January 21, 2014

New YRC offer makes nondriver workers eligible for wage hikes; softens vacation sacrifices

Rank-and-file votes this weekend in "final attempt" to save company.

By Mark B. Solomon

Union workers at YRC Worldwide Inc. will vote this weekend on a revised contract proposal that could be the last hope in keeping the less-than-truckload (LTL) carrier out of bankruptcy.

Workers will vote this weekend in secret ballots at union meetings nationwide. Ballots will be counted as soon as the meetings are over. The Teamsters union represents about 26,000 YRC workers.

Details of the revised agreement, which were disclosed today, maintain a number of key components. Among them is an extension of the current contract--set to expire in March 2015--until 2019. Workers would continue to take 15 percent wage cuts, language that was established in 2010. The company's pension contributions would remain at the historically low levels that were established under a 2010 labor agreement. Workers would receive lump-sum bonuses in lieu of hourly wage increases in the extended contract's first two years. Wage increases would take effect in the third year, though those increases would be offset somewhat by the impact of the wage cuts that have already been agreed to.

The modified agreement calls for wage increases for unionized workers who don't hold Commercial Drivers' Licenses (CDL); the initial proposal froze their wages for the duration of the contract. The company agreed to withdraw language that would have granted workers three weeks of vacation only after 11 years of service. It also dropped a proposal to eliminate a third week of paid vacation to employees that already have three weeks of time off.

Under the revised offer, bonuses from a profit-sharing plan tied to the operating performances of YRC Freight, YRC's long-haul unit, and YRC Regional, the company's regional unit, would not be subject to the 15-percent wage reduction. Language from the initial offer allowing the company to subcontract up to 6 percent of all roadwork remains in effect. However, the new plan is believed to include additional protections for drivers.

In a statement disclosing details of the new offer, the union said its hierarchy became directly involved after YRC workers pleaded with them to re-engage management in a "final attempt to allow [the company] to remain in business." The initial offer was not negotiated by Teamster leaders and was instead sent directly by management to the rank and file.

Ken Hall, the Teamsters' number-two man behind General President James P. Hoffa, was involved in the most recent negotiations, according to sources. Hall has spent most of his time negotiating a new small-package contract with UPS Inc., the union's largest employer.

Overland Park, Kan.-based YRC is burdened with $1.4 billion in debt at borrowing costs way above market and is scrambling to restructure its debts to give it some financial breathing room. However, its lenders have conditioned any debt agreement on an extension of the current labor contract.

About the Author

Mark B. Solomon
Executive Editor - News
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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