News Column

Former Hostess Workers Scramble Following Job Loss

Jan 14, 2013

Lisa Brown

Losing a job just 10 days before Thanksgiving was a hard blow for Rick Marzuco and his family. But what's been even more frustrating? The truck driver blames his former employer, Hostess Brands, for undermining his job search.

Before hiring a commercial truck driver like Marzuco, a company needs to obtain and review drug and alcohol test records from the former employer. That's required under federal law.

Since he was laid off, Marzuco has applied for 10 jobs that require a commercial drivers license and landed three interviews. Marzuco, 54, has been told by prospective employers that Hostess, his employer for a dozen years, hasn't promptly responded to requests for his records.

"I had a job offer seven days after Hostess closed, and they had to fill the position with someone else," said Marzuco, who lives in Granite City. "I have a perfect driving record and never failed a drug screen, and I haven't been able to get a job because they're not returning background checks."

Other laid-off Hostess drivers reported the same difficulty, although a Hostess spokesman says the company is complying with the law and that he knew of no such problems.

The weeks following the closure of Hostess' plants and retail stores have been a struggle for the employees who worked at the maker of snack cakes and bread, often for decades.

Many have had trouble finding jobs in a local labor market that still is in the doldrums. And the problems are compounded by Hostess' own bankruptcy.

Jeff Merlenbach, 47, a former Hostess truck driver who lives in Red Bud, Ill., said he has called the company's human resources phone number multiple times in recent weeks about $3,000 in vacation pay he says he is owed. But he doesn't think he'll ever see the money.

"They owed it to us and they refuse to pay us," Merlenbach said.

The company has said it can't pay workers for unused vacation time or severance because those funds weren't approved by lenders as part of its wind-down plan.

Thousands of bakery workers, cashiers and truck drivers were suddenly out of work when Hostess announced in November that a weeklong strike by bakers had forced the maker of Twinkies and Wonder Bread to close all 36 of its plants and 570 bakery outlet stores across the country.

The closure affected more than 18,000 workers, including 960 employees in Missouri and 1,372 in Illinois, according to the company.

Hostess' shutdown meant the immediate loss of 365 jobs at the St. Louis bakery, 195 at the Peoria, Ill., bakery and 85 at the Boonville, Mo., bakery, as well as an unspecified number of employees at dozens of local depots and bakery stores.

Hostess, which continues to staff its corporate headquarters in Irving, Texas, while the company winds down, disputes claims that there are processing delays for driver records.

"Since we began the wind-down, all drug and alcohol screening verifications have been responded to within the 30-day (Department of Transportation) requirement," Hostess spokesman Erik Halvorson wrote in an email.

The company's current turnaround time for processing verifications is one to two business days, he continued, adding that he wasn't aware of any problems with delays.

Breaking up Hostess

Hostess, which filed for bankruptcy a year ago, has been talking to former rivals and customers interested in buying its business.

On Friday night, Flowers Foods, the maker of breads and Tastykakes dessert cakes, offered the bankrupt company $360 million for key bread assets and brands, including Wonder and Home Pride. It also offered $30 million for the Beefsteak brand.

Under the proposed sale of the bread business, Flowers would get 20 bakeries, including the Peoria and Boonville facilities, and 38 depots or stores. That could mean Peoria and Boonville workers may get hired by the new owner.

The St. Louis bakery, however, was not on the list of assets that would go to Flowers, which is based in Thomasville, Ga. Local facilities that would go to Flowers are a store at 4288 Chippewa Street in St. Louis and a depot/store at 13753 Manchester Road in west St. Louis County.

The Flowers deal, which needs the bankruptcy judge's approval, is conditional on Hostess receiving no higher bid from another party by the end of February.

Hostess also is narrowing down possible bidders for its venerable dessert cake business, which includes Twinkies and Ding Dongs.

Hostess isn't the only one trying to raise money. The job loss prompted Marzuco to sell one of the family's two cars the week before Christmas. The $1,500 didn't stretch far.

"My whole existence relies on my checks," said Marzuco, who is his family's sole source of income. His wife, Sheila, stays home to care for their two grandchildren, ages 6 and 7, who live with the couple.

Long struggle

Hostess Brands faced financial difficulties for years. After emerging from its first bankruptcy in 2009, Hostess continued to struggle, reporting a net loss of $1.1 billion in its 2012 fiscal year.

Union truck drivers, represented by the International Brotherhood of Teamsters, approved their contract with Hostess in September, agreeing to salary reductions of up to 8 percent as part of the company's turnaround plan.

But the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union wouldn't agree to further concessions and initiated the strike in November.

Bakery workers, angry over concessions made in earlier contracts and bonuses promised to Hostess executives, contended that wage and benefit concessions were too steep after years without raises.

Some former Hostess workers have been critical of the bakers union for not accepting wage and other concessions. But their focus now is about moving forward.

"It was financial mismanagement from the company. It wasn't the unions," said Merlenbach, a Teamsters member.

Hostess' repeated ownership changes and trips through bankruptcy court gave many employees the sense that trouble was looming, said Debi Loewe. She worked for 13 years as a retail clerk at the Hostess store in Desloge, a few miles from her home in Bonne Terre.

At times, some employees wondered whether the store's doors would be locked for good when they arrived at work. "We always had the motto that 'if the key fits, we work,'?" she said.

The store, which served as a depot for other Hostess stores, had 16 employees before it shuttered.

Loewe, 57, saw her hours at the Desloge store cut from 40 to 24 in recent years. To have enough hours to maintain her health insurance, she scrambled to find fill-in hours at other Hostess stores. Her husband, who is disabled, is on her health insurance, which runs out at the end of January.

Loewe has been unable to find a new job. Many retailers already had their holiday staffing in place when Hostess closed its doors.

"Right now, it's a big strain," she said. "My husband took early retirement, and his only income is Social Security."

Uncertain future

Loewe recently attended one of the Missouri's Department of Economic Development's "Rapid Response Team" meetings, which offer displaced workers help with their job search, assistance in filing for unemployment and training opportunities.

John Fougere, the DED's director of communications, said it's critical for displaced workers to take steps immediately to begin their job search and tap into available resources.

"A lot of workers don't realize there are free services available at 43 career centers spread across Missouri," Fougere said.

The centers, which are free to use and include office equipment, run workshops on resume preparation and computer skills, among other topics.

For Gary Phillips, a former baker at the St. Louis plant, the habits from working at the same job for more than three decades are ingrained deeply in his psyche. Though he lost his job making snack cakes at the Hostess plant in north St. Louis two months ago, an internal clock still awakens him at 3 a.m., for a 4 a.m. shift that no longer exists.

Unable to sleep, Phillips now finds himself turning to housework in the middle of the night. "I start vacuuming," he said. "The hardest part is you've been doing something for 36 years, and that routine is gone."

Phillips, 53, began working at Hostess when he was 17. He now receives $320 a week in unemployment benefits, which equals about half his former pay. Looking at a stack of bills in his kitchen on a recent weekday morning, he said making the check stretch is a challenge.

"I've never been on unemployment," he said.

He has been unable to find a job doing factory work and is mulling applying at a nearby gas station. Phillips, who lives alone, said the loss of income wasn't something he prepared for.

"You figure Wonder Bread has been around for years," he said. "No one expected them to shut the whole business down."



Source: (c)2013 the St. Louis Post-Dispatch. Distributed by MCT Information Services.