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August 22, 2007 The following is a letter to all Bakery and Laundry Teamsters covered under labor agreements with the Interstate Bakeries Corporation. Dear Brothers and Sisters: As you may be aware, Interstate Bakeries Corporation (IBC) has once again approached the International Brotherhood of Teamsters (IBT) seeking concessions which it claims are necessary to the long-term survival of the Company. We have had discussions with IBC since mid-June concerning all of the Company’s suggested changes to Teamster contracts. We strongly disagree with the requested changes and, while we continue to have an open mind and a desire to see IBC reorganize successfully, we will fight to maintain the wages, benefits and working conditions of all Teamsters. We have notified IBC that there will be no further concessions unless the Teamsters are convinced that the overall plan to reorganize the company can be successful, and moreover that all constituencies equally share the burden of reorganization. You are probably also aware that IBC has made a similar approach to the Bakery, Confectionery, Tobacco and Grain Millers Workers Union (BCTGM), and we recently learned that it distributed to its local unions a letter dated August 2, 2007. BCTGM’s letter addresses the business plan that IBC has proposed to take the Company out of bankruptcy. While we agree that the letter accurately summarizes the information the Company provided to the Unions about its plan as well as the Company’s predictions for IBC’s future absent implementation of its plan, we do not share IBC’s view that its business plan will allow the company to emerge from bankruptcy; nor do we agree that IBC’s untested Path-to-Market delivery system is the only way for the company to survive. In short, BCTGM has truthfully repeated the Company’s position; however, we do not share the BCTGM’s confidence that the company has a viable plan that makes sense. IBC approached us with its new Path-to-Market system and after thorough review we have serious doubts and questions about whether the proposed delivery system will work. As stated in the Bakery & Laundry Conference Resolution sent to you last week that was unanimously adopted by representatives of more than 70 IBT Local Unions, the Teamsters have not committed to Path-to-Market and several times have addressed our concerns with IBC. We have also encouraged the BCTGM leave any discussions or negotiations regarding fundamental changes to the current delivery system to the Union with the expertise in route sales, that is, the Teamsters, just as we would defer to the BCTGM if the Company’s proposals involved areas of its expertise concerning inside bakery production. We will not let a small minority of BCTGM Local Unions dictate vast changes to the delivery system that would adversely affect thousands of Teamster drivers. We hope none of you are left with the impression that the changes desired by IBC are merely work rule changes about delivery. In addition to the Path-to-Market system, IBC has proposed further modifications to members’ terms and conditions of employment, including health insurance and other economic items; elimination of all overtime not required by law; changing what you can arbitrate; requiring rank-and-file members to act as strikebreakers; and approximately 15 pages of proposals that would radically modify every contract signed by a Teamsters Local Union. Please be assured that we have not forgotten the significant sacrifices Teamsters members have already made to insure the Company’s survival. Those concessions were recommended by us, and approved by the membership over the past two years based on the representations by IBC management that they were the minimum necessary to return the Company to profitability. While we remain willing to discuss these matters with IBC, for the good of all concerned, we have not and will not let IBC forget these substantial sacrifices. Nor do we agree that the Teamsters have any obligation to talk to IBC about restructuring any contracts, with the exception of a small handful of “open” agreements. IBC has announced that it will soon communicate directly with all employees, including Teamster members, about its proposed business plan and, in particular, its new Path-to-Market delivery system. Although to some the proposed delivery system might seem complex, we have seen it attempted and abandoned in several variations in snack foods, notably with Frito-Lay, Inc. We understand fully the proposals advanced by new IBC management and seriously question whether it can be applied successfully to the bakery industry, where no other major producer has attempted it. We believe that with the appropriate changes to the Company’s other operations, including those which we recommended and project would save IBC more than $295 million over five years, IBC can emerge from bankruptcy and return to profitability without the need to sell off portions of its operations. If, however, IBC proposes such a sale, we will vigorously defend against any transaction that jeopardizes the 295+ Teamsters collective bargaining agreements and nearly 10,000 Teamsters members and their families. As mentioned, we have provided the Company with our suggestions for improving operations and increasing sales and profits. We will continue to push IBC to make those changes necessary to emerge from bankruptcy without further subjecting Teamsters members to cuts in wages and benefits, or otherwise gutting hard fought Teamsters bargaining agreements. We will keep you informed of further developments as they occur. Please feel free to circulate this notice to all Teamsters members working for IBC. Fraternally yours, Richard Volpe Dennis Raymond
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