May 7, 2012, 4:04 PM

Hostess Sends Layoff Notices to All Workers

By Jacqueline Palank

Associated Press
Hostess Brands Inc. on Friday sent out letters notifying its more-than 18,000 workers that they could be laid off in the next two months.

The maker of Twinkies and Wonder Bread on Friday mailed out WARN Act notices to all of its employees, a Hostess spokeswoman confirmed to Bankruptcy Beat Monday. The federal WARN Act requires companies to give employees 60 days notice before closing a facility or ordering mass layoffs. However, sending the notices doesn’t mean a company is definitely going to lay off the recipients.

“The conditional WARN notices were sent to alert employees that a sale or wind down of the company is possible in the future. There are no immediate actions being taken,” spokeswoman Anita-Marie Laurie said Monday in an emailed statement. “Our goal is to emerge from bankruptcy as a growing company with a strong future—one that continues to provide good jobs with competitive wages and benefits.”

Hostess’s future remains uncertain, largely dependent upon the outcome of negotiations with its two big unions over the fate of their labor agreements as well as upon its search for new capital. Investors are to submit second-round bids for the business this week, Hostess attorney Corinne Ball told the bankruptcy court last month.

Another question mark comes in the form of a threat by the Teamsters, Hostess’s biggest union, to strike if the company wins court approval to reject their labor contracts. The Teamsters members drive the trucks that deliver the company’s baked goods to store shelves. The union and Hostess’s chief executive agree that a Teamsters strike would shut down the company.

The Teamsters on Friday told its local unions that it remains “ready, willing and able to negotiate” consensual labor changes but vowed not to “let the company force a poorly defined or inequitable turnaround plan on its employees that, despite our concessions, is destined to put Hostess out of business once and for all.”

A ruling on whether Hostess can reject its labor agreements with the Teamsters hasn’t come down yet. However, a bankruptcy judge on Friday authorized the company to reject 35 such agreements with its second-largest union, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union. Both Hostess and BCTGM President Frank Hurt said the company won’t necessarily reject the agreements now but will instead continue trying to reach a consensus.

Together, the Teamsters and BCTGM represent 14,101 of Hostess’s 18,400 active workers.

-Rachel Feintzeig contributed to this post.

Hostess Sends Layoff Notices to All Workers - Bankruptcy Beat - WSJ