News stories of companies that have contracts with 734 or
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
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
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
"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
"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.
Entenmann's Northlake plant to be distribution center,
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
Employee reaction to the closing was fairly muted. Many said the closing was not
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.,
"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
"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
|(Bakingbusiness.com, January 22,
|by Josh Sosland
|KANSAS CITY — Interstate Bakeries Corp. this week
introduced Home Pride CarbAction bread throughout its market
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
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
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
"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
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
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
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
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
"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
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
|(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
Interstate Bakeries Plans Plant Closings
Friday September 19, 4:26 pm ET
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
|(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
"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
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
"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
· "Identify growth opportunities and adjust the brand
portfolio to follow demographic shifts and altering consumer
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
From an operational perspective, Interstate is particularly
focused on the cost side, both short- and long-term, Mr. Elsesser
"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
Fiscal 2004, Mr. Elsesser added, will be an exciting year as
Interstate implements its action plan and builds long-term
"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."
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
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
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
"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
"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
|(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).
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
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
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,
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
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
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.
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
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
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
"We stand behind this program and hope that our colleagues will
see that it offers them a tremendous opportunity to own and grow their
It expressed hope that the route drivers "withhold judgment
until they have had the opportunity to learn more about the
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.