The renewed profit center consolidation efforts come on the heels of another round of successful negotiations with the International Brotherhood of Teamsters (IBT). IBC reached agreement with IBT's local bargaining units in the Northeast profit center to modify and extend the existing collective bargaining agreements that govern employment with IBC through July 31, 2010. Of the 14 proposed extension agreements, 12 have been ratified and two have been submitted for ratification. The 14 agreements cover about 2,100 employees. In August, IBC said that members of the Bakery Drivers Union Local 550 and Bakery Drivers and Salesmen Local 701 in the New York City metropolitan area ratified long-term extensions.

The negotiation and ratification of these extensions is a critical step in IBC's emergence from bankruptcy protection. Tony Alvarez, IBC's chief executive officer, said lessons learned during the negotiations spurred the company to "resume the consolidation process and reduce the uncertainty in the organization caused by the previously announced deferral."

With the deferral lifted, IBC immediately announced plans to close its Lakewood, Wash., bakery and consolidate routes, depots and thrift stores in its Northwest profit center. The company expects to complete the consolidation, which affects about 200 employees, by Dec. 17. The consolidation of the Northwest profit center will remove IBC's bread products from Washington and Oregon. The company still will supply branded cake products in these states.

The preliminary estimate of charges to be incurred in connection with the Lakewood bakery closing is about $15 million, including about $1.5 million in severance charges, about $11.5 million in asset impairment charges, and about $2 million in other charges. IBC also estimates that about $3.5 million of these costs will result in future cash expenditures and about $500,000 in capital expenditures and accrued expenses to enact the consolidation.