Interstate Brands - Wonder Bread - Twinkies - 16 days left for an icon (?) (bankruptcy, wholesale)

[ibcwife]

Posted on Thu, Sep. 13, 2007 10:30 PM
Interstate Bakeries threatens to liquidate unless unions grant concessions
By JENNIFER MANN
The Kansas City Star
Bankrupt Interstate Bakeries Corp. said Thursday it could be forced to liquidate if it is unable to extract major concessions from its 20,000 union workers soon.

The assertion, the latest in an escalating labor confrontation, came in the struggling company’s request to the U.S. Bankruptcy Court for still more time to exclusively formulate a plan of reorganization. The current deadline is Oct. 5.

The Kansas City-based company, once the nation’s largest wholesale baker, sought protection from creditors and time to reorganize the business in September 2004. At the time, the company cited escalating costs, including for pay and benefits for employees, amid declining sales.

At stake is the future of one of Kansas City’s largest companies and the maker of such iconic brands as Hostess Twinkies and Wonder bread.

Interstate officials contend that union concessions are crucial for the company, which employs about 750 in the Kansas City area, to remain a stand-alone entity.

In the filing, Interstate said that it had obtained financing commitments for its reorganization plan but that those commitments were contingent on extracting additional concessions from union workers.

The company’s two main unions are the Teamsters, whose members sell and deliver its goods, and the Bakery Workers, whose members bake and package the products.

Interstate said some of the lenders had given it until Sept. 30 to get concessions.

If it doesn’t, the financing will dry up and the company will have no recourse other than to ask the bankruptcy court for 30 days to come up with an orderly plan to sell the “company and/or its assets in its entirety or in a series of transactions.”

The assertion by the company comes just days after negotiations with the Teamsters and Bakery Workers unions broke off. Union officials said the company was demanding too much from their members who had already given up a lot.

Rich Volpe, international director of the Teamsters, said Thursday the filing by Interstate was a tactic to keep interested buyers at bay.

Volpe said he knew of at least two parties that had expressed interest in the company. One is Yucaipa, an investment company led by Ron Burkle of Los Angeles, which owns stakes in several companies, including grocery chains. The other potential investor, Volpe said, is an equity firm affiliated with J.P. Morgan.

Neither has expressed an interest publicly.

“Our attorneys will be in court when that hearing comes up on October 3rd, and we think the only reason they’re filing this is to block potential buyers,” Volpe said. “We think strategically it’s a blocking move to keep everything in house to themselves, and we don’t think it’s for the betterment of the company or its employees.”

Interstate says that if it gets the concessions it says it needs from its unions, it has several parties interested in providing financing for the company as it emerges from bankruptcy. The company is asking the court to give it until Jan. 15 to file a plan of reorganization and until March 15 to solicit support from the various constituents.

Before filing for bankruptcy, Interstate employed 32,000 workers at 54 bakeries in 49 states.

Its stock has continued to trade during the bankruptcy, but it has fallen below $1 a share. It closed Thursday at 90 cents, up 5 cents.

Since filing for bankruptcy, the company has shut down seven bakeries and announced the closings of four more at the end of October. Interstate has laid off more than 7,000 employees, with its work force shrinking to 25,000.


Posted on Fri, Sep. 14, 2007 03:35 PM

The Closing Bell: Interstate Bakeries matches record low
By RICK BABSON
The Kansas City Star
A day after it said it may have to liquidate if it doesn’t get concessions from its unions, shares of Twinkie maker Interstate Bakeries Corp. matched a record low.

In a regulatory filing late Thursday, the Kansas City baking company said it needed more time to develop a plan to emerge from bankruptcy and that it needed wage and benefit cuts from its 20,000 union employees.

Negotiations broke down this week between Interstate Bakeries and the two unions — the International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

Interstate shares, up as much as 11 percent, fell 20 cents, or 22.22 percent, and closed at 70 cents, matching the record low set Tuesday. Following Thursday’s light volume of 12,900 shares, today’s volume topped 283,000 shares. Average daily volume is a little more than 183,000 shares


The Future of Interstate Bakeries - Welcome

[ibcwife]

Any thoughts on the subject? Any help/advice on what you think will happen to the company?

[Crew Chief]

Ibcwife, all I can do is offer my support. I'm a driver for a non-union truckload carrier and I worry about the future of anybody in the U.S. who drives comercially for a living. I truly believe our wages will go the direction of other jobs like construction and manufacturing. I'm on a dedicated account and deliver to a major Midwestern retailer. I've had a chance to talk with some of the IBC drivers and I'm pulling for you guys! (My Dental Hygenist here in OH is married to an IBC driver and I made a copy of your post and gave it to here today!)

[ibcwife]

Thanks Crew Chief. Actually, we could find out the fate of the company as soon as tomorrow. The CA plants are being closed. So they have no stake in the matter.... if they choose to strike as a retaliation for closing, more will follow and it is all over. My husband is in CA tonight... If they strike it could get ugly quickly for him. All we can do now is pray. It is in God's hands.

[Crew Chief]

IBCWife, we sure hope things work out for you, hubby and IBC... We're pulling for you all! Can't imagine life without Hostess Twinkies...

[jqbrierl]

I just heard that about 13% of the stock shares in a two day time frame were just sold. I really think that this great company that I work for may have stuck a back room deal. Really why would anyone want that much stock in a company that has been bankruptcy for three years.

[litlux]

It is a terrible jolt to the 20,000 affected workers, and they have my sympathy.

But the company has been on the ropes for a long time as their horrible products have been hurt first by the low carb movement, and then by their intransigence in changing to healthier ingredients.

As usual, the executives and CEO will iikely leave with gold and platinum parachutes, while the gap in whipped wallpaper paste bread will be filled by their competition.

