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4B Daily News – Tuesday, November 20, 2012 WHITE PLAINS, N.Y. (AP) — Twinkies will live to see another day. Hostess Brands Inc. and its second largest union agreed on Monday to go into mediation to try to resolve their differences after a bankruptcy court judge concluded that the parties hadn't gone through the critical step. That means the maker of the spongy cake with the mysterious cream in the middle won't go out of business yet. The news comes after ern District of New York in White Plains, N.Y. ''Not to have gone through that step leaves a huge question mark in this case.'' the maker of Ho Ho's, Ding Dongs and Wonder Bread last week moved to liqui- date and sell off its assets in bankruptcy court. The com- pany cited a crippling strike started on Nov. 9 by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union that started, which repre- sents about 30 percent of Hostess workers. ''Many people, myself included, have serious ques- tions as to the logic behind this strike,'' said Judge Robert Drain, who heard the case in the U.S. Bank- ruptcy Court in the South- expected to begin Tuesday, with the liquidation hearing set to resume on Wednes- day. After Monday's hear- ing, Jeff Freund, an attorney for the bakers union, said any guess as to how the talks will go would be ''purely speculative.'' In an interview follow- ing the hearing, CEO Gre- gory Rayburn said that there is enormous financial pres- sure to come to an agree- ment with the union by the end of the day Tuesday. He noted that it's costing Host- ess about $1 million a day in payroll costs alone to keep the company alive. ''We didn't think we had The mediation talks are Hostess lives another day to mediate with union Brotherhood of Team- sters, which urged the bakery union to hold a secret ballot on whether to continue striking. Although many bakery workers decided to cross picket lines this week, Hostess said it wasn't enough to keep operations at normal levels. Rayburn said that Host- a runway, but the judge just created a 24-hour runway,'' said Rayburn, who added that even if a contract agree- ment is reached, it's unclear whether all 33 Hostess plants operate again. Hostess, weighed down by debt, management tur- moil, rising labor costs and MOULE'S TEHAMA COUNTY GLASS SIDEVIEW for all makes & models MIRRORS Installed 515 Sycamore St., Red Bluff • 529-0260 ess was already operating on razor thin margins and that the strike was the final blow. The company's announcement on Friday that it would move to liq- uidate prompted people across the country to rush to stores and stock up on their favorite Hostess treats. Many businesses reported selling out of Twinkies within hours and the spongy yellow cakes turned up for sale online for hundreds of dollars. Even if Hostess goes the changing tastes of America, decided on Friday that it no longer could make it through a conventional Chapter 11 bankruptcy restructuring. Instead, the company, which is based in Irving, Texas, asked the court for permission to sell assets and go out of busi- ness. Hostess, which is in its second bankruptcy in less than a decade, said that it was saddled with costs related to its unionized workforce. So the company brought on Rayburn as a restructuring expert to rene- gotiate its contract with labor unions. contributing $100 million a year in pension costs for Hostess, which had been workers, offered them a new contract that would've slashed that to $25 million a year, in addition to wage cuts and a 17 percent reduc- tion in health benefits. But the bakery union decided to strike. By that time, Hostess had reached a contract agreement with its largest union, the International out of business, its popular brands will likely find a second life after being snapped up by buyers. The company says several potential buyers have expressed interest in the brands. Although Hostess' sales have been declining in recent years, the com- pany still does about $2.5 billion in business each year. Twinkies along brought in $68 million so far this year. $5 off Be prepared. Have your car AC serviced. repair, custom paint and matching 35 E7DH;57 EB75;3> "'//5 Auto repair and refinishing, glass +refrigerant, (134A) 530.527.6160 • 915 Madison St., Red Bluff Red Bluff Collision It's heating up outside. Signature Service® Oil Change 190 S. Main St., Red Bluff 530-527-8264 Jiffy Lube, the Jiffy Lube design mark and Jiffy Lube Signature Service are registered trademarks of Jiffy Lube International, Inc. ©2011 Jiffy Lube International, Inc. 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