’s revealing what management has cho- sen to publish on its web site. Hopes for the swift resurrection of Twinkies un- der new brand owner? Thanks to cus- tomers for 85 years of business? No, Hostess Brands Inc. uses its most valu- able online real estate to take a parting shot at the union: “We are sorry to an- nounce that Hostess Brands, Inc. has been forced by a Bakers Union strike to shut down all operations and sell all company assets.” “Hostess management wants to blame our members for the demise of the company,” says Hurt. “The truth is that had it not been for the valiant ef- forts of our members over the last eight years, including accepting significant wage and benefit concessions after the first bankruptcy, this company would have gone out of business long ago.” EE R F BARGAIN COUNTER Free classified ads to subscribers DEADLINE: Friday prior to publication Published 1st and 3rd Fridays Now accepting e-mails Send to: Michael492@comcast.net Mail to: NWLP, PO Box 13150, Portland OR 97213 (Please include union affiliation) • 15-20 words • No commercial or business ads • 1 ad per issue • All lower case (NO CAPITAL LETTERS, PLEASE) • Ads MUST include area code or they will not be published A UTOMOTIVE ‘98 gmc samona sls ext cab, 1 owner, custom wheels/plus 4 winter tires on alloy rims, 97k mi, $5,800 obo 503-622-0899 ’52 FoRD 4DR, $2,500 oBo. 503-289- 0066 ’89 F-150 PU, 300ci, 6 cyl/5spd, excellent condition, list of repairs too large to list, $3,500. 503-679-6483 H OUSING RocKaWaY ocean front 503-777-5076 5 bdrm, 2 bath, call for fisherman’s special, http://home.comcast.net/~rockaway.beach RocKaWaY BEacH rental, 3 bed, 2 bath, sleeps 10, Jacuzzi, 5 min to beach/shops. 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Call Grady Storms, Broker, RE/MAX equity group, 503-495-4632 for more information PAGE 10 NORTHWEST LABOR PRESS www.legalshield.com/info/randallnix DECEMBER 7, 2012
