Teamster members who work at the freight companies of YRC Worldwide - Yellow, Roadway, Holland and New Penn - have agreed to modify the current labor agreements.
The union says new plan cuts wages but will protect the jobs and retirement security of tens of thousands of Teamsters.
The plan calls for a reduction in gross wages and mileage rates of 10 percent, starting immediately, through March 31, 2013, plus suspension of a cost-of-living adjustment. The wage reductions apply to all bargaining unit and non-bargaining unit workers, including management. There is no change to any health, welfare and pension contributions.
Teamsters employees will receive a 15 percent ownership stake in YRC Worldwide, allowing them to share in future company performance. Non-union employees have also received options to purchase up to a 7 percent ownership stake in the company.
The modifications were ratified by a 77 percent to 23 percent margin, with more than 75 percent of members casting ballots. However, Stifel Nicolaus transportation analysts point out that since a little more than 75 percent of YRC Teamsters cast their ballots, likely only about 60 percent of YRC union employees voted for the wage concessions. "This leaves about 40 percent of the employees who did not vote to have their wages cut, which may lead to a contentious work environment, as 4 out of 10 employees are upset at the other 6 for cutting their pay."
The company expects to achieve $220 to $250 million in annual savings from its labor contract modification during the remaining term of the contract in addition to the $75 to $85 million in savings in 2009 from the non-union compensation reductions that were effective Jan. 1.
"This agreement is another critical step in our wide-ranging plan to strengthen our balance sheet, while enhancing service for our customers through our national integration of Yellow and Roadway," said Bill Zollars, chairman, president and CEO of YRC Worldwide. "During a time of economic hardship, we are proud of the understanding and support of our employees. The amended contract will provide our company with significant annual cost reductions that will also have long-term benefits as the economy recovers."
"While we never want to see wage reductions, this vote shows that our members understand that we are facing the worst economy since the 1930s and that the company needs some help to get through this difficult period," said Tyson Johnson, director of the Teamsters National Freight Division. "We are hopeful that this agreement will protect the livelihoods of our members and their families by protecting the jobs and health, welfare and pension benefits of our freight members."
"We are facing the worst economy in our lifetime, so we needed to act now to protect our members and their families," said Jim Hoffa, Teamsters General President. "We worked hard to draft a plan that holds the company accountable, requires equal sacrifice among all YRCW employees, gave us the ability to obtain stock in the company, and placed restrictions on where the savings can be used, among other protections for our members."
The union says new plan cuts wages but will protect the jobs and retirement security of tens of thousands of Teamsters.
The plan calls for a reduction in gross wages and mileage rates of 10 percent, starting immediately, through March 31, 2013, plus suspension of a cost-of-living adjustment. The wage reductions apply to all bargaining unit and non-bargaining unit workers, including management. There is no change to any health, welfare and pension contributions.
Teamsters employees will receive a 15 percent ownership stake in YRC Worldwide, allowing them to share in future company performance. Non-union employees have also received options to purchase up to a 7 percent ownership stake in the company.
The modifications were ratified by a 77 percent to 23 percent margin, with more than 75 percent of members casting ballots. However, Stifel Nicolaus transportation analysts point out that since a little more than 75 percent of YRC Teamsters cast their ballots, likely only about 60 percent of YRC union employees voted for the wage concessions. "This leaves about 40 percent of the employees who did not vote to have their wages cut, which may lead to a contentious work environment, as 4 out of 10 employees are upset at the other 6 for cutting their pay."
The company expects to achieve $220 to $250 million in annual savings from its labor contract modification during the remaining term of the contract in addition to the $75 to $85 million in savings in 2009 from the non-union compensation reductions that were effective Jan. 1.
"This agreement is another critical step in our wide-ranging plan to strengthen our balance sheet, while enhancing service for our customers through our national integration of Yellow and Roadway," said Bill Zollars, chairman, president and CEO of YRC Worldwide. "During a time of economic hardship, we are proud of the understanding and support of our employees. The amended contract will provide our company with significant annual cost reductions that will also have long-term benefits as the economy recovers."
"While we never want to see wage reductions, this vote shows that our members understand that we are facing the worst economy since the 1930s and that the company needs some help to get through this difficult period," said Tyson Johnson, director of the Teamsters National Freight Division. "We are hopeful that this agreement will protect the livelihoods of our members and their families by protecting the jobs and health, welfare and pension benefits of our freight members."
"We are facing the worst economy in our lifetime, so we needed to act now to protect our members and their families," said Jim Hoffa, Teamsters General President. "We worked hard to draft a plan that holds the company accountable, requires equal sacrifice among all YRCW employees, gave us the ability to obtain stock in the company, and placed restrictions on where the savings can be used, among other protections for our members."
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