Canadian car hauler seals new Teamsters deal

Financially troubled automotive carrier Allied Holdings said its Canadian subsidiary, Allied Systems, has negotiated a new contract with its unionized workforce.

Financially troubled automotive carrier Allied Holdings said its Canadian subsidiary, Allied Systems, has negotiated a new contract with its unionized workforce.

The Teamsters Union in Eastern Canada ratified the three-year contract that covers the drivers, mechanics and yard personnel represented by the Teamsters in the provinces of Ontario and Quebec. Allied Holdings said 70% of its employees in Canada belong to the union.

The deal includes a wage freeze for the first two years of the agreement and a freeze on the current health and welfare contributions of Allied Systems. However, the company also agreed to increase pension contributions in each year of the agreement and to increase wages 2% effective November 1, 2004 and an additional 1% effective May 1, 2005.

The additional pension contributions will increase costs approximately $100,000 or 0.2% in the first year of the contract, and approximately $280,000 or 0.6% in year two. The wage and pension increases in year three will increase costs approximately $1.6 million or 3.2% overall.

In the U.S., Allied Holdings and the International Brotherhood of Teamsters are negotiating wage increases in the first two years of their new contract. Allied's current agreement with the Teamsters in the U.S. expires on May 31.

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