April 22, 2009: YRC’s plan to defer making contractually-required payments on behalf of their employees to Teamster pension funds is moving forward. They have the approval from their banks, including J. P. Morgan Chase, to use real estate as collateral for the money they would owe the pension funds. Reportedly, they also have a handshake deal with the Hoffa administration to try to finalize the deal with various pension funds.
This plan would allow YRC to defer payments of some $40 million per month, if all pension funds go along. Three pension plans – the Central States Fund, the Western Conference Fund, and the New England Fund – cover the great bulk of YRC employees.
Here is what YRC is asking:
Deferral of several months of pension contributions until 2010 in exchange for a first lien security position on a group of properties.
YRC is offering to pay interest on the loan during the deferral period.
YRC claims they are unable to make the payments at this time; they have not made April payments (for March hours) to at least some pension funds.
YRC management is bargaining with the Central States Fund, which covers about half of YRCW’s 40,000 Teamsters at YRC, Holland, New Penn, and Reddaway.
Some pension funds cover just one local union (including the Chicago Locals 705 and 710 pension funds), so the local officers will have the final say on any deal.