The recent claim by Hostess CEO Greg Rayburn that a strike by members of the Bakery, Confectionery, Tobacco and Grain Millers (BCTGM) is forcing the cake maker to close three of its bakeries is a classic example of a corporation turning on its employees in the midst of a bankruptcy restructuring.
According to documents filed with the bankruptcy court earlier this year, Hostess was planning to close at least nine bakeries as part of its reorganization plan, although the company refused until recently to disclose which bakeries it intended to close.
St. Louis, MO Mayor Francis Slay also rejected the claim by Hostess that the closures were related to the strike. “I was told months ago they were planning on closing the site in St. Louis,” said Slay. “And there was no indication at that time it had anything to do with the strike the workers were waging.”
Responding to the statement by Hostess, BCTGM President Frank Hurt declared, “The recent claim by Hostess CEO Greg Rayburn that our strike is the reason for the closure of the three bakeries is simply not true,” said Hurt. “That statement is a continuation of a disturbing pattern by the company of issuing public statements that are erroneous at best and disingenuous at worst.”
BCTGM members voted to strike Hostess after the company imposed cuts that included ending payments to the employees’ pension plan while executives awarded themselves massive bonuses. Among the raises was a 300 percent raise (from approximately $750,000 to $2,550,000) for the then-CEO of Hostess. At least nine other top executives of the company also received massive pay raises, including one who received a pay increase from $500,000 to $900,000 and another received one that brought his salary from $375,000 to $656,256.
In the latest effort by Hostess to break the strike, a Hostess spokesperson declared on November 14, “If the strikes do not end soon, we will move to liquidate the company. And we’re talking about a matter of days, not weeks.”