Home Up Contents




News stories of companies that have contracts with 734 or affect members.

Butternut bread-maker closing Chicago bakery

129 employees to lose their jobs

By John Schmeltzer
Tribune staff reporter
Published September 24, 2004

The baker of Butternut Bread announced Thursday that it will shut down its Chicago plant in October.

Chicago Baking Co., a unit of Lewis Bakeries Inc. of Evansville, Ind., said the nation's fixation on low-carbohydrate diets forced its hand.

The news came on the heels of a bankruptcy announcement Wednesday by commercial baking giant Interstate Bakeries Corp., which makes Wonder Bread and Hostess Twinkies, citing similar market pressures.

Chicago Baking said it will turn off the ovens at its bakery at Garfield Boulevard and State Street on Oct. 23. It said the 129 bakery employees will be casualties of the decision.

"The bakery is being closed because consumption of grain-based foods has declined in recent years due to changing American lifestyles," said Joseph Schulz, vice president of human resources for Chicago Baking.

Major commercial bakeries, which long have relied upon their historic white-bread brands, say they have been hard hit by the Atkins and South Beach diets, which advocate steep reductions in carbohydrate consumption.

This summer a giant Entenmann's bakery in Northlake, which employed about 400 people, shut its doors, as plant owner George Weston Bakeries Inc. announced plans for a sweeping reorganization of its national operations.

Interstate Bakeries was attempting to reorganize when it filed for bankruptcy on Wednesday. The company has said it needs to further reduce capacity.

Locally, Interstate operates a Wonder Bread bakery in Hodgkins and a Hostess Cake bakery in Schiller Park, and it also runs more than a dozen thrift stores in the Chicago area. In addition, it has a bagel bakery in Milwaukee, Butternut bread bakeries in Peoria and Decatur and a combined Wonder-Hostess bakery in Davenport, Iowa.

Jennifer Anderson, a food science and human-nutrition professor at Colorado State University, said bakeries are suffering excessively from a radical shift to low-carb diets.

Anderson said the public is being misled by diets that advocate "fixes of losing weight quickly rather than looking at overall needs of the body for good health."

"People are buying hamburgers and throwing away the buns, and we don't want that," Anderson said.

But, she said, bakeries need to adapt more quickly to the changing tastes of consumers.

"Bakeries need to think about diversifying the types of bread they make. We're not saying no-carbs. We're not against white bread. I eat white bread. But I also want to eat whole wheat bread," she said.

Lack of new products, in part, is behind the demise of the Butternut plant here.

Lewis Bakeries has shifted some of its efforts to producing a whole wheat bread sweetened with Splenda under the Healthy Life brand, but the Chicago plant was baking only Butternut bread.

As a result, it will be an end of an era for residents surrounding the Butternut bakery, who for decades have gone to bed smelling baking bread.

At one time at least four bakeries operated within blocks of the Butternut plant, including a Silvercup bread bakery nearby on Garfield, a Wonder bakery on 57th Street and the Wolpers Bakery on 55th Place, where rye bread was baked.

Schulz said Butternut bread will be supplied to the Chicago market by one of Lewis' six other bakeries. Distribution operations handled by a warehouse on the Northwest Side will not be affected by the closing.

Lewis Bakeries acquired the plant in 1997 from Interstate Bakeries.

Bakery ends production
Entenmann's Northlake plant to be distribution center, office, store

By Rob Kaiser
Tribune staff reporter
Published July 31, 2004

The low-carb lifestyle and consolidation in the baking industry came crashing down Friday at the Entenmann's plant in west suburban Northlake, where production of bagels, danish and other bakery items ended abruptly.

Although the facility will continue to operate as a distribution center, regional office and outlet store, 333 of the plant's 420 workers were laid off after an employee meeting first thing Friday morning.

"We just happen to be making the wrong products at the wrong time in probably the wrong place," Bob Sanders, vice president of operations, told the hundreds of employees who sat on folding chairs at the plant's shipping area Friday morning.

Employee reaction to the closing was fairly muted. Many said the closing was not a surprise.

George Weston Bakeries Inc., which owns the plant, told workers several months ago that a study was under way to determine if it would remain open. Employees noted that flour and other ingredients had not been replenished recently.

"Psychologically everybody was prepared, [but] I'm angry inside," said T.J. Grewal, a mechanic who worked at the bakery for 24 years, as other employees hugged and shook hands goodbye outside the plant.

