Interstate Bakeries plans staff cuts
The Kansas City Star
Wednesday, September 12, 2007
Interstate Bakeries Corp., facing the threat of a Teamsters strike in Southern California, today announced a reorganization of the company that will result in the loss of another 215 jobs.
In midday over-the counter trading, Interstate Bakeries shares were at 76 cents, near Tuesday’s record low of 70 cents. Shares were down 19 cents, or 20 percent, in trading of just 3,450 shares. Average daily volume is almost 186,000 shares.
The Kansas City maker of Twinkies and Wonder bread, in bankruptcy since September 2004, said it is replacing its 10 profit centers across the country with eight business units utilizing what it calls a cross-functional matrix structure.
The change will result in the removal of two layers of sales management, cutting about 215 jobs, or about 5 percent of its non-union workforce.
In a news release today before markets opened, Interstate Bakeries said the moves would help it focus on its customers, drive sustainable results and lower its costs.
For the full story, click here.
netloafer (anonymous) says...
I hope IBC gets things turned around, but this news is terrible. Their stock is now basically penny stock. A year ago it was about four bucks a share. Today it's less than a dollar.
They said several things in their press release about cross functional teams, etc and their hopes/tentative plans for improvement. When all was said and done they added gthe following caveat:
"Factors that could cause actual results to differ materially include, without limitation: the ability of the Company to continue as a going concern; the evaluation of various alternatives, including, but not limited to, the sale of some or all of its assets, infusion of capital, debt restructuring and the filing and ultimate approval of a plan of reorganization with the Bankruptcy Court, or any combination of these options; the Company's ability to implement its business plan developed as a basis for its discussion regarding one or more plans of reorganization; the Company's ability to obtain concessions from its unionized workforce to reduce costs and allow for greater flexibility in the method and manner of distributing its products; risks associated with the Company's restructuring activities, including the risks associated with achieving the desired savings."
It sure seems that there are even greater difficulties ahead. Right now the union may be going on strike in southern California. I think it was a way of telling management that concessions are going to be out of the question.
I wish our local employees of IBC well. They're one of the largest employee groups in the city and if they lose their jobs it will have a profound impact on the rest of the city.
September 12, 2007 at 4:47 p.m. ( permalink | suggest removal )
Mystccwby (anonymous) says...
Are they actually cutting management jobs or is it as in the past just another reshuffle and finding new titles for these people.
The problem with this company isnt in the workers.This whole Path to Market is BS and wasnt designed for this type of product.The delivery system used by IBC is currently used by others in this same industry and they are making money, the problem here lies in Mis-Management and always have.
We have managers who sit and fdo very little for their pay, refuse to accept new buisness as they are scared the routes will be to big for them to run,one manager has even said we dont need to beg for buisness, get real this company needs all the volume it can get.
September 13, 2007 at 1:47 p.m. ( permalink | suggest removal )
netloafer (anonymous) says...
They are cutting at least 215 staff and management positions. They are also hinting at concessions from the union. That could mean proposing cuts in pay or benefits.
They are closing more facilities and taking a $ hit in the packages they will almost surely offer the redundant staff and management folks. The stock is basically just paper. That means that raising any capital is going to be difficult. The lending stream these days has thinnned out due to the sub-prime mess, and IBC is probably not seen as a good risk by current lenders. The union is threatening to strike in California over the plant closures, so I doubt that the union is going to be in any mood for concessions if they're offered.
I'm sure there's truth to the idea that there are management problems. I also think that changes in the marketplace are taking their toll. People just don't buy the products that IBC sells in any quantity these days. Whatever the problems are, there are going to be times of very though sledding for IBC - that's for sure. I think the best possible thing to do is for labor and management to get together to see if there is a way out. Labor blaming management and management blaming labor isn't going to bring a productive result.
September 13, 2007 at 2:35 p.m. ( permalink | suggest removal )