YRC Worldwide took a major step forward Friday in its financial restructuring as drivers and dockworkers agreed to more than $800 million in compensation cuts.
Overland Park-based YRC’s union employees voted to accept the latest round of compensation cuts in an effort to keep the company afloat, a Teamsters spokesman said.
The union said 58.5 percent accepted the concessions. About 64 percent of the workers eligible to vote did so, the union said.
Ballots went out to about 42,000 employees, including about 10,000 on furlough.
“Once again, Teamster members at YRCW have shown great courage by making extraordinary sacrifices to help this company survive,” Teamsters general president Jim Hoffa said in a statement.
A ratification means YRC’s union work force will take another 5 percent wage cut after accepting a 10 percent reduction earlier this year.
The workers also agreed to allow YRC to suspend monthly payments into union pension funds until 2011.
Those two concessions combined are expected to save YRC more than $800 million through the end of 2010.
Bill Zollars, YRC chairman and chief executive, said the support of YRC’s employees will allow the company’s recovery plan to proceed.
“The contract changes enable us to reduce our cost structure, preserve capital and be more competitive in the marketplace,” he said in a statement.
Non-union workers are also taking cuts.
Analysts said a rejection of the concessions could have jeopardized YRC’s ability to keep operating outside of bankruptcy court through year’s end. Even with the anticipated cost savings, some analysts said YRC’s recent operational changes have yet to produce promising results. YRC lost more than $300 million in the second quarter while revenues fell by 45 percent.
Shares in YRC closed Friday at $2.26, up 46 cents.
The union said a substantial majority of YRC Teamsters working for its biggest carriers, YRC Inc. and USF Holland, voted to amend the national freight contract.
Workers at another YRC subsidiary, New Penn, work under a separate agreement and rejected the concessions. Also, three big Teamsters locals in Chicago that work under their own contracts rejected the proposal.
The union said the members rejecting the concessions represent about 10 percent of the members who voted.
