Mediation has been used as a tool to negotiate contracts between the union and Hostess. The various forms of sweets, twinkies, etc that we have all grown up with will not be shut down- well not yet! Mediation will be used to assist with conflict resolution and contract negotiation between the company and its labor union. The full details are not available, but we are positive that mediation will be used as a tool to find a middle ground for both parties.
Please see the story below as presented by CNN.
Hostess shutdown on hold
By Chris Isidore and James O'Toole
@CNNMoney
November 19, 2012: 4:38 PM ET
Striking members of the Bakery Workers union at Hostess. The
company and the union have agreed to mediated talks that have postponed
plans for liquidation.
WHITE PLAINS, N.Y. (CNNMoney) -- Hostess Brands and a key union
agreed Monday to try to mediate their dispute -- an unexpected
development that could spare the company from permanently shutting down.
The Bakery Workers union, which represents 5,000 of the 18,500 employees at the maker of
Twinkies and Wonder Bread, went on strike on Nov. 9. The company had
imposed paycuts and other concessions opposed by the union's membership.
On Friday, management announced a
shutdown of Hostess and appeared before U.S. Bankruptcy Judge Robert Drain on Monday afternoon seeking approval to liquidate.
But Drain said he wanted the parties to try one last time to reach
agreement. Drain will serve as the mediator at a session scheduled for
Tuesday afternoon. Only one day of talks is set for now.
Hostess CEO Greg Rayburn said the company needs a final decision
on Tuesday. Monday's hearing on the liquidation motion was rescheduled
for Wednesday at 11 a.m.
Tom Becker, spokesman for Hostess, said operations at its plants
and distribution centers nationwide remain shutdown at this time. They
were closed Friday morning when the company announced plans to
liquidate.
A spokesman for the Bakery Workers union could not be immediately
reached for comment. A spokesman for the Teamsters union, which
represents 6,700 workers at Hostess, said he could not comment on the
mediation.
Rayburn had said on Friday that it was too late to save the
company, even if the Bakers returned to work at that time. That belief
was echoed by company attorneys in bankruptcy court Monday.
"It would be very hard for us to recover from this damage, even if
there were an agreement," said Heather Lennox, one of the lawyers for
Hostess.
But Drain was clear that he wanted every effort made to avoid
liquidation before he would sign of off the the company's motion. He
cited the 18,000 jobs at stake.
"I believe that mediation only works if the parties are willing to
do it, but I'm also strongly suggesting that they should be willing to
do it," he said.
Bakery Workers' union lawyer Jeff Freund wouldn't speculate about
the chance for a deal following the hearing. He had told the court that
the union had already spelled out what needed to be done in order to
produce a viable company.
"The court very respectfully asked that we participate in mediation and we'll honor the court's request," Freund said.
Rayburn refused to handicap the chances for a deal.
"I guess there's always a chance," he told reporters. "We'll take
all the help we can get. [But] it doesn't change our financial
situation."
But he insisted that management would be pleased if it could avoid liquidation.
"Everybody would agree that 18,500 people out of work would be about as bad a result as you can get," he said.
Exclusive: Hostess bidder wants to keep employees, bakeries
Hostess has announced its intention to sell its brands and recipes
for various products and other assets as a way to generate cash for its
creditors. Even if the products are purchased by other companies and
once again sold to consumers, most potential buyers are unlikely to
rehire Hostess employees to produce or deliver those products.
One hope for the unions and the employees was raised earlier in
the day Monday when private equity firm Sun Capital Partners disclosed
it wants to
buy Hostess as a going concern, including reopening the shuttered factories and continuing union representation of Hostess workers.
Before Sun Capital's interest was first reported by
Fortune
Monday, the unions' statements and filings seemed resigned to the fact
that Hostess will be closed down and the hourly workers will be out of
work.
The
Bakery Workers union issued a statement Saturday citing mismanagement over a number of years for the company's troubles.
Related: Hostess jobs: 'Great' to 'Not worth saving'
"Hostess failed because its six management teams over the last
eight years were unable to make it a profitable, successful business
enterprise," said the union.
But it said its members understood when they went on strike that a shutdown of the company would likely occur.
"They were well aware of the potential consequences of their
actions but stood strong for dignity, justice and respect," the union's
said.
