The Teamsters Union and YRC Worldwide announced Friday they reached a tentative agreement on a new labor contract, providing a pathway for substantial debt reduction and refinancing initiatives for the parent of several trucking operations.
The new agreement contains a number of revisions to the company's previous proposal for some 30,000 employees, which address concerns raised by the Teamsters leadership and its members, according to a statement from YRC Worldwide.
The previous proposal, which was voted without reaching an agreement with the union, was not ratified by the company's employees. In contrast, this new extension was negotiated with the union, according to YRC Worldwide.
News of the agreement sent YCW Worldwide’s volatile stock price soaring nearly 20% on Friday in the first couple of hours of after-hours trading, while it increased only a little more than 2% during trading earlier in the day, before the annoucment by both the company and Teamsters was made.
On Jan. 9, a ballot count revealed that over 19,000 YRC Teamster members who voted over several weeks soundly rejected an initial company proposal.
"The outcome of this week's discussions is critical to the future of the company. The memorandum of understanding extension is something our employees can have confidence is the best, and only remaining path forward," said James Welch, CEO of YRC Worldwide.
Details of the revised proposal will be reviewed at a meeting of local union officials, to be held on Jan. 21. It is up to that committee to approve sending the revised proposal to the membership for a ratification vote.
“Since the acknowledgement this week from YRC that ‘re-voting the rejected proposal was not an option,’ we proceeded with round-the-clock negotiations to address the concerns of the members and materially revise the rejected proposal while, at the same time, providing a way for the company to pursue its debt reduction and refinancing arrangements,” said Tyson Johnson, director of the Teamsters National Freight Division and co-chairman of the Teamsters National Freight Industry Negotiating Committee.
YRC has been working to get the Teamsters to extend their current work agreement into 2019, following the union earlier making wage and benefit concessions. Such approval is needed if YRC expects to avoid possible bankruptcy and secure financing for more than $1 billion dollars in debt, following massive financial losses the past several years.