Lou Minella, a George Weston Bakeries spokesman, said several factors contributed to the closing, including lower demand for baked goods because of low-carb diets and higher costs for everything from energy to raw materials such as cooking oil, butter and eggs.

The company also cited higher costs for employees' health and pension benefits.

Minella said the Northlake plant was selected for closing because it was more expensive to operate than other facilities in the company.

In March, bagel production for southeastern United States markets was shifted from Northlake to a new facility in Orlando and production of Little Bites, mini-brownies, muffins and cookies for school lunches, went to an Albany, N.Y., plant.

"We do believe in the concept of focused facility, and [Northlake] certainly was a big, older facility that wasn't focused on a particular product line," Minella said.

Production of the plant's remaining products will now shift to other Weston facilities and to bakeries operated by other companies.

John Speaker, the plant's general manager, told employees Friday that the facility had been operating at 50 percent of capacity. The company considered making sliced bread, buns or other products there, he said, but none of those options made sense financially.

The laid-off employees will continue being paid for the next 60 days, as is required under federal law.

The company is also holding a lunch for employees on Monday when they can return to the facility and collect their belongings.

Annie Horton, a 20-year veteran of the plant, said she would look for a new job.

Her husband is retiring Saturday and she said she needs a job so her family has health insurance.

"If it wasn't for that, I would stay home with him," Horton said.

While she expects to find a job, Horton doesn't think she'll find another one that pays $17 an hour.

Other employees are not as optimistic about finding a new job.

"At my age it might be kind of rough," said 55-year-old Domes Little, who worked at the plant for 14 years.

I.B.C. introduces Home Pride low-carbohydrate bread

(Bakingbusiness.com, January 22, 2004)
by Josh Sosland
KANSAS CITY — Interstate Bakeries Corp. this week introduced Home Pride CarbAction bread throughout its market distribution area.

Available in white and multi-grain varieties, the bread contains 10 grams of total carbohydrates and 4 grams of dietary fiber per serving, or 6 grams of net carbohydrates.

The white bread ingredients include water, enriched wheat flour, modified wheat starch, wheat gluten, soy fiber and wheat protein isolate.

The bread appeared on supermarket shelves in Kansas City at a retail price of $2.79. Mark Dirkes, I.B.C.'s senior vice-president of corporate marketing, said the company will promote the new product with cents-off deals.

Mr. Dirkes said I.B.C. soon will add a wheat variety to the line.

"What we think distinguishes this product from competitive products is that this one really tastes better," he said. "Our entire focus, since we weren’t the first to the market, was that we wanted to taste better."

James R. Elsesser, chairman and chief executive officer of I.B.C., first announced plans for the low-carbohydrate bread and a super-premium bread line in December.

Mr. Dirkes said I.B.C. remains on track for introducing the super-premium bread later in 2004.

Dominick's to close 12 stores in March

790 staffers await word on job cuts

By Delroy Alexander
Tribune staff reporter
January 13, 2004

Stores to be closed:
600 W. Liberty, Wauconda
1919 Skokie Valley, Highland Park
1241 Rand, Arlington Hgts.
2855 Kirchoff, Rolling Meadows
250 S. Randall, Elgin
1440 Irving Park, Hanover Park
4014 W. Lawrence, Chicago
3649 N. Central, Chicago
7050 S. Pulaski, Chicago
3250 W. 87th, Chicago
11024 S. Cicero, Oak Lawn
5556 W. 159th, Oak Forest

Sources: ESRI and Dominick's.

Dominick's will close 12 poorly performing stores, the grocer announced Monday, two months after it failed to find a buyer for the troubled supermarket chain.

Eight suburban and four Chicago stores--with 290 full-time and 500 part-time employees--are scheduled to close March 13, the company said.

Dominick's would not say how many of the jobs will be eliminated.

"Today's announcement marks a difficult but necessary step toward a better Dominick's for Chicagoland," said Randall Onstead, the recently appointed Dominick's president.

"Closing these stores will make Dominick's healthier and allow us to focus on growing the business and bringing new products and services to consumers," he said.

Late last year the company said it would close stores. Company sources said it was considering shuttering between 10 and 25.

The closings announced Monday will shrink Dominick's presence to 101 stores from 113, all in Illinois, far fewer than rival Jewel Food Stores, which operates about 200 stores, most of them in the Chicago area.

