Hostess, union fail to reach deal in mediation

[WestVirginiaRebel]

Yahoo News:

(Reuters) - Hostess Brands Inc, the bankrupt maker of Twinkies, said on Tuesday that it failed to reach a deal in mediation with the Bakery, Confectionary, Tobacco and Grain Millers Union.

The company said it will have no further comment until a hearing scheduled for Wednesday before the U.S. Bankruptcy Court for the Southern District of New York.

A representative of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) did not immediately respond to a request for comment.

The ailing company, which also makes Wonder Bread and Drake's cakes, sought permission from bankruptcy court on Monday to liquidate its business, claiming that its operations were crippled by the bakers' strike and that winding down was the best way to preserve its dwindling cash.

But Bankruptcy Judge Robert Drain of the Southern District of New York urged the sides to go into a private mediation, prompted by a desire to protect the more than 18,000 jobs at stake.

The 82-year-old Hostess runs 33 bakeries, 553 distribution centers, about 5,500 delivery routes and 527 bakery outlet stores throughout the United States. Bakery operations ceased last week, though product deliveries to stores continued in order to sell already-made products.

The company has blamed union wages and pension costs for contributing to its unprofitably. Hostess Chief Executive Gregory Rayburn has also said the company's labor contracts have deterred would-be bidders for the company and its assets.

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The drama continues...