ABF, IBT Meet in Kansas City

Austin Alonzo
Kansas City Business Journal
January 11, 2013

ABF Freight System Inc. and the International Brotherhood of Teamsters are meeting in Kansas City this week to continue discussions on a labor agreement between the two parties.

ABF, a subsidiary of Arkansas Best Corp. (Nasdaq: ABFS), is asking employees to accept concessions in wages and pension coverage to cut labor costs to a level comparable with ABF’s chief unionized rival, Overland Park-based YRC Worldwide Inc (Nasdaq: YRCW).

(A little history: ABF sued YRC in late 2010, claiming that YRC cut a deal with the Teamsters that violated the National Master Freight Agreement, a contract covering freight workers nationwide. YRC and the union argued that ABF had removed itself from the NMFA to negotiate separately and thus couldn’t file suit. A federal district court twice has tossed ABF’s lawsuit, and ABF plans to appeal, according to The City Wire, an Arkansas publication.)

The Teamsters and ABF began negotiations Tuesday, and talks are scheduled to run until March. ABF’s current labor agreement with its 7,500 union employees runs until March 31, a Teamster’s release said.

When the two parties met in December, they ended negotiations far apart.

On Wednesday, representatives of the Teamsters released a statement on the most recent round of negotiations. Gordon Sweeton, the co-chairman of the Teamsters’ National ABF Negotiating Committee said the union is disappointed with ABF’s proposals so far.

“ABF’s initial contract proposals ... seek to destroy the NMFA standards that have been in effect for decades and served ABF well,” Sweeton said in a release. “We hope the company will bargain in a traditional manner so that we can make progress on the important issues from the start.”

In a Dec. 20 release, the union said ABF initially proposed reducing paid time off, creating more part-time positions, expanding the use of subcontractors as well as the use of surveillance and computer tracking devices, and replacing the current grievance procedures with arbitration.

In ABF’s most recent statement on the negotiations, dated Dec. 21, the company said its proposals aren’t in line with the NMFA because the agreement, which was drafted in the 1960s, is outdated and is ignored by most of ABF’s less-than-truckload competitors.

Additionally, the company said the proposals put forth by the union will not protect jobs or retirements.

“Instead (they) will have the opposite effect by simply putting us in an even deeper financial hole than we are in now, having racked up $230 million in losses since 2009,” a release said. “Additionally, a two-year agreement that would sync us back up with YRCW simply is not in the best interest of ABF employees.”

ABF is expected to release its fourth-quarter earnings report in a conference call on Jan. 30.

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