Ending months of speculation, the Teamsters union has said it is willing to discuss possible wage and benefit concessions with less-than-truckload (LTL) carrier ABF Freight System.
In a communiqué posted March 12 on the union's Web site, the Teamsters said that given the poor health of the LTL industry and ABF's worsening financial and operating condition over the past 15 months, it is in the union's "best long-term interest to fully engage ABF through formal discussions to determine if and what type of contractual relief may be necessary."
In the communiqué, the Teamsters noted that ABF's 2009 revenues were off 21 percent from 2008 levels, that it recorded a $100 million operating loss in 2009 versus an operating profit of $49 million in 2008, and that it has been "exhausting cash at an alarming rate" since the end of 2008.
The national union spent Monday discussing the situation in phone conversations with local leaders. A conference call with all ABF Teamster members is scheduled for Thursday night. As of the end of 2009, about three-fourths of ABF's 9,814 employees were unionized workers.
ABF, which for months has been pushing the Teamsters to reopen contract negotiations with the goal of obtaining concessions similar to those the union gave rival YRC Worldwide Inc., applauded the announcement. "ABF is pleased that the [Teamsters union] recognizes the need for potential discussions," said company spokesman Danny Loe. Loe declined further comment.
Last November, ABF Chief Operating Officer Wesley Kemp told the annual meeting of the National Industrial Transportation League that ABF was in concession talks with the Teamsters. Kemp said the company would demand wage cuts totaling 15 percent through the four remaining years of its collective-bargaining agreement, as well as an 18-month freeze of pension payments. The proposed concessions were on a par with those won by YRC, which employs about 35,000 Teamster members.
The union at the time denied it was in any type of discussions with ABF, a position it reiterated in its March 12 communiqué.
Analysts at JPMorgan Chase said Arkansas Best Corp., ABF's parent, could gain $36 million in annual pre-tax savings should the union agree to a 10-percent wage cut.