January 7, 2014

Vote count to begin on Teamsters contract at Overland Park-based YRC Worldwide

Two days of ballot counting starts Wednesday morning, with the paychecks of 26,000 Teamsters and the future of Overland Park-based YRC Worldwide Inc. hanging on the outcome. This is the fourth time in five years that workers have voted on reduced pay and benefits.

Two days of ballot counting starts Wednesday morning, with the paychecks of 26,000 Teamsters and the future of YRC Worldwide Inc. hanging on the outcome.

It’s the fourth time in five years the unionized drivers, dock workers, mechanics, clerks, porters, janitors and maintenance workers have voted on reduced pay and benefits. Each time, the struggling Overland Park-based trucking giant has said it needs the concessions to survive and compete.

“It’s very tough for the workers,” said Ken Paff with Teamsters for a Democratic Union, an independent group based in Michigan. “They’re told their company could declare bankruptcy. It’s a tough situation they’ve been put into and repeatedly.”

A yes vote would extend into 2019 the 15 percent pay cuts Teamsters have lived with since mid-2009 as well as reduced pension benefits and other concessions. It also would make new changes the company said it needs to operate more flexibly in the face of mostly non-union rival carriers.

Officials at the International Brotherhood of Teamsters and at YRC Worldwide declined to comment ahead of the vote count.

YRC executives and managers had campaigned for two weeks in December, visiting company terminals and other locations to promote a yes vote. The company mailed each Teamster employee a DVD of YRC chief executive James Welch or another top officer explaining the company’s plight.

Welch said he needs a yes vote from the Teamsters to convince lenders to refinance debts the company can’t repay. YRC must refinance to “save all our jobs and our company,” Welch said in the video.

Bloomberg News reported Tuesday that YRC has a meeting with lenders set for Thursday afternoon, seeking $1.15 billion in refinancing.

Last month, YRC said it reached agreement with some of its creditors and investors on a deal to reduce its debt by $300 million, pending approval of the Teamsters agreement.

Shares of the Fortune 500 company have more than doubled from a low point in mid-November when it reported poor financial results. The stock fell $1.15, or 5.8 percent, to close Tuesday at $18.58.

The Teamsters union has made no recommendation on the contract extension proposal.

In three previous elections, the Teamsters supported the contract terms, and its members approved.

In the January 2009 vote, members approved the contract changes overwhelmingly with 77 percent of the ballots cast in favor, according to reports from Teamsters for a Democratic Union at the time.

Seven months later, when YRC asked for additional pay and benefits concessions, support slipped to 58 percent, the group’s report said. One set of workers, at YRC’s regional carrier New Penn who have a separate agreement, rejected the second round of concessions. The Teamsters had them re-vote and they approved easily.

In the fall of 2010, the Teamsters accepted more concessions and extended the contract to the end of March 2015 with 62 percent of the vote, according to Teamsters for a Democratic Union.

Support this time most likely will be less than that, said Vic Terranella, president of Teamsters Local 41 in Kansas City, which represents more than 700 YRC Worldwide employees.

“The unions were out strong (in 2010) trying to get people to vote yes. This time, the IBT’s got hands off,” Terranella said. “It’s going to be interesting.”

Observers from the Teamsters for a Democratic Union will be at the counting site in Cheverly, Md., near Washington, D.C., Paff said, and they’ll be reporting back results as they unfold.

Votes at each of the roughly 200 Teamster locals are counted separately.

Paff said he hopes to garner a sense of the outcome – perhaps sometime Wednesday afternoon – by looking at the results from locals counted first in comparison with how those locals voted previously.

Official results likely won’t be completed until the end of the day Thursday, said Edward Hartfield, principal at Hartfield Resolution Group that is serving as ratification supervisor for the Teamsters union.

Hartfield said that, early Wednesday morning, the counting crew will visit the Lanham, Md., post office where the ballots have been collecting in a secure post office box. As of Monday, he said, there appeared to be about 15,000 to 20,000 waiting.

But that is an eyeball estimate.

“Right now, we’re totally at the mercy of an everyday postal employee who’s trying to be nice,” Hartfield said.

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