In The News

Teamsters vote to modify contract with YRC

OVERLAND PARK, Kan. — Union employees at YRC Worldwide Inc.’s freight divisions approved 10 percent wage cuts to save the troubled trucking firm up to $250 million a year, the company said Thursday.

In exchange, the employees represented by the Teamsters union will get a 15 percent stake in YRC.

Trucking companies have been hit hard by the recession as companies cut back on the amount of goods they ship.

“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’ freight division.

The deal covers workers for YRC’s Yellow Transportation, Roadway, Holland and New Penn units.

The union said the contract changes were approved by a 77-to-23 percent margin, with more than 75 percent of the workers casting votes.

Besides cutting wages and mileage rates 10 percent, the agreement also suspends cost-of-living increases for the rest of the contract. Contributions to health and pension plans were not changed, and the workers can recover lost wages if YRC’s stock price goes up, the union said.

Teamsters President Jim Hoffa said his union worked to draft a plan that gave workers the chance to get stock in the company and requires equal sacrifice by all employees.

The company said nonunion workers would get the same or greater reductions in total compensation. Those workers got options to buy up to a 7 percent stake in the company.

The company expects to save $220 million to $250 million a year from the union agreement and $75 million to $85 million from the nonunion compensation cuts that took effect Jan. 1.

Chairman and Chief Executive Bill Zollars said that with the Teamsters agreement, the company was confident of meeting debt obligations despite the economic downturn.

On Dec. 24, the company announced it was canceling a tender offer for bonds and was renegotiating credit terms with lenders.

At the time, the company was worried the union wouldn’t ratify the wage concessions. The union agreed to extend voting after the company’s moves.

Kevin Jones of The Trucker staff can be reached for comment at [email protected].