Union responds

The president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union has responded to reports that rising labour costs caused by new union contracts were the root cause of Interstate Bakeries' decision to "rationalise its operations"​.

Last month, bakeryandsnacks.com reported Interstate Bakeries' announcement​ that it was to close several factories and invest in automation. This move, which will lead to an unspecified number of job losses, follows a significant drop in the company's quarterly profit.

In a letter to our website, Frank Hurt argues that the problems faced by Interstate Bakeries are more complex.

"The problem with Interstate Bakeries is not with its union contracts which are in line with its competitors and are by no means excessive,"​ he said.

"The problems are the results of other factors - those sited by Mr Elsesser (Interstate chief executive) himself in a statement he issued on 11 February 2003 in which he attributed the company's disappointing performance to 'weaker than expected branded sales, particularly in snack, cake, higher than expected product returns and escalating energy costs.'"​

Hurt stresses that in his opinion, these are management weaknesses and in no way relate to union agreements negotiated at the bargaining table.

"To now, eight months later, blame labour contracts as the culprit is simply not true,"​ he said. "Labour costs, like the purchase of sugar, flour, flavourings and other baking ingredients, is a cost of doing business. It comes with the territory and needs to be viewed as such by any reasonable standard."​

Interstate Bakeries​ is the largest wholesale baker and distributor of bread and sweet goods in the United States. The company has three major divisions - the western division, headquartered in Phoenix, Arizona; the central division, headquartered in Kansas City, Missouri; and the eastern division, headquartered in Charlotte, North Carolina.