UPDATED August 6, 2019. Jack Cooper’s 2200 Teamsters will vote on a contract proposal for a new company, which would take over Cooper’s assets. Wages and health benefits would remain the same: the major change would be a reduction in the new employer’s pension contribution.
The IBT held a tele-forum for Cooper Teamsters on August 5 regarding the proposal. Local 89 will hold a conference call for Cooper Teamsters on Thursday, August 8.
The IBT states that this is a final offer. The junior lender (Solus hedge fund) would take ownership of the new company, in exchange for wiping out $300 million in debt. The IBT claims that rejection of the deal will lead to liquidation of the company and the jobs.
It is expected that Jack Cooper will file for Chapter 11 bankruptcy reorganization by today, with a stipulation that the terms of the reorganization have been agreed to by the lenders in advance.
The membership vote on the proposal is not expected soon, because this deal involves multi-party details to be worked out. The IBT intends to take the vote in local union halls.
At the phone-meeting today of local officers, several locals voted against it: Locals 25, 89, 251, 560, 710 and 964. The majority of locals voted to recommend it to the members.
Teamsters can read the Summary of Terms, and also the Restructuring Term Sheet, and the Purchased Transportation Addendum to be informed of the situation.
Some of key points in the proposed deal are:
Cooper will file Chapter 11 reorganization bankruptcy. Stakeholders must all agree to the terms. (IBT members, lender, pension fund, Cooper). $300 million in debt will be wiped out.
No wage or health care concessions. Terms of contract remain the same except as specifically changed (pension and purchased transportation). The term sheet would run 5+ years till the end of 2024.
- The new company will stay in the national contract (NMATA) and will bargain along with Cassens, Active, etc for a new contract in 2021; the term sheet will continue through 2024.
Central States Pension: All earned benefits, including 25-out and 30-out would be maintained. Going forward, members will be in the Central States Hybrid plan, and the new company will contribute $150 per week to it. (This is the big cost-savings; the present rate is $348 per week. It looks like the Central States Fund is the biggest loser in this deal.)
Members in other pension plans (Locals 557, 710, 560) will get 401(k) contributions of $150 per week in lieu of pension credits.
The new company will purchase 100 new vehicles per year for five years (using the cost savings from lower payments to the pension fund).
Purchased transportation (subcontracting) would be allowed for certain overflow work.
The new company will have a new board. Mike Riggs will stay on.