Union leaders representing workers at the stores said the firm signaled that cuts would be necessary to help make the remaining stores profitable.

"The closing of these Dominick's stores is certainly not welcome news," the United Food and Commercial Workers locals representing most store workers said in a written statement. "The No. 1 priority of UFCW Locals 881 and 1546 remains to protect our members during this time of transition."

Dominick's, which employs about 11,500 people locally, said most employees at the affected stores could seek positions at other supermarkets, though they may displace other, more junior, staffers.

Most employees are eligible to receive severance pay if they choose to leave the company, Onstead said.

Since acrimonious labor talks ended in November 2002, Dominick's staffers have been working without a long-term labor agreement, but the UFCW has worked out a day-to-day arrangement with the company.

As part of its severance package, Dominick's will outline to workers details about how it plans to allow more senior staffers to transfer to other stores.

The existing labor terms demand that those with seniority over newer employees be given the first refusal of open jobs and positions taken recently by junior staffers, labor sources said.

"It's essentially last in, first out," said one UFCW official. "That means that if I have just joined in a position at a nearby supermarket and my post mirrors the job of a more senior person at one of the stores to be closed, he could take my job."

Onstead was named to head Dominick's in early November, when Safeway announced it would try to salvage the chain.

Safeway earlier had reached a tentative agreement to sell Dominick's at a steep loss, but the unidentified winning bidder could not negotiate a new labor contract with the union.

After paying $1.9 billion in cash and debt for Dominick's in 1998, Safeway introduced a series of changes that industry workers said alienated shoppers as well as workers.

The company also spent heavily to revamp stores. Safeway pumped $455 million into the business, closing 21 stores but opening 24 and remodeling 35 other supermarkets.

For shoppers, news of the closings was distressing.

"The people in the pharmacy are my friends," Lidia Jattkowski, 81, said of the Dominick's store at 4014 W. Lawrence Ave. on the Northwest Side. "They know me by name. They know all about my prescription insurance. I'm very worried, I don't know where I'm going to go."

Mila Voronenko, 43, said she has shopped at the 1919 Skokie Valley Rd. store in Highland Park, which is less than five minutes from her house, for three years. Now, a round-trip drive to the closest Jewel will take 20 minutes more. "I'm not happy at all," she said.

But other observers said the move to close poor performers was a sign that Safeway has committed to rebuilding its Chicago operation.

"The chances of success are better than average," said David Livingston, head of DJL Research, a Wisconsin-based retail consultant. "In the past, they were just complacent because they thought they would sell their division. But now they have made a commitment and put new people in place, so I think they have got a better chance for success."

Whatever the case, the latest moves will hurt the California-based parent company's finances, at least in the short term.

In connection with relinquishing store leases, Safeway will book a pretax charge of $50 million to $55 million in the first quarter.

But cutting the operating losses at the closed stores will "benefit earnings immediately," the company said in its statement announcing the closings.

In 2002, after the labor dispute, sales dipped and Dominick's posted a pretax loss of $787.9 million. Safeway was forced to write off $584 million in goodwill and another $201 million for expected losses on the sale of the chain that failed to materialize.

Interstate will test shipping directly to Wal-Mart distribution sites

(Bakingbusiness.com, September 23, 2003)
by Gordon Davidson

KANSAS CITY — In a test program, Interstate Bakeries Corp. soon will ship products to distribution centers of Wal-Mart Stores, Inc. instead of through its traditional direct-store-delivery system.

James R. Elsesser, chief executive officer of I.B.C., disclosed plans for the experimental shipment program in remarks Tuesday at the annual meeting of Interstate shareholders in Kansas City.

At the meeting, Mr. Elsesser and Michael D. Kafoure, president and chief operating officer, spelled out changes I.B.C. is studying to produce and distribute products more efficiently.

Noting Interstate's position as a market leader in wholesale baking, Mr. Elsesser told shareholders, "Now is the time for us to be a market leader in changing and improving the way the industry does business."

Mr. Elsesser said the company's extended-shelf-life program "opens the door for fewer and larger distribution centers." He added, "We also see some distribution being shifted from the existing route system to the warehouse."

In the next 30 days, Mr. Elsesser said, I.B.C. will test "a high-volume product line" with warehouse deliveries for a number of Wal-Mart Supercenters and Neighborhood Markets in Texas.

