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Twinkie strike spreads
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March 23, 2000: 1:42 p.m. ET
Teamsters move strike against largest baker into Ohio, vow nationwide action
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NEW YORK (CNNfn) - Teamsters expanded their strike against the baker of Twinkies, Wonder Bread and other popular brands to Ohio, and vowed that the strike will continue to expand nationwide until the company meets their demands.
The strike against Interstate Bakeries Corp., the nation's largest wholesale baker, centers on arbitration decisions in New England that the company does not recognize, as well as an expired drivers contract in Pittsburgh.
The union expanded the strike to Akron Wednesday night and was prepared to strike a Cincinnati bakery Thursday evening. Both those bakeries, however, make bread, not the popular Twinkies.
"We're going to add one location a day," said Dennis Raymond, chairman Teamsters' New England Bakery Drivers Council. "Unless the company makes a move to meet with us to resolve this, we're going to keep expanding."
About 3,000 Teamsters are now on the picket lines, including the 1,400 New England Teamsters who walked out on March 15. Interstate Bakeries is the largest Teamster employer in that trucking sector. Besides Ohio, the strike has hit bakeries in Pennsylvania, New York, and New Jersey, as well as most Interstate facilities in New Jersey.
Company won't recognize arbitrator's rulings
The company says that a panel with a pro-labor bias made the arbitration decisions, and the company will no longer recognize its authority. It says that it believes the New England strike and the secondary strikes that have followed are illegal.
Mark Dirkes, senior vice president of marketing for Interstate (IBC: Research, Estimates), said the company continues to look at legal action to end the strike, which it argues is illegal under current contracts.
"I can't speculate on when, but at some point in time we will have to make a move," he said.
The company has yet to report results for the quarter ending Feb. 29, which was unaffected by the strike. Analysts are watching the strike and getting ready to lower estimates for the fourth quarter, which ends May 31.
Analysts surveyed by earnings tracker First Call had been looking for the company to make 37 cents a share in the recently completed third quarter and 44 cents a share in the current fourth quarter, compared with 41 cents a share in the third quarter a year ago and 42 cents in the year-ago fourth quarter.
"I'm going to have to cut some numbers. I don't know if it's pennies or nickels or dimes yet," said Mitchell Pinheiro, analyst Janney Montgomery Scott Inc. "They're going to lose sales and for bakers a lost sale is a lost sale, never to be regained."
Little long-term impact seen
But Pinheiro believes the company might be willing to fight this battle now in the fourth quarter, and get the bad news out of the way before the start of the next fiscal year. He says it should not lose any market share long-term from the strike.
"Fresh-baked goods are really about distribution strength. If you have a truck in the area that can visit the supermarket, you're going to get shelf space, especially if you're got established brands," he said. "People are going to want to carry Wonder Bread again."
The strike could actually benefit from all the attention that the Twinkies brand is getting during this walkout, he suggested.
"Perhaps in a strange way, there's an upside to the publicity," he said. "It's gotten more press than I can believe. People care about the Twinkies."
While the strike is not affecting supply of Interstate products in most of the nation, the threat to the supply of Twinkies is driving some of its fans to desperate measures.
Internet auction site eBay has 158 entries for people offering to sell Twinkies. While most of the sites have not attracted bids, or only have offers in the relatively reasonable range of a dollar or two a box, one offering has seen 11 bids, with the top price going as high as $5,150, plus the cost of shipping.
Many of the sellers on the eBay site have excited prose touting the coming shortage or end of the product. Despite the fact that Wonder Bread is the nation's most popular bread, no one is offering to sell Wonder Bread on eBay in comparable fashion.
"I think that's just a testament to the strength of the brand," said Dirkes. "We've always referred to it as an American icon, and I guess this proves it."
The company's stock rebounded somewhat Thursday, after being in a steady decline since the start of the strike. Shares rose 11/16, or about 5 percent, to 14-15/16. 
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