Stella D’oro On Union And Plant Closure

Posted on October 02, 2009, 9:56 am
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Stella D’oro Company today issued the following statement.

“While the Bakery Workers Union (Local 50, BCTGM) and their political and community allies are pointing the finger at Stella D’oro and its current owner for the permanent shutdown of Stella D’oro’s Bronx bakery operations, the truth is that it was the Union’s flawed strategy that made this outcome a foregone conclusion.

From the outset of negotiations a year ago, the Company made it clear that it was operating at over a million dollar annual loss. While the owners had continued to fund the Company for the first two years of ownership, they were not prepared to do so indefinitely, and a labor cost restructuring was needed because the business would not have long-term viability paying workers $35 an hour in wages and benefits, and providing 10 weeks of paid time off per year. The Union understood the facts, but showed no willingness to make any meaningful concessions. So Stella D’oro’s workers became the sacrificial lambs, when the Union called a strike in August 2008 before the Company had taken any action other than making bargaining proposals.

This was never a situation of a private equity firm seeking to make super-profits, as falsely alleged. Nor was it a situation where New York State taxpayer money was used to buy equipment now being sold to an out-of-state buyer – another false allegation made by Union representatives and their political allies. Rather, it was always about turning a company that had been operating at a loss for many years into a profitable operation over the long-term — a goal that Stella D’oro made clear to the Union, but to which the Union turned a deaf ear.

The Union was very successful in achieving strike solidarity, and in reaffirming to the Company – as it did more than six months after the strike began – that the Union would not entertain any compromises in its bargaining position. The Union’s strategy was to give no ground on wages and benefits, even if that meant the Company would be forced to sell the business and shut its doors in the Bronx. The Union got precisely what it knew it would get with its strategy. The biggest losers, of course, are all the workers of the Company both Union and non-Union alike, whose jobs are disappearing.

Once a company decides to close and go out of business, it still has a duty to bargain over the effects of the closing on the employees represented by a union. In turn, that union also has a duty to bargain over the effects on behalf of the employees it represents. Stella D’oro first offered to begin effects bargaining with Local 50 BCTGM on July 6, when it first announced its intention to close the Bronx plant. It reaffirmed that offer to commence effects bargaining again on September 8, when it notified the Union that it had entered into a definitive Asset Purchase Agreement to sell the Stella D’oro brand and other assets to Lance, Inc.

The Union, however, has shown no more interest in meeting with Stella D’oro to bargain over the effects than it showed in making reasonable compromises that would have enabled the Bronx plant to remain open. Instead, it has sought to avoid effects bargaining, first by engaging in a sideshow dispute over a confidentiality agreement, and then by setting unlawful preconditions to effects bargaining in the form of requests for information that, by law, the Union is not entitled to obtain. This strategy of bad faith bargaining has led Stella D’oro to file two unfair labor practice charges against the Union, which the NLRB is now considering. Once again, it is the employees that the Union represents that will be the ones that suffer.

There are, in fact, no winners as a result of this situation. Stella D’oro is saddened by the fact that many loyal Bronx-based employees, both union-represented and non-union represented alike, their families and the Bronx community as a whole have been adversely affected by a decision to close that was forced upon the Company and its owners by a Union that was unwilling to compromise during the negotiating process. People have lost their jobs and the Company’s owners have lost money on their investment. The sad truth is that under the right cost structure, Stella D’oro could have remained in the Bronx and continued to provide good jobs at competitive wages.”

About Stella D’oro

Stella D’oro is a leading manufacturer of cookies, breakfast treats, biscotti, and breadsticks. Stella D’oro is distributed through grocery stores, supermarkets, drug stores, specialty food stores and other retail locations across the United States. The Stella D’oro corporate headquarters and bakery is located at 184 West 237th Street, Bronx, NY, 10463.

 

Jonas Bronck is the pseudonym under which we publish and manage the content and operations of The Bronx Daily.™ / Bronx.com - the largest daily news publication in the borough of "the" Bronx with over 1.5 million annual readers. Publishing under the alias Jonas Bronck is our humble way of paying tribute to the person, whose name lives on in the name of our beloved borough.