"It's only a test, but it's a major effort on our part," he said.

In discussing what he said were among other "promising opportunities," Mr. Elsesser added that Interstate needed "fewer and more automated plants to bring fixed costs under control."

In the company's quarterly conference call Friday, Mr. Elsesser said Interstate was reviewing its production capacity and operating costs and anticipates "closing several plants and investing in more automation."

Lewis Brothers' Lesh re-elected chairman of American Bakers

(Bakingbusiness.com, September 23, 2003)
by Josh Sosland

CLIFTON, N.J. — The American Bakers Cooperative, Inc., has re-elected Roger Lesh, senior vice-president of Lewis Bros. Bakeries, Inc., Evansville, Ind., as its chairman.

The election took place Sept. 16 at the annual directors/shareholders meeting in Newark, N.J. The cooperative elected Mark Dirkes, senior vice-president, Interstate Bakeries Corp., Kansas City, as vice-chairman of the board.

Re-elected to the cooperative’s board were Ronald Barlow, regional manager, George Weston, Williston, Vt.; Gloria Kozyra, president/secretary, American Bakers Cooperative; and Mr. Dirkes.

The cooperative elected David C. Scott, regional vice-president, Flowers Bakeries L.L.C., Thomasville, Ga., as a new director.

Associated Press
Interstate Bakeries Plans Plant Closings
Friday September 19, 4:26 pm ET

Interstate Bakeries Plans Plant Closings, Reports 59 Percent Drop in Earnings


KANSAS CITY, Mo. (AP) -- Interstate Bakeries Corp., the maker of Wonder bread and Twinkies, plans to close an unspecified number of plants and jobs over the next three years in an effort to reduce costs after reporting a 59 percent drop in first-quarter earnings.

"We have to automate and we will. We have to rationalize production," James R. Elsesser, chief executive officer said Friday in discussing the latest financial results. "We have too much excess capacity and we have a plan to fix that over time."

Although company spokesman Mark Dirkes would not say how many plants would be closed, he said "it will not happen in one fell swoop."

Interstate Bakeries has 58 bakery plants and 34,000 employees.

The nation's largest wholesale baker said it earned $11.2 million, or 25 cents a share, for the quarter that ended Aug. 23, down from $27.13 million, or 60 cents a share, a year ago.

Analysts surveyed by First Call expected earnings of 23 cents per share.

Sales slipped to $831 million from $839 million a year earlier.

Sales of sweet goods, such as Twinkies, were off 6.6 percent, and total bread volume was down 3.4 percent. Branded bread sales were off 7.2 percent from last year.

Despite the declines, Interstate Bakeries shares climbed $1.42, or 11 percent, to close at $14.92 on the New York Stock Exchange.

Elsesser said new pricing and promotion strategies have shown promise, and others will follow.

"New advertising campaigns for branded breads and sweet goods are being introduced this quarter," he said. "Our ad campaigns will feature Wonder bread and Hostess cake nationally, Home Pride Country breads in the Midwest and regional brands in select areas."

Elsesser also said the company is addresssing rising costs.

"The most pressing goal driving all of us at IBC is to return our company to acceptable levels of profitability," he said.

Interstate Bakeries charts course for business adjustments

(Bakingbusiness.com, September 5, 2003)
by Gordon Davidson

KANSAS CITY — Interstate Bakeries Corp. has not adjusted quickly enough to a changing marketplace but is taking short- and long-term actions to improve its performance, James R. Elsesser, chief executive officer, wrote in a letter to shareholders in the company's annual report.

Mr. Elsesser, reviewing plans of the board of directors to put I.B.C. "back on course," indicated that in three years, I.B.C. should be a much different company than it is today.

Hit by flat sales and higher-than-expected costs, net income of Interstate Bakeries in the fiscal year ended May 31 fell to $27.5 million, equal to 62c per share on the common stock, down sharply from $69.8 million, or $1.39 per share, in fiscal 2002. Net sales totaled $3.5 billion, down slightly from the previous year.

"Some of our company's woes are directly attributable to the tough economic climate," Mr. Elsesser said. "Indeed, the entire industry is under intense pressure due to rising health and pension costs, the increased cost of ingredients and energy spikes.

