January 21, 2014

Teamsters to vote this weekend on revised offer from YRC Worldwide

Both Overland Park-based YRC Worldwide and the Teamsters union have said a revised labor agreement is critical to the company’s future and all YRC employees’ jobs. YRC said it needs the contract changes to persuade lenders to refinance more than $1 billion in debt it can’t repay.

Teamsters members will vote this weekend on a revised contract offer — backed by their union leaders — from struggling trucker YRC Worldwide Inc.

Leaders from Teamsters locals representing roughly 26,000 YRC workers reviewed the revised offer Tuesday and agreed to submit it to a vote. The workers overwhelmingly rejected the company’s original offer earlier this month.

“Today’s decision by local union leaders agreeing to endorse and send the tentative agreement to the membership will allow voting to take place at union halls this coming weekend,” Tyson Johnson, director of the Teamsters freight division, said in

an announcement


“Our members made their voices heard about the company’s initial proposal, and we went back to the company and negotiated significant improvements that will give the members another opportunity to vote on saving this company.”

Both the Overland Park-based company and union have said a revised labor agreement is critical to the company’s future and all YRC employees’ jobs. YRC said it needs the contract changes to persuade lenders to refinance more than $1 billion in debt it can’t repay.

The first payment, totaling $69.4 million, is due Feb. 15.

The terms of the revised offer include some of the same concessions the company had asked for in a proposal that was rejected by 61 percent of the voters. The original offer did not carry the union’s endorsement nor had union officials negotiated its terms.

The company and union negotiated the revised agreement that Teamsters general president Jim Hoffa said he supports.

“No one wants concessions, but with a ‘yes’ vote at least we live to see another day, and I urge you to do that,” Hoffa said in the announcement.

Hoffa also said his support reflects the input he had received from union members after the first vote.

“Since the rejection of the company’s proposal, I met with dozens of YRC members and I have heard from thousands of others,” Hoffa said. “I came away convinced that we owed it to the members to make one last effort to save the company.”

YRC Worldwide officials were not available Tuesday.

The company agreed to revise the contract proposal only after pressing the union to revote on its first deal that was rejected overwhelmingly, according to documents presented to the union locals.

Teamsters for a Democratic Union, which is a group independent of the International Brotherhood of Teamsters representing YRC workers, first made the documents public by posting them online.

The Teamsters union subsequently posted them with its announcement of a vote this weekend.

The summary

said YRC officials “used members of Congress and other government agencies to pressure” the union to resubmit the soundly rejected proposal to a second vote in its original form. The posted summary does not identify the lawmakers or agencies by name.

“We refused to do so,” the summary said about revoting. “The company finally conceded and we entered into real negotiations.”

The two sides said Friday they had negotiated a tentative agreement to extend the contract set to expire at the end of March 2015.

YRC chief executive James Welch, in an announcement Friday, had called the revised proposal the “best — and only remaining — path forward.”

The posted summary repeated the company’s claim that the contract agreement is critical to its future.

“The fact remains that the company is in dire financial condition and has immediate deadlines to meet or face the danger that some of the creditors will force it into bankruptcy,” the posted summary said.

Several Teamsters members have said they rejected the company’s original offer because it added new concessions rather than simply extending the current agreement. Teamsters have worked under a 15 percent pay cut since 2009 and reductions in their pension benefits. The company’s proposals extend those terms into 2019.

Among its changes, the new agreement includes what could be considered an Arkansas Best clause.

“In addition, the employer agrees not to buy any union or non-union regular route common carrier entity without the prior approval of” the Teamsters national freight negotiating committee.

Union officials had reacted negatively last spring when rival trucker Arkansas Best disclosed that it had rejected a merger overture from struggling YRC Worldwide. The overture, which Welch has since downplayed, stirred questions about YRC’s thoughts of financing a takeover given its already heavy debt burdens.

The revised agreement still would replace pay raises scheduled for this year and next with one-time bonuses. A bonus would mean the workers collect that amount once rather than every year, saving the company money.

Among the revisions, it dropped a proposed pay freeze for all Teamsters workers who don’t have a commercial driver’s license.

The revised offer still would set a new pay scale for new hires without a commercial driver’s license, but it increased the new wage scale.

Changes were made to requested concessions on vacation pay and on accruing vacation days that the original deal had asked for. Restrictions were added to the company’s proposal to use other trucking carriers for some work.

Shares of YRC Worldwide gained $1.73, or 10.9 percent, and closed Tuesday at $17.55. Because markets were closed Monday, the stock had not traded since the announcement Friday of the tentative agreement.

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