An unsettling game of trucking chicken is playing out in poultry country.
Fort Smith, Ark.-based ABF Freight System Inc. faces a strike authorization vote next week by 1,786 members of the Teamsters Union who perform local cartage services in what is known in "Teamster geography" as its "Central Region." Should the members, which account for slightly less than one-quarter of ABF's unionized workers, ignore warnings from the union's national leadership and authorize their negotiators to strike, the less-than-truckload (LTL) carrier could be shut down.
The battle is over a so-called supplemental agreement that only applies to this group of workers. The ABF-Teamster national collective agreement, which was narrowly ratified in late June, contains 27 supplements, each covering a specific craft or region. All but two—the Central Region supplement and a smaller addendum covering about 50 office workers on the West Coast—have been approved. However, under the Teamster Constitution, all supplements or riders must be ratified before the national compact can take effect.
The vote is the third crack at closing the deal and putting the issue behind labor and management. A second rejection sent both sides back to the bargaining table. A third rejection is tantamount to a strike authorization vote. Should the majority authorize a strike, then all bets are off. If the workers walk off their jobs and are joined in sympathy by their union brethren, ABF likely will be unable to operate. One caveat is that should less than half of eligible members vote, it would take a two-thirds majority of the votes cast to authorize a strike.
The last proffer was rejected in late August by a 716-652 vote.
In an Oct. 1 letter to members covered by the cartage supplement, Gordon Sweeton, co-chair of the national ABF negotiating committee, warned that their last rejection was against ABF's best and final offer to the group. Sweeton warned, emphasizing his point in bold and underline type, that a strike even confined to the cartage workers would "in all likelihood result in the closure of the company" and the loss of work for all unionized ABF workers. It would also lead to mass defections of ABF's customer base. "Customers in our industry, as you know, have little or no tolerance for disruption," he wrote.
The two sides have extended their current contract for another month, until Oct. 29, to give them more time to reach an agreement on the two remaining supplements. This represents the seventh one-month extension since the current five-year contract expired March 31. ABF is preparing for the possibility of a strike, according to a company spokeswoman. She would not give details.
Ken Paff, national organizer for the Teamster dissident group Teamsters For a Democratic Union (TDU) doesn't believe that the members will vote to authorize a strike and that the national union will do whatever it takes to avoid one. "Neither of the two parties wants a strike," Paff said in an e-mail. "The union will not call one."
The tentative five-year compact calls for an immediate 7-percent wage reduction, which would be recouped in increments over the life of the contract. For the first time, ABF can subcontract out roadwork, at least up to the equivalent of 6 percent of its total miles. The agreement affords the company flexibility on work rules by expanding functions that could be handled across job classifications. It also eliminates one week of workers' vacation.
In return, all current union health, welfare, and pension benefits will be maintained. Workers would get a 1-percent bonus if ABF's operating ratio—the ratio of expenses to revenues—fell to between 95.1 and 96. They would get a 2-percent bonus if the ratio fell between 93.1 and 95 and a 3-percent bonus if it dropped below 93. ABF's second quarter ratio was 98.8, meaning it spent 98.8 cents for each $1 in revenue. The company will announce its third-quarter results on Nov. 11.
Arkansas Best Corp., ABF's parent, has been trying for years to reduce the unit's labor costs, by far the highest in the LTL industry. Company executives believe the tentative agreement goes a long way toward accomplishing that goal. In the second quarter, salaries, wages, and benefits accounted for 61 percent of the unit's operating expenses. Through the first half of the year, those charges accounted for nearly 64 percent.