The largest independent less-than-truckload company in the U.S. may very well get a bailout of another kind – one from the Teamsters.
YRC Worldwide Inc. called on the Teamsters to renegotiate a 9-month-old labor contract after the mega-carrier was downgraded by Standard & Poor’s Ratings Services on Nov. 19. That drop in three grades by S&P caused the company’s stock to plummet.
The downgrade and declining stock value forced the trucking company to put up $1.5 billion in assets as collateral on loans.
On Monday, YRC announced it would start a buyback of notes to reduce its debt. Coming up with the cash needed for the buyback was dependent on a “giveback” of union wages and benefits. That’s when YRC approached the Teamsters and asked to open talks on renegotiating the existing contract.
The Teamsters agreed on Monday, Nov. 24, to open negotiations with YRC officials. The labor contract with the Teamsters involves approximately 40,000 employees.
The Teamsters Union and YRC officials reached an agreement to provide YRC with economic relief that will protect the jobs of Teamsters, according to a Nov. 28 update on the negotiations released by the Teamsters.
“This agreement will help the company get through this deepening recession and protect the jobs and health, welfare and pension benefits of our freight Teamsters,” said Tyson Johnson, director of the Teamsters National Freight Division. “This is a very difficult time for our members, but this agreement will protect the livelihoods of our members and their families, which is our number one priority.”
The details of the agreement will be discussed on Wednesday, Dec. 3 with leaders of local unions that represent members from the YRCW companies. If the local leaders approve the plan, Teamster freight members will be asked to ratify the agreement after the first of the year.
– By Jami Jones, senior editor