YRC Worldwide wants to modify Teamsters labor agreement
Kansas City Business Journal
YRC Worldwide Inc., again seeking cost cuts, will start talks Monday to modify the labor agreement with its biggest union.
The Overland Park-based trucking company (Nasdaq: YRCW) said late Wednesday that discussions with the International Brotherhood of Teamsters will look at ways to lower YRC’s cost structure and maintain operating capital.
“Entering into discussions with the Teamsters is another important step in our overall plan to strengthen our financial position during this difficult economic climate,” YRC Chairman and CEO Bill Zollars said in the release. “We have made progress with various stakeholders, including our pension plan trustees and our bank lending group, to modify agreements, and we are grateful to the Teamsters for their willingness to consider further adjustments to our contracts to help reduce our cost structure and enable us to be competitive with others in our industry.”
Hints of the move came late last week, after a meeting of representatives from Teamsters freight locals. According to the Web site of Teamsters for a Democratic Union, a union reform organization, the union proposed that the national contract with YRC be amended to defer pension payments for about 14 months, which would save YRC nearly $500 million. The proposal included YRC getting more bank credit and hiring a turnaround consultant.
Union members would have to vote regarding changes to the labor agreement.
The negotiations, to take place at the Teamsters’ Washington headquarters, “are aimed at addressing (YRC’s) short-term operating cash needs,” the Teamsters said in a statement. The union will reach out to stakeholders that include the pension funds and banks.
“We are entering these negotiations with the expectation that (YRC’s) banks and other stakeholders will also cooperate in helping solve the company’s immediate cash needs,” Tyson Johnson, Teamsters National Freight Division director, said in the statement.
Already this year, union members agreed to a 10 percent wage cut and suspension of cost-of-living adjustments in exchange for a 15 percent stake in the company. YRC also has been negotiating with union pension funds to defer payments using company real estate as collateral — a move its lenders allowed — and on June 18 secured an agreement with the largest pension fund to defer $83 million in payments.
YRC, which has about 49,000 employees, also has been selling property and laying off workers to maintain liquidity. It lost $257.4 million in the first quarter.
YRC ranks No. 2 on the Kansas City Business Journal’s list of area public companies.
