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Home » YRC CEO confident Teamsters will ratify extension to current contract
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YRC CEO confident Teamsters will ratify extension to current contract

November 27, 2013
Mark B. Solomon
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The CEO of less-than-truckload (LTL) carrier YRC Worldwide Inc. expressed confidence today that its 26,000 unionized members would ratify a five-year extension to their existing labor agreement, saying that the company remains an attractive place for drivers and other unionized employees to work.

James L. Welch told DC Velocity that YRC's jobs "pay market competitive wages, provide way-above-market family health care benefits that our employees pay zero dollars for, and offer a pension contribution that is in most cases better than a 401(K) plan." Welch added that YRC jobs "are some of the very best in the industry."

YRC is burdened with a $1.4 billion debt load and faces a $69 million principal payment due in mid-February. It is also dealing with a consortium of lenders unwilling to renegotiate loan terms unless the company has a new labor contract in place. It has asked the Teamsters union, which represents about 26,000 of its workers, for an extension through 2019 of the current five-year agreement, which expires in March 2015.

The YRC contract proposal is not expected to call for wage cuts, according to a communiqué issued by the dissident group Teamsters for a Democratic Union (TDU). The TDU document said there would be no wage increases in 2014, but that annual increases would resume in 2015.

The proposal calls for changes in work rules, including the outsourcing of some driver work, according to the TDU. It also seeks changes in overtime-pay criteria and would amend health and welfare language so that a partial week of work would not receive full health and welfare coverage, according to the TDU communiqué.

Leaders of YRC's locals will meet Dec. 6 to review the company's proposal and determine whether to submit it to the rank and file for ratification. Welch declined to comment on the TDU communiqué, saying any list of proposed demands being circulated is "unofficial and a rumor" at this point. Welch also declined to comment on the status of the debt-restructuring talks with its lenders.

In an Oct. 30 letter to employees, Welch said that servicing YRC's $1.4 billion debt load leaves the company with no money to reinvest in the business once wages, benefits, and regular operating expenses are paid. YRC's interest rate is believed to be between 11 and 12 percent. The company pays $150 million in annual interest, more than all its publicly traded rivals combined, it said. The interest burden is "strangling the company," YRC said in a handout distributed at a Nov. 5 meeting with the Teamsters.

YRC said in the Oct. 3 letter that because a refinancing typically takes 90 days to complete, it must begin the process by Nov. 15 if it is to meet the first principal payment, which is due Feb. 15. YRC also has a $326 million payment scheduled for September 2014 and another $678 million by March 2015.

Transportation Trucking Less-than-Truckload
KEYWORDS YRC Worldwide
  • Related Articles

    YRC workers ratify five-year contract extension, buying labor peace through March 2019

    YRC to submit revised contract offer to Teamsters; no re-vote slated on initial proposal

    YRC workers soundly reject contract extension, casting uncertainty over company's future

Marksolomon
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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