3/17/08

Twinkie Teamster dues-counters somber

More than 3 1/2 years into its bankruptcy battle, the outlook for sweet snack-food maker Interstate Bakeries -- which owns the Dolly Madison plant in Columbus -- could be turning sour. Kansas City, Mo.-based Interstate Bakeries Corp. has delayed a U.S. Bankruptcy Court hearing on its exit plan for more than a month, saying it is negotiating with a potential buyer. March 12 was the original hearing date. The new one is April 23.

But the company, which filed for Chapter 11 bankruptcy protection in September 2004, said in no uncertain terms that it could be forced to split its operation into pieces.

"Under the circumstances, the only prudent course of action for the company is to embark on a dual path and explore alternatives that include the sale of the company in multiple transactions," said Craig Jung, Interstate Bakeries' chief executive officer.

The snack-food firm owns the Dolly Madison plant at 1969 Victory Drive in Columbus. The factory, which is believed to employ more than 500 people, makes and distributes a number of sugary treats.

Products being churned out of the aromatic facility include Twinkies, Zingers, doughnuts, fruit pies, angel food cake and pound cake. They are shipping directly to retailer's warehouses for their own distribution rather than delivering straight to stores.

The local facility -- Interstate Bakeries' only one in Georgia -- has survived several consolidations. The company has shut down 12 plants and cut 8,000 workers since 2004. At last count, it had 24,000 on the payroll nationwide.

But as the bankruptcy process drags out, all bets on whether or not Interstate Bakeries might survive intact could be off.

"We will immediately begin holding discussions with potential strategic purchasers, many of whom have already expressed interest in buying certain of the company's businesses and assets," Jung said a week ago.

Even the International Brotherhood of Teamsters, which represents Interstate Bakeries' transportation and delivery employees -- more than 9,000 companywide -- is taking a somber tone.

The union has been negotiating with the snack manufacturer to save employee wages and benefits, and ensure job security. The talks have been tense, however, with Interstate Bakeries insisting it is reeling from soaring health care and pension costs.

The Teamsters at one point last fall responded that they would rather see the company liquidated rather than accept deeper concessions. But that stance appears to be changing.

"Although IBC's financial position is not promising at this point, we are committed to working hard to find an acceptable plan that will save as many Teamsters jobs as possible," Richard Volpe, director of a Teamsters bakery and laundry workers group, wrote in a March 7 letter to the union's members.

"In order to do that, all of us will most likely have to make some hard decisions in the very near future," he said.

Aside from employee expenses, Interstate Bakeries management has said several other factors are putting it under the gun. Those include sagging sales, too much industry capacity, and soaring costs for ingredients, energy and fuel.

(ledger-enquirer.com)

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