The Teamsters have been criticized over the years for any number of things. Their hard-line stances in negotiations have made them Public Enemy No. 1 for many businesses, both inside and outside of trucking.
But the union deserves a pat on the back for the tentative deal it has reached with YRC Worldwide (NASDAQ: YCRW). YRCW also deserves credit in the two-year extension. The agreement still must be ratified by the members, which should be done sometime in late October, YRCW said.
The Teamsters did what they had to do to preserve jobs. We’ve all heard stories of unions that refused to budge on their demands and ultimately, the company went out of business. That won’t be the case here - hopefully.
The union gave quite a bit in the negotiations, recognizing the situation YRCW is in. The company has been rumored for quite some time to be on the verge of bankruptcy and around Christmas had to renegotiate debt with its creditors in order to make debt service payments.
Under terms of the deal, a 15% wage reduction will continue until the conclusion of the contract on March 31, 2015. Hourly rate and mileage increases will be instituted on the following schedule: of 40 cents on April 1, 2011; 45 cents on April 1, 2012; and 40 cents each on April 1, 2013 and April 1, 2014. Those increases would be less the 15% reduction, the Teamsters said.
YRCW will resume pension contributions on June 1, 2011, at 25% of the contribution rate that was in effect on July 1, 2009. There will also be an increase to health and welfare funds of 35 cents per hour each year until March 2015. Union members with more than four weeks of vacation time will lose one week of time.
There is protection for the union, which was able to get included a “snap-back” provisions that will restore wages to the full NMFA rate if the plan is terminated, YRCW files bankruptcy, or the company is sold without TNFINC approval. The union also received another seat on the company’s board.
“While we recognize that this plan contains economic and work-rule concessions that are difficult to accept, members need to fully understand that if this NMFA (National Master Freight Agreement) modification is rejected there is no doubt this company will go out of business,” Johnson said. “This plan is far from perfect, but it will allow more than 25,000 Teamster families to continue to earn a paycheck, maintain healthcare coverage and preserve their pension benefits.”
When all was said and done, the Teamsters did what they had to do and that was reach a deal that hopefully will ensure YRCW continues to operate for years to come and preserve 25,000 Teamster jobs and thousands of more non-union positions.
That is a union doing its job well.