But the handwriting is on the wall, puffy white bread and chemically based twinkies as we have known them are headed for the ash heap of nutritional disasters that the food industry has fed America.

Watch for other major food makers to fail in the next decade as the public learns more about what they have been really eating. They will not be happy.

[MovinFromUT]

I too am and IBC wife. I of course worry about all of the employee's futures also, including our own. I find it curious that you found out about 13% of the share being sold. How did you find this out? If something like was done, I would think it would have to go through the bankrupcty courts. I get emails from all of the filings that are done on IBC's behalf, and I haven't seen anything like that.
Yes it's true that they closed four bakeries in CA. As a company you would too if you were losing millions of dollars a year. I find it humorous from the different items I've been reading on Wonder Bread, how people call the white bread crap. Well, those same people probably have Baker's Inn bread sitting on their countertops, unaware that it's made by IBC. Those same people whining that the white bread is "out" and the healthy bread in "in", probably don't have a clue either that IBC makes a Whole Wheat White. How about stuffing? Yep, IBC makes stuffing too. No, I don't eat Twinkies anymore, but I sure do know a lot of people who do.
Let's hope that this company can pull through these tough times. There will be thousands of people affected if the company sells, or closes altogether.

[ibcwife]

Originally Posted by MovinFromUT

I too am and IBC wife. I of course worry about all of the employee's futures also, including our own. I find it curious that you found out about 13% of the share being sold. How did you find this out? If something like was done, I would think it would have to go through the bankrupcty courts. I get emails from all of the filings that are done on IBC's behalf, and I haven't seen anything like that.
Yes it's true that they closed four bakeries in CA. As a company you would too if you were losing millions of dollars a year. I find it humorous from the different items I've been reading on Wonder Bread, how people call the white bread crap. Well, those same people probably have Baker's Inn bread sitting on their countertops, unaware that it's made by IBC. Those same people whining that the white bread is "out" and the healthy bread in "in", probably don't have a clue either that IBC makes a Whole Wheat White. How about stuffing? Yep, IBC makes stuffing too. No, I don't eat Twinkies anymore, but I sure do know a lot of people who do.
Let's hope that this company can pull through these tough times. There will be thousands of people affected if the company sells, or closes altogether.

Yes, I wonder about the 13% sales too... and I agree that the CA bakeries were loosing money hand over fist. The company is closing plants that are not worth keeping. And after they are cleared out the bakeries will be sold like the NC plant. (If we are still around that long). I am still hopeful. It is my understanding that the N.CA union is responsible for keeping the S.CA plants from going on strike which would have closed us last week. I see that as a positive thing. I am still praying.

[litlux]

Originally Posted by MovinFromUT

I too am and IBC wife. I of course worry about all of the employee's futures also, including our own. I find it curious that you found out about 13% of the share being sold. How did you find this out? If something like was done, I would think it would have to go through the bankrupcty courts. I get emails from all of the filings that are done on IBC's behalf, and I haven't seen anything like that.
Yes it's true that they closed four bakeries in CA. As a company you would too if you were losing millions of dollars a year. I find it humorous from the different items I've been reading on Wonder Bread, how people call the white bread crap. Well, those same people probably have Baker's Inn bread sitting on their countertops, unaware that it's made by IBC. Those same people whining that the white bread is "out" and the healthy bread in "in", probably don't have a clue either that IBC makes a Whole Wheat White. How about stuffing? Yep, IBC makes stuffing too. No, I don't eat Twinkies anymore, but I sure do know a lot of people who do.
Let's hope that this company can pull through these tough times. There will be thousands of people affected if the company sells, or closes altogether.

It is not my intention to rub salt into wounds, and what you say is very accurate. I may not be a puffy 'wonder" bread fan, but I agree there are millions who love the stuff, and I am in a minority.

But here is the problem as I see it. The number of families who have been buying white bread has been declining, and the marketing gurus at IBC saw the problem as one of a trend towards more fiber, more whole grains. But what they did was make a whole grain breads to look and taste like the white breads, only with fiber.

This did reverse their 3% decline and turned it around to a 4% increase as sales of white bread continued to fall off. But as I see it, in additon to superficial claims of "whole" wheat, many of the iBC versions only have partial whole grains, and they are mixed with the same old highly processed bleached flour they have been using for ages. They also did not think about the sugars, corn syrups, and other additives they put in their bread, which looks more like a chemical formula for a bomb than the flour, water, yeast that bread whould consist of.

I have tried Baker's Inn - when it was on sale and being promoted, but the ingredieents are still a turnoff and I am buying local breads from Pittfield Rye Bakery instead. They still use white flour in many of their breads, but at least it is not processed to death, and has some presence in the mouth instead of turning into, well, that wallpaper paste I mentioned in an earlier post.

There is nothing sadder than seeing a giant company and its huge force of American workers up on the ropes. I get no joy in critisizing IBC either. But try as they may, they are still behind the curve here.

I had a retail chain that sold things like CD's at one time, and the times changed for me, too. I lost that business, and opened another one that better reflected the increasing pace of change. Next to go will be the video stores, like Blockbuster. Movie Gallery and Hollywood video are about done, and will likely go into bankruptcy within the next year and start closing most of their stores. The electronic stores like Best Buy and Circuit City will likely be fading as well, and even Sears is in deep, deep trouble.

Change is awful, but it happens more quickly and horrendously than ever before and will increase in speed in the coming decade. When gas hits $10 a gallon, and the energy for producing, processing and transporting wheat becomes a serious problem to American agriculture, what we eat will change drastically too.

What we are seeing here are the first signs of changes that will affect food distribution and consumption in the future.

High energy costs will change everything we take for granted today.