Teamsters Union truck drivers and other workers at the parent of less-than-truckload carriers, YRC Worldwide, have rejected the company’s proposal that would have extended and modified the existing labor contract until 2019, putting the company in jeopardy of having to file for bankruptcy.
Members voted over the past several weeks and ballots were counted Thursday. The proposed extension and modification was voted down 61% to 39%. Union local votes and total votes can be viewed online.
Tyson Johnson, director of the Teamsters national freight division and co-chairman of the Teamsters National Freight Industry Negotiating Committee said, “Our members have made huge sacrifices to keep this company alive and a majority made the decision not to sacrifice anymore.”
YRC Worldwide management talked with Teamster members and leaders in late October and early November of 2013 about the need to make modifications and get an extension in order to address upcoming debt maturities. The company then submitted a proposal that Teamster local union leaders agreed to, which was sent 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.
The union says Teamsters at YRCW have already made tremendous sacrifices, beginning six years ago with a 15% wage concession from the National Master Freight Agreement rate and a 75% 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.
"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 Dec. 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 after the vote results were released.
YRC is reportedly been seeking more than $1 billion dollars in loans following annual losses and increasing debt since 2007, but creditors have said they won’t lend the company more money unless it received an extension of its labor contract with Teamster union members.
The carrier is reviewing its options with Welch saying, "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."
Welch is reportedly scheduled to meet with lenders Friday in New York to discuss the debt refinancing.
Results of the vote sent YRC Worldwide shares plummeting by the close of trading Thursday on Wall Street, losing just over 16% on the day and a few percent points more in after-hours trading.