Striking bakers at the Billings Sweetheart Bakery were walking the picket line Monday when Hostess Brand Inc.’s chief executive Gregory Rayburn announced he will permanently close three Sweetheart Bakeries.
Rayburn eliminated 627 jobs at bakeries in Seattle, St. Louis and Cincinnati, Ohio, because of the national bakers strike that started in Kansas on Friday. He threatened to close down the entire company unless the bakers return to work.
Members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union walked off their jobs to protest Hostess cutting wages and benefits 27 to 32 percent, including an immediate 8 percent pay cut, and shifting at least 20 percent more of health care costs onto employees.
About 120 employees at the Billings bakery, the only Sweetheart bakery in Montana, stopped making products such as WonderBread and Twinkies and joined the strike at 6 p.m. on Saturday. Local strikers said the human resources director told them Monday morning that the Billings bakery would shut down if they didn’t return to work.
While walking a cold picket line, the bakers said they hope the strike will force Hostess Brands to sell off its assets so their jobs can be saved from what they called serious mismanagement.
“We’re happy to force the company to liquidate, so somebody can come in and buy it, so there’s a future for all the workers,” said Eusebio Diaz, Billings business agent for BCTGM Local 466.
Bakeries were still producing product with non-striking workers and managers, said company spokeswoman Anita-Marie Laurie in Los Angeles. But local strikers pointed to roof vents with no steam coming out as proof that the Billings bakery wasn’t operating.
Sweetheart Outlet stores, including the three in Billings, remain open.
Before Hostess filed for bankruptcy in 2004, the union represented 10,000 workers, a workforce that has been cut in half by 21 plant closures, Diaz said.
In January, the Irving, Texas, company again filed for Chapter 11 reorganization, its second bankruptcy in eight years. Over the last decade, six chief executives have led Hostess, now owned by a private equity firm, Ripplewood Holdings, and two hedge funds, Silver Point Capital and Monarch Alternative Capital.
After the last round of labor concessions, the company saved about $110 million, local strikers said, but failed to re-invest in equipment upgrades. Some mixers at the Billings plant are 50 years old, said David Coles, Local 466 vice president who has been a Sweetheart baker for a dozen years.
“It’s just the dishonesty of the company,” said Coles. “They promised us we’d get new equipment. Instead, they gave raises to their top managers.”
In April, after creditors objected to the pay packages, Rayburn ended a pay raise of up to 80 percent granted to a handful of his top executives just before the company filed for another bankruptcy, according to the Wall Street Journal.
Rayburn said Hostess won’t reopen its latest labor contract, which was narrowly approved by the Teamsters in September. So far, the majority of Teamsters haven’t honored the bakers’ strike, but are reviewing the situation, according to the WSJ.
The bakers union refused to accept the latest contract, but the bankruptcy judge gave Hostess authority to impose it anyway. The bakers union represents about 5,680 workers or 30 percent of Hostess employees. Bakers at about two-thirds of the Sweetheart bakeries were on strike.
Strikers who hope Sweetheart properties can be sold to other companies are forgetting that the industry already has too many bakeries so buyers will be scarce, Rayburn said. The entire company will be closed down, he said, if the “widespread strikes cripple our business.”
Despite threats that their jobs would be eliminated, employees walking the Billings picket line Monday refused to return to work.
“The company had taken away too many benefits,” said Larry Trettenbach, who has worked at the bakery for 32 years. “And they don’t follow the contract.”
Last year, Hostess stopped paying into the employee pension plan, said Linda Trettenbach, who is married to Larry, and who also traded her paycheck for $25 a day in strike pay.
“We didn’t even know about it until six months ago,” she said, adding that Sweetheart also is losing local business to Franz bakeries based in the Pacific Northwest.