The growing bankruptcy battle between Hostess management and its 19,000 employees could come to a head next month when a bankruptcy judge rules on the company’s request to scrap its current employee contracts.
Leadership at the International Brotherhood of Teamsters, which represents the majority of Hostess employees, have asked their membership to authorise a potential strike if the judge grants the company’s request, according to a memo sent to us by a current employee.
Hostess management have said that replacing the current employee contracts with new cheaper ones is the only way that the battered company will be able to come out of bankruptcy. But union officials are calling Hostess’s demands — which include a five-year wage freeze and scrapping employer contributions to health and pension plans — unreasonable, according to the memo.
This latest development does not bode well for the future of this once-iconic company, best known for Twinkies and Wonder Bread. Management claims they need these concessions to cut labour costs, but if the court approves the new contracts and employees go on strike, replacing employees would create a whole new set of costs in order to continue operations.
Union officials acknowledge this tension in the memo, writing that a strike “would almost certainly put Hostess Brands out of business and cost thousands of jobs.”
This whole debacle just goes to show that managers have to act carefully when trying to force less-than-desirable contracts on their employees.
Check out the memo below.
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