AP: Mediation (ordered? UPDATE agreed to) in Twinkie fight

by Datechguy | November 19th, 2012

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AP: Mediation (ordered? UPDATE agreed to) in Twinkie fight

AP reports the fol­low­ing:

The bank­ruptcy judge hear­ing the case says that the par­ties haven’t gone through the crit­i­cal step of medi­a­tion and asked the lawyer for the bakery’s union to ask his client, who wasn’t present, if he would agree to participate

And there are inter­ested parties

Bimbo has already sniffed around the bank­ruptcy pro­ceed­ings that have haunted Host­ess for a decade, in a bid to fur­ther expand its North Amer­i­can port­fo­lio and pad its $4 bil­lion net worth. Bimbo report­edly put in a low-​ball bid of $580 mil­lion a few years ago, Forbes reports, and may be rewarded for that move since the Host­ess kit-​and-​kaboodle may fetch more like $135 mil­lion today.

But the big ques­tion is whether the same prob­lems that haunted Host­ess – high sugar prices tied to US trade tar­iffs, chang­ing con­sumer tastes, and union push­back against labor con­ces­sions – will squeeze what­ever profit is left in the brands.

Espe­cially if a Mex­i­can buyer is involved, pro­duc­tion may go the way of the Brach’s and Fan­nie May candy con­cerns: south of the bor­der. With US sugar tar­iffs set arti­fi­cially high to pro­tect Florida sugar-​growing con­cerns, a non-​unionized shop with access to lower-​priced sugar in Mex­ico could be the Twinkie life­line, econ­o­mists suggest.

but it’s not just a ques­tion of los­ing the tar­iffs it’s los­ing the unions:

First, this devel­op­ment has no small amount of irony. The labor move­ment has attacked Repub­li­cans for many long years for off-​shoring jobs in the name of free trade. Thanks to the bak­ers’ union, we may end up with almost 19,000 jobs head­ing south of the bor­der, in the fac­to­ries of Grupo Bimbo. The pro­tec­tion­ist sugar tar­iffs that both par­ties have extended and cham­pi­oned may end up hav­ing their own ironic role in these job losses, too.

Will Twinkies sur­vive? If we are to believe the unions then no, because it’s all about demon­strat­ing power at least that’s what they said.

Any­way I’ve bro­ken open a box of devil dogs but we’ll ration the Funny bones etc for now until we know for sure.

If it works out there are going to be a lot of peo­ple who spent a for­tune of Twinkies to put on eBay or peo­ple who have boxes on eBay who are going to feel like fools.

Update: No answer at the local Host­ess thrift shop, might be too late for them.

Update 2: Both side now have agreed to medi­a­tion, no word if that means the thrift store re-​opens but got some bar­gains Sat­ur­day.

Host­ess, its lenders and the Bak­ery, Con­fec­tionery, Tobacco Work­ers and Grain Millers Inter­na­tional Union (BCTGM), agreed to go into medi­a­tion at the urg­ing of Bank­ruptcy Judge Robert Drain of the South­ern Dis­trict of New York, who urged medi­a­tion rather than a more expen­sive, pub­lic hear­ing regard­ing the company’s liquidation.

My desire to do this is prompted pri­mar­ily by the poten­tial loss of over 18,000 jobs as well as my belief that there is a pos­si­bil­ity to resolve this mat­ter,” Drain said.

Does the thrift shop return?

Update 3: The key words from the Host­ess web site

PRO­DUC­TION REMAINS SHUT DOWN.

AP reports the following:

The bankruptcy judge hearing the case says that the parties haven’t gone through the critical step of mediation and asked the lawyer for the bakery’s union to ask his client, who wasn’t present, if he would agree to participate

And there are interested parties

Bimbo has already sniffed around the bankruptcy proceedings that have haunted Hostess for a decade, in a bid to further expand its North American portfolio and pad its $4 billion net worth. Bimbo reportedly put in a low-ball bid of $580 million a few years ago, Forbes reports, and may be rewarded for that move since the Hostess kit-and-kaboodle may fetch more like $135 million today.

But the big question is whether the same problems that haunted Hostess – high sugar prices tied to US trade tariffs, changing consumer tastes, and union pushback against labor concessions – will squeeze whatever profit is left in the brands.

Especially if a Mexican buyer is involved, production may go the way of the Brach’s and Fannie May candy concerns: south of the border. With US sugar tariffs set artificially high to protect Florida sugar-growing concerns, a non-unionized shop with access to lower-priced sugar in Mexico could be the Twinkie lifeline, economists suggest.

but it’s not just a question of losing the tariffs it’s losing the unions:

First, this development has no small amount of irony.  The labor movement has attacked Republicans for many long years for off-shoring jobs in the name of free trade. Thanks to the bakers’ union, we may end up with almost 19,000 jobs heading south of the border, in the factories of Grupo Bimbo.  The protectionist sugar tariffs that both parties have extended and championed may end up having their own ironic role in these job losses, too.

Will Twinkies survive?  If we are to believe the unions then no, because it’s all about demonstrating power at least that’s what they said.

Anyway I’ve broken open a box of devil dogs but we’ll ration the Funny bones etc for now until we know for sure.

If it works out there are going to be a lot of people who spent a fortune of Twinkies to put on eBay or people who have boxes on eBay who are going to feel like fools.

Update: No answer at the local Hostess thrift shop, might be too late for them.

Update 2: Both side now have agreed to mediation, no word if that means the thrift store re-opens but got some bargains Saturday.

Hostess, its lenders and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), agreed to go into mediation at the urging of Bankruptcy Judge Robert Drain of the Southern District of New York, who urged mediation rather than a more expensive, public hearing regarding the company’s liquidation.

“My desire to do this is prompted primarily by the potential loss of over 18,000 jobs as well as my belief that there is a possibility to resolve this matter,” Drain said.

Does the thrift shop return?

Update 3: The key words from the Hostess web site

PRODUCTION REMAINS SHUT DOWN.

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