Will Twinkies survive bankruptcy after all?
Judge sends Hostess, union back to bargaining table
- Duration 4:58
- Date Nov 19, 2012
Judge sends Hostess, union back to bargaining table
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This just in to Fox News now looks like twinkies.
Just might survive bankruptcy.
Little comfort some 181000 Americans whose jobs hang in the balance according the reporting of the Reuters news agency a judge just moments ago.
Indicated that hostess brands and the may in the -- bakers union have agreed to return to the bargaining table they'll begin mediation tomorrow.
But executives earlier indicated it's too late to save hostess.
The company behind big name brand goods like Wonder Bread ho -- and of course twinkies.
Bakery workers went on strike last week protest in huge cuts in pay and benefits.
There's with a -- -- in the strike for the company's collapse but union leaders blame what they called corporate mismanagement.
They point out that nearly a dozen executives.
Got races -- 80%.
Last year even as the company struggles to survive.
Now several firms are reportedly interested in buying off some of -- is iconic brands one of the leading contenders a firm based in Mexico.
Trace Gallagher has the news and he's alive forced this afternoon -- -- the two sides can't come up.
Comes to -- come to terms here I've tried to say what do we know about potential buyers.
While the Mexican company imagine -- called Grupo bimbo and they are the world's largest bread baker they already owns a major brands like Sara Lee and and -- and thomas' English muffins and now Forbes is reporting that a private equity firm called sun capital is also interest did sun capital tried to buy hostess earlier this year.
The bakers union hopes whoever buys it will keep the company intact and then.
Rehire union workers but the CEO of hostess says that's not likely saying and I'm quoting here.
Nobody wants to have anything to do with these old plants or these unions.
Or these contracts he went on to say that not having collective bargaining is now.
Deem most attractive part of buying host's job it's not just -- management that's lashing out against the speakers you neither.
Yet now the Teamsters which of course is hostesses largest union they're kind of pointing fingers at the bakers union as well and -- remember the Teamsters agreed that hostess has been mismanaged for several years but they also agreed to restructure the their contracts and take a pay cut.
Then pointing fingers at the bakers union said and again I'm quoting unfortunately the company's operating and financial problems were so severe.
That are required steep concessions from a variety of stakeholders but not all stakeholders were willing to be constructed so now -- you said they're going back to the bargaining table tomorrow.
But it seems like the bakers and -- very much standing their ground at this point.
Trace Gallagher live this afternoon -- thanks let's bring in John putt out now -- leaders did Michigan law professor who specializes in bankruptcy John good afternoon and thank you.
Good afternoon -- you know late in the middle of -- bankruptcy act and he talked about Sara Lee.
Went when Sara -- sold off to a company south of the border surely didn't go away any more than hostess has to go away now right.
That's right I think twinkies will be here for some time to -- good they're supposed to well they're indestructible right through that.
It down and as between who's gonna last longer the twinkies are the unions my money's on the delicious food product.
Because I think what you see here is a big build up.
Name brand recognition Wonder Bread -- people know that all around the world.
And -- hostess goes bankrupt and liquidate that they've got that very valuable name that very valuable goodwill and recipe.
That can be produced at any bakery around the world there's nothing magical -- the 33 bakeries that do it right now.
And so I think that there in trouble the unions I must say at -- they really have had enough -- just want to shut down which they may well do.
But if this is a game of bluff I think the time.
That the -- has now been called.
And if they don't reach an agreement this mediation tomorrow I hope they do if they don't -- -- -- an agreement I think you're gonna see this sold off.
To either and other domestic or even an international -- company.
Part of the public ugly off optics here is not that unusual in recent years and and understandably not pleasing to union workers.
When these executives get double and in some cases triple live -- pay raises right before going through bankruptcy that leave a bad taste in your mouth -- or seen.
It's hostess -- products.
I agree and I I don't know if this is terrible optics are there was some deferred compensation has built up but I -- imagine from a rank and file -- there and I'm being asked to take a 70% benefit cut to keep my job.
And I -- -- -- -- 80% raises I can see how -- becomes a really difficult negotiating environment.
That doesn't surprise of the parties got so fed up -- each other they had this explosion.
But the thing is in bankruptcy negotiations like this is yet -- an explosion I go to court and say we're gonna file our papers to liquidate but there's nothing set in stone they don't have to liquidate.
And it sounds like there was a cool headed judges -- want you guys just talk about this for one more day before really shut down a company that's been around you know Brady two years you for sure John -- -- from beavers in Michigan seated thank you.