A group of nearly 1,800 unionized ABF Freight System Inc. workers in the Midwest have overwhelmingly voted not to authorize a strike vote against ABF, averting a possible shutdown of the less-than-truckload (LTL) carrier and clearing the way for the implementation of a new five-year collective bargaining agreement.
The members, who provide local cartage services for ABF in the so-called "Central Region," decided to not direct union leaders to call a strike by a vote of 70 percent to 30 percent, the Teamsters said in a statement last night. About 77 percent of eligible voters cast ballots, the union said. Union negotiators representing ABF workers will be polled by the end of the day to determine whether to accept management's proposal.
Top Teamster officials warned earlier this month that a walkout by the cartage workers would cause a ripple effect that would likely shut down ABF and result in the loss of about 7,500 union jobs. Management, for its part, said it had made its best and final offer to the group and was making strike preparations in the event of a thumbs-down vote.
In late August, the rank-and-file rejected management's proposal by a 64-vote margin, leading to the strike authorization vote. The August vote represented the group's second rejection of the supplement, a move that sent both sides back to the bargaining table. A third rejection would have amounted to an authorization to strike. Neither ABF nor the Teamsters would comment on specific issues regarding the supplement.
The national contract, which was ratified in late June, contains 27 supplements, each covering a specific craft or region. By mid-October, all but two had been ratified. A smaller addendum covering 50 office workers on the West Coast was ratified on Oct. 14, leaving the cartage supplement as the only outstanding issue. Under the Teamster constitution, all contract supplements or local riders must be ratified before the national contract can take effect.
The new master contract will be enforced effective the first pay period following formal ratification of all supplemental agreements, according to an ABF spokeswoman.
The 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—falls to between 95.1 and 96. They would get a 2-percent bonus if the ratio falls between 93.1 and 95 and a 3-percent bonus if it drops 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.
THE BATTLE AGAINST HIGH WAGES
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. 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.
The original contract expired on March 31, and both sides have agreed to seven one-month extensions since then in order to hammer out a new compact. This is the first compact ABF has negotiated on its own and apart from the National Master Freight Agreement (NMFA), which has traditionally governed labor relations in the trucking industry.
YRC Worldwide Inc. is the only carrier of significant size remaining in the NMFA, which turns 50 next year and which at its peak in the late 1970s represented about 400,000 workers. Truck labor has been decimated in the post-deregulation world as company failures, bankruptcies, consolidations, and the proliferation of nonunion carriers diminished its influence.