"But the economy is not entirely to blame for this year's results. The marketplace is changing, and we have not adjusted quickly enough. Consumers are becoming more resistant to price increases and less responsive to promotional activity. Actions that have worked well in the past are having a diminished impact now. We are losing momentum and face the challenge of reversing that trend."

Interstate's immediate action plan includes a number of market tests to determine what's right in today's marketplace, Mr. Elsesser said. The information gained from these efforts should help identify ways to streamline operations and stabilize unit trends. The programs include:

· Several market tests of an Every Day Low Price pricing strategy for both bread and cake product lines.

· A market test of the impact of reducing stock-keeping units.

· An in-depth review of promotional tactics.

· A comprehensive test of single-serve cake packaging.

Interstate's SOAR (Systems Optimization and Re-Engineering) Program should identify long-term strategies, Mr. Elsesser pointed out.

"With the many challenges we currently face, it is an extremely important undertaking for our company's long-term competitiveness," he said.

Mr. Elsesser said that during the next three years, Interstate intends to implement changes designed to:

· "Re-engineer our business processes.

· "Allow us to become more efficient and to achieve a more focused, company-wide direction.

· "Rationalize our investment in production, distribution and administrative functionality.

· "Reduce the ongoing cost of supporting this infrastructure.

· "Identify growth opportunities and adjust the brand portfolio to follow demographic shifts and altering consumer preferences."

In describing Program SOAR as a major business transformation, Mr. Elsesser added, "It will affect our strategic outlook. Our primary focus is to establish operational excellence. In three years, I.B.C. should appear much different from what it is today."

From an operational perspective, Interstate is particularly focused on the cost side, both short- and long-term, Mr. Elsesser said.

"Under Program SOAR, the I.B.C. operating team is addressing nine initiatives identified as major areas for profit improvement," he said. "Short-term, we are looking to become more efficient — and cost-conscious — by reviewing production capacity in our system."

Interstate in fiscal 2003 closed 96 thrift stores and announced the closing of bakeries in Boise, Idaho; Montebello, Sacramento and Castroville, Calif., and Tampa, Fla.

Those plant closings do not represent a step backward or the forgoing of possible sales, Mr. Elsesser emphasized.

"Production from these plants has been moved to more efficient plants," he said. "The sales organization associated with these five plants are largely unaffected by the closures. We also have begun restructuring some cake distribution in the Northeast. At the same time, we are eliminating marginally profitable sales activities."

At the same time, Interstate in fiscal 2003 invested in plants in Birmingham, Ala.; Orlando, Fla.; Tulsa, Okla., and the new bakery in Henderson, Nev.

"We are committed to being the market leader in branded bakery goods," Mr. Elsesser said. "Just being the biggest baker doesn't make us the market leader. We need to have consistent quality, efficient production, consumer relevant brands and continual innovation to meet the demands of consumers and our customers. The transformation envisioned in Program SOAR will start us on that journey. We expect that journey to lead to growth."

Fiscal 2004, Mr. Elsesser added, will be an exciting year as Interstate implements its action plan and builds long-term strategy.

"The future, however, will mean change for all of us at I.B.C.," he pointed out. "At the very least, it will involve a culture change. I.B.C. has prided itself on its decentralized management model, but more centralization is called for today in all of our strategic decisions. Administrative redundancies will be eliminated in the field, both for cost containment reasons and for efficiency, and we will give our managers enhanced tools that will allow them to be more responsive to market demands.

"The challenge, of course, is to bring the best ideas and changes forward, without for a moment taking our eye off the consumer, our marketplace execution and the need for strong results. It will not be easy and there is no assurance of success, but we are striving as a company to do what it takes to succeed and build shareholder value."

I.B.C. nears resolution of class-action suit on route sales pay

(Bakingbusiness.com, August 28, 2003)
by Gordon Davidson

KANSAS CITY — Interstate Bakeries Corp. said it's close to resolving a long-standing, class-action lawsuit involving overtime pay for route sales representatives in Washington state.

In its annual 10-K statement filed Aug. 22 with the Securities and Exchange Commission, I.B.C. said it tentatively had settled the class-action suit during the third quarter ended March 8. The case is one of several class-action suits filed in recent years involving wholesale baking company route salesmen and overtime pay issues.

I.B.C. said a state court July 25 approved the settlement in the Washington suit for approximately $6.1 million. There is a 30-day period for appeal, it added.

