Trucking giant YRC Worldwide Inc. said Thursday it plans to make a revised contract offer to its Teamsters employees, who soundly rejected the first deal in a vote revealed last week.
Similarly, the International Brotherhood of Teamsters said it has been talking with the Overland Park-based company since the vote. It said YRC officials have asked for a meeting to discuss “their next steps.”
Investors welcomed news of the talks. Shares in YRC jumped $2.69, or 21 percent, and closed at $15.47.
YRC executives had called approval of the contract critical to the company’s future, particularly in refinancing debts it can’t repay. A $69.4 million debt payment is due Feb. 15. The rejection also led to concerns that shippers would shift business to other carriers and speculation that bankruptcy was a possibility.
In making their announcements, the company and union both put boundaries around what a revised deal would need to accomplish.
TheTeamsters union said
it would consider a proposal that would “enhance the company’s financial position.” It also said the new offer “must contain meaningful improvements over the last proposal.”
YRC chief executive James Welch said inthe company’s announcement
that a new deal “must achieve operational costs savings” for the company.
Both sides said there would be no reconsideration of the pact rejected by 61 percent of the nearly 20,000 Teamsters who voted.
The first proposal would have extended the existing contract into 2019 and put new concessions in place. YRC’s Teamsters employees already have lived with a 15 percent pay cut since 2009 as well as reduced pensions and other benefits.
In the wake of their vote, several Teamsters members have said the additional concessions triggered the “no” votes. Many Teamsters, they said, could have lived with simply extending the terms of the current contract, set to expire in March 2015.
“If it was just an extension, I think that could get approved,” said Vic Terranella, head of Teamsters Local 41 in Kansas City.
Thursday’s announcements, however, makes it likely the new offer will include some new concessions. Neither the company nor union indicated the extent of changes it had in mind.
“We don’t know what they’re coming up with now. It needs to be something that makes sense,” said one Teamster member who asked not to be identified.
YRC’s first offer would have saved the company $100 million a year. YRC also had said it needs concessions to persuade lenders to refinance more than $1 billion in loans it can’t repay.
The first debt installment — $69.4 million — is due Feb. 15. Welch previously labeled the contract vote and refinancing as saving the jobs of all YRC employees.
“It’s clear the Teamsters understand the urgency of the current situation,” Welch said in the announcement Thursday.
The union, which represents about 26,000 YRC employees, said the situation is “extremely fluid” and its leaders intend to stay in close contact with YRC to review all possible options.
Many of the changes the original plan sought would have meant less money for Teamsters members.
The offer would have replaced 40-cent raises the Teamsters are set to receive this year and next with $750 bonuses each year instead.
A bonus would mean the workers collect the amounts only once rather than every year, as with a pay raise. One Teamster also said many employees earn overtime, which means the bonus amount would have been less than the scheduled pay raise.
YRC also wanted to freeze the pay of employees who don’t have a commercial driver’s license while continuing to give those licensed drivers scheduled pay raises. New hires without the license also would have come to work under a different pay scale than those already employed under the current contract.
Vacations would be paid at a lower rate under the proposed changes, and some employees wouldn’t earn additional vacation as quickly as before.
New absentee rules that currently cover only part of the company and include penalties for repeatedly missing work would have expanded companywide.
Other changes the company sought would have allowed it to divert work to other companies and to different employees than current work rules allow.
YRC, one of the nation’s largest trucking firms, operates YRC Freight nationally as well as regional carriers Reddaway, Holland and New Penn.