YRC reaches tentative agreement with Teamsters for wage cut
Kansas City Business Journal
YRC Worldwide Inc.’s Yellow Transportation, Roadway, Holland and New Penn business units reached a tentative agreement with the International Brotherhood of Teamsters to modify the current national master freight agreement, which includes a wage reduction.
In a release Friday, Overland Park-based YRC (Nasdaq: YRCW) said it expects details of the modified agreement to be available this week following further discussions with Teamsters leaders and members.
YRC Chairman and CEO Bill Zollars said in the release that a number of recent company actions have improved its financial condition but that “the worsening macroeconomic crisis in America and the increasingly critical state of our industry mean that we must take additional measures.”
Zollars said the modified labor agreement would give the company a more competitive cost structure, “allowing us to accelerate our market share recovery and capitalize on opportunities for future growth, while at the same time, defending the long-term prospects and job security of our employees.”
YRC’s stock closed on Monday at $4.12, up 14 cents, or 3.5 percent, on volume of 2.62 million shares, according to Yahoo Finance. The stock’s average daily volume the past three months is 2.66 million shares.
Union acceptance of the modified labor agreement is required for YRC to complete its offering of as much as $100 million in cash to buy back senior debt, which it started Nov. 25.
In the Wolfe Monthly Macro Watch report released Monday, Ed Wolfe of New York City-based Wolfe Research said local union leadership will get details of the tentative agreement on Wednesday. If approved, union members probably will vote to ratify it soon, Wolfe said in the report.
Wolfe estimated that the agreement will include 50 cents, or 2.3 percent, of hourly wage concession on a base of $22.11 for hourly wages, which equates to about $50 million of annual earnings before interest and taxes savings for YRC.
“Based on press releases to date, we have assumed that the existing $12.39 per hour in benefits per Teamster will not change under the new reduction,” the report said.
The report estimates that Teamster labor accounts for 70 percent of YRC’s roughly $5 billion in labor costs and that nonunion wages and benefits, and union benefits, won’t be changed as part of the concessions.
YRC ranks No. 2 on the Kansas City Business Journal’s list of area public companies.
Related Industry News |
Latest News |
Most Viewed Stories |
Most Emailed Stories |
