The deal for relief from union agreements brokered between YRC and the International Brotherhood of Teamsters apparently paved the way for more companies to attempt deals with various labor unions.
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.
This past week, 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 announced on Wednesday, Dec. 3, that a deal had been reached.
According to a Teamsters press release, the plan calls for a reduction in gross wages and mileage rates of 10 percent, effective the first payroll period after ratification through the term of the National Master Freight Agreement – March 31, 2013. The wage and mileage increases called for under the agreement will also be reduced by 10 percent. The cost of living adjustment is also suspended.
The economic relief provided in the plan was limited to the 10 percent wage reduction. There are no changes to any health, welfare and pension contributions.
Ballots are scheduled to be mailed out to members on or about Tuesday, Dec. 9, and ballots are tentatively scheduled to be counted on Dec. 30.
Rumor of an agreement had no more been leaked to the press than word came of other companies seeking relief from union contracts.
The YRC deal with the Teamsters was barely agreed upon when reports started that Arkansas Best Corp., one of YRC major competitors, may approach the Teamsters for a similar agreement.
The United Autoworkers Union announced Dec. 3 it is also prepared to “make sacrifices” in an effort to help the Big Three automakers.
And, in the heavy-duty truck sector, Arvin Meritor has also announced it will close its Tilbury, Ontario, brake plant in June unless the Canadian Auto Workers agree to concessions.
The union responded by saying they were taking the situation “very seriously.”
– By Jami Jones, senior editor