- THE MAGAZINE
Teamsters at YRC Worldwide Inc. rejected the company’s proposal that would have extended and modified the existing memorandum of understanding. Members voted over the past several weeks and ballots were counted Jan. 9, 2014.
The proposed extension and modification was overwhelmingly voted down, 61 to 39 percent. Vote results can be viewed, here.
“The Teamsters Union believes in democracy and we’ve let the democratic process take its course,” said Tyson Johnson, Director of the Teamsters National Freight Division and Co-Chairman of the Teamsters National Freight Industry Negotiating Committee (TNFINC). “Our members have made huge sacrifices to keep this company alive and a majority made the decision not to sacrifice anymore.”
YRCW management communicated with Teamster members and leaders in late October and early November 2013 about the need to make modifications and get an extension in order to address upcoming debt maturities. Following the initial outreach, the company submitted a proposal that Teamster local union leaders agreed to send to members for their vote, while management also worked to line up new money to reduce company debt and go to market on refinancing its remaining debt — with all three contingent on the other.
Financially, this has proven to be a huge hit for thealready struggling freight company. Read about their credit rating worries here. At YRC, company officials are in contact with Teamster leaders to explore options.
"While we are disappointed in the outcome of the vote, we believe that timing of events related to our refinancing did not work in our favor. Many employees had already returned their ballots prior to December 23, the date the company announced it had a refinancing agreement in place. We believe that was information employees needed to make a fully informed decision," said YRC Worldwide CEO James Welch.
YRC’s options are certainly facing an uphill battle, considering recent Teamster statements. According to a release from the ubiquitous union, Teamsters at YRCW “have already made tremendous sacrifices.” This references 15 percent wage concession from the National Master Freight Agreement rate six years ago and a 75 percent reduction in pension contributions.
“Our members have sacrificed billions of dollars in wages and pension benefits over the past five years and yet the company has been unable to recover from the disastrous policies of the previous management,” said Jim Hoffa, Teamsters General President and Co-Chairman of TNFINC.
For YRC, the next steps are to try to renegotiate and simply carry on.
"Despite the vote results, it is business as usual as we have approximately 15,000 trucks on the road today serving 250,000 customers. We will keep our customers, employees and stakeholders advised of our efforts," concluded Welch.