December 31, 2008: In light of YRC Worldwide Inc.'s change in plans that could provide long-term viability for the company, members of International Brotherhood of Teamsters locals representing some 40,000 YRCW employees will now have until Jan. 6 to ratify a proposed modification to the National Master Freight Agreement, according to a Dec. 27 union statement.
The union also cited the high volume of ballot requests, holiday mail volume, and bad weather that shut airports, as other reasons for the extended deadline.
The original Dec. 31 deadline came on the heels of a Dec. 3 unanimous endorsement by the union on a proposed modification to NMFA, which the union called “an economic relief plan” to protect “tens of thousands of Teamster members' jobs and their retirement security ” (234 DLR A-4, 12/5/08).
The ratification vote on modifications to NMFA, agreed to jointly during negotiations, was extended after YRCW announced on Dec. 24 it would cancel its tender offer for certain outstanding bonds and renegotiate its credit facilities, the union said.
“The company has terminated its tender offer that expired at midnight on Dec. 23, 2008 since the proposed wage reduction amendment to the National Master Freight Agreement, which was a condition of the tender offer, has not yet been ratified,” the company said in a statement.
This means the company will not have to spend $150 million to purchase about $310 million worth of senior notes (senior debt that takes priority over other debt) and will instead renegotiate the terms of its debt with banks, the union said.
“YRC Worldwide Inc. today announced that it is in discussions with its banking group to modify certain terms of its credit facilities that would enhance the company's financial flexibility including changes to its leverage ratio,” the company said in its Dec. 24 statement.
The union believes this move offers a viable long-term recovery plan.
“Since the company's recent decision provides more flexibility, the union is extending the balloting deadline,” the union said.
If approved, the agreement, covering drivers, dockworkers, clerical employees, and others, at each of YRC's subsidiaries, would reduce gross wages and mileage rates by 10 percent, the union has said. Additionally, workers would receive a 15 percent ownership stake in YRCW, allowing them to share in future company performance through stock price appreciation. YRC subsidiaries whose employees are covered by the agreement include Yellow Transportation, Roadway Express Inc., USF Holland, and the New Penn Motor Express.
The agreement would become effective Jan. 1, 2009, and expire March 31, 2013, the end of the NMFA term. Contributions to the health, welfare and pension plans would continue as previously negotiated, the union said.
Currently, YRC's IBT-represented employees are covered by the five-year NMFA. In February 2008, IBT members ratified NMFA, which called for wage increases of $2.20 per hour over term for full-time employees and increased employer contributions to health, welfare, and pension funds (28 DLR AA-1, 2/12/08).