The class-action suit, filed in November 1996, alleged that I.B.C. failed to pay the route sales representatives required overtime wages under state law. The plaintiffs sought unpaid wages, with interest, and other relief deemed proper by the court.

"We have established reserves that will sufficiently cover the anticipated costs of the settlement," I.B.C. said. "We also have negotiated and put into effect a new union contract with the route sales representatives in the state of Washington that we expect to address this issue. We have asked the state of Washington's Department of Industry and Labor to review and approve the contract's provision relating to overtime pay."

I.B.C. said two additional wage-and-hour cases have been filed under state law in New Jersey, one on behalf of a class of route sales representatives.

"We are also aware of an additional wage-and-hour case brought on behalf of a putative class of bakery production supervisors under federal law," the company said of the News Jersey case.

"These cases are in their preliminary stages," I.B.C. said. "We are evaluating these cases and the amount of potential loss, if any, cannot reasonably be estimated."

Grupo Bimbo's U.S. business loses $8.6 million in Q2

(Bakingbusiness.com, July 24, 2003)
by Gordon Davidson

MEXICO CITY — Pointing to "adverse market conditions," restructuring of its distribution operations and an increase in labor and raw material costs, Grupo Bimbo S.A. de C.V. said its U.S. baking operations in the second quarter ended June 30 sustained an operating loss of NP$90 million ($8.6 million) on sales of NP$3 billion ($287 million).

In the second quarter of fiscal 2002, Grupo Bimbo's U.S. business had operating income of NP$76 million on sales of NP$3.2 billion.

Grupo Bimbo, one of North America's largest wholesale bakers, said the second-quarter sales decline reflected discounts granted to independent distributors in Texas.

"Grupo Bimbo continues to actively launch new products as well as to support the imports of its Mexican brands in order to strengthen the company's presence within the Hispanic population in the U.S.," the company said. "So far this year, sales of Mexican brands in the region have increased over 20%."

After brief strike, union rep predicts more labor strife at I.B.C.

(Bakingbusiness.com, July 17, 2003)
by Lyle Niedens

KANSAS CITY -- A brief labor strike this week at 14 Interstate Bakeries production facilities and thrift stores across the Midwest may repeat itself in other regions if the company's management doesn't alter its bargaining position, a union negotiator warned.

Bob Oakley, chief negotiator for the Bakery, Confectionery, Tobacco Workers and Grain Millers Union, said that upcoming contract talks for I.B.C.'s Southeast U.S. division, comprising about 20 bakeries, could prove as dicey as the negotiations that led to the one-hour Midwest strike beginning at midnight Tuesday.

"If Interstate continues with the same management, we're going to have more (strikes)," Mr. Oakley said. "That's my prediction."

This week's strike affected I.B.C.'s plants in six Midwest states. The union has about 3,000 members at those facilities; about 500 workers from other unions also honored the picket lines.

The union's members in I.B.C.'s Midwest division had worked without a contract since their last three-year agreement with the company expired May 10.

I.B.C. officials did not return telephone calls concerning the matter. But the dispute stemmed from the company's attempt to reign in soaring health care costs that have battered the entire grain-based foods industry.

For the new Midwest regional contract with the union, I.B.C. proposed doubling health-care premiums for single workers to about $400 per year. The proposal could have boosted a worker's share for family coverage by as much as $6,000 annually if the family chose to use out-of-network medical services, Mr. Oakley said.

But the strike culminated with a tentative three-year agreement similar to the last contract, Mr. Oakley said. I.B.C. officials scuttled their insistence on raising health plan costs for workers, whose coverage costs will not increase. Workers also will receive annual wage raises of 30c to 50c per hour; wages in the last three-year agreement rose 35c, 35c and 40c per year, respectively.

Mr. Oakley said he expects union members to ratify "overwhelmingly" the new contract when they officially vote on it Saturday.

However, a similar contract covering the union's members in I.B.C.'s Southeast division expires in mid-August, and Mr. Oakley said he anticipates difficult renegotiations there, too.

He acknowledged the company needs to change to compete more effectively. He claimed the union has not resisted plans that I.B.C. officials announced earlier this year to spend about $50 million during the next three years to upgrade technology at the company's plants, even though I.B.C. admits those upgrades will cause some job losses.

On the other hand, Mr. Oakley scoffs at the notion that I.B.C. is struggling financially, even though profits in its recently completed fiscal year plummeted 61%.

When asked if workers must absorb some higher health care costs to keep I.B.C. viable, Mr. Oakley replied, "Not according to the salaries and bonuses they're paying."

He noted that Charles Sullivan, I.B.C.'s former chief executive, continues receiving an $800,000 consulting salary from the company and that James Elsesser, the company's new c.e.o., has a guarantee to receive half of his annual bonus "whether they make money or not."

"You can't be lining the pockets of c.e.o.s and then coming back to the workers and saying the company is struggling," Mr. Oakley said. "We don't deny the c.e.o.s the money they're getting, we just don't want them to deny us."

He added that the union approached the company in the mid-1990s and asked to work with it to help control rising health care costs through congressional lobbying or other measures.

"We have come to this company and told them we would try to work with them on health care," he said, adding that if the union continues allowing I.B.C. to pass rising health care costs along to workers "they're never going to take an interest in settling these problems.

"We need to get together on this."

Mr. Oakley said the union historically has had a good relationship with I.B.C., which employs 10,000 of its members, more than any other company.

However, he expressed disappointment at how I.B.C. handled this week's strike and accused the company of trying to intimidate workers.

The union had set a strike date two weeks ago. Last week, Mr. Oakley said I.B.C. officials brought about 60 replacement workers to the company's Lenexa, Kas., facility.

"They marched them through the plant in front of our members and told them these are the people that are going to take their job," he said.

But Mr. Oakley said the tactic backfired, yielding a unanimous rejection by the union of the company's proposal to boost health care costs and a unanimous strike vote.

I.B.C. is no stranger to labor strife. In March 2000, the company endured a costly eight-day Teamsters strike in its Northeast region that stripped retail shelves bare of the company's famous Hostess Twinkies from Boston to New York City.

Union Challenges Fort Worth, Texas-Based Bakery on Treatment of Route Drivers

Fort Worth Star-Telegram...05/05/2002

By Barry Shlachter

An angry Teamsters local, which represents 240 Mrs Baird's employees in the Houston area, said Friday that it is challenging the Fort Worth company's plan to convert route drivers into independent distributors without benefits by August.

It was the first public challenge to the sweeping program, a radical step for Mrs Baird's but not uncommon in the industry. The program will affect 980 route drivers in Texas, Oklahoma and part of New Mexico. Only the 240 drivers in Houston are union members.
"I'm going to fight them like hell till the sun sets," vowed Charles Crawley, 52, president of Teamsters Local 988, which represents 4,500 drivers.

He said the plan violates the labor contract, adding, "I'm not a very happy camper."

Crawley said that he has rebuffed a Mrs Baird's overture to negotiate a severance package for union drivers, and that he is filing a grievance with the National Labor Relations Board. The grievance will lead to binding arbitration, he said.

Under its contract, he said, Mrs Baird's "can't subcontract, can't use supervisors (to make deliveries), so how can they arbitrarily do this?"

Mrs Baird's, a unit of Mexican-owned Bimbo Bakeries USA, announced Wednesday that drivers have until late July to buy routes for $ 60,000 to $ 100,000, giving them the opportunity to be their own bosses and to potentially earn more than their current base salary and sales commissions.

Mrs Baird's said Friday that the Teamsters' reaction was expected.

"We are not surprised by the union's statements and are absolutely confident that this program is structured in compliance with the law and any existing contracts," the company said in a statement.

"We stand behind this program and hope that our colleagues will see that it offers them a tremendous opportunity to own and grow their own business."

It expressed hope that the route drivers "withhold judgment until they have had the opportunity to learn more about the program."

Crawley contended that the company's move would violate a contract signed just six months ago that expires in 3 1/2 years.

"If you sign a contract and you want to get out of it, you have to pay the piper," said Crawley, who added that the pact made no provision for the move that Mrs Baird's announced.

Crawley said he has heard only negative comments about the proposal, under which company-funded pension plans and medical plans would no longer be provided. Aside from setting up their own retirement and medical plans, drivers would be responsible for finding fill-in drivers on sick days and vacations while "becoming mechanics" to keep their trucks roadworthy, Crawley said.


Home ] Up ]

Send mail to martin100@prodigy.net with questions or comments about this web site.
Last modified: September 24, 2004
Hosting by WebRing.