ABF seeks 6.5% cut in Teamsters pay

Lisa Hammersly
Arkansas Democrat Gazette
April 23, 2013
View the original piece

FORT SMITH - ABF Freight System Inc. is proposing a one year, 6.5 percent cut in wages for its Teamsters union drivers and other workers, as well as reduced health care and other benefits, according to a website posting by the International Brotherhood of Teamsters.

After four months of contract negotiations, the Teamsters and ABF Freight System Inc. of Fort Smith are at last talking wages and pensions, according to postings Monday and Friday by both sides.

The union uses words such as "frustrating" and "disappointed" in a website posting that describes ABF's initial economic proposals last week.

The trucking company, which employs about 7,500 Teamster members, posted an update Monday to correct what it calls misperceptions circulating about its pension proposals.

The company and the union on Friday announced another 30-day contract extension through the end of May to continue to bargain. Their contract was to have expired March 31 and has already been extended once by 30 days. The two sides also are locked in a court battle, with ABF complaining in its 2010 lawsuit that the Teamsters and YRC Worldwide enacted concessions for the Kansas company that violated a 2008 national labor contract designed to apply equally to YRC and ABF.

Here are what both sides say are the latest issues in contract negotiations between the union and ABF:

According to the Teamsters, the company's proposals in addition to the across-the-board 6.5 percent wage reduction include:

Eliminating paid health-care coverage for employees working less than 130 hours per month.

Requiring a $240-per-month employee contribution from workers for family health-care coverage.

Reducing and capping the company's contributions to many pension funds.

In an e-mail Monday, ABF company spokesman Kathy Fieweger said the company’s proposals include these provisions:

In addition to a 6.5 percent hourly pay cut, ABF has proposed pay increases in succeeding years that would have the hourly rate higher at the end of the five-year proposed contract than it is now.

The 130-hour threshold to receive paid health-care benefits would standardize minimum hourly, daily or monthly thresholds already in existence for workers to qualify for paid health-care premiums. This hourly figure includes overtime and paid time off, so essentially employees must work 30 hours per week to qualify for paid health care.

The $240 monthly contribution for family coverage is part of a plan that would "modestly increase" out-of-pocket employee costs. It still would be a better plan than the current one for nonunion ABF employees, including management.

The company plans to continue sufficient contributions to all current pension funds, which now number 25. The company does not plan to withdraw from any current pension plans.

Since before contract talks began in December, ABF has said it has to have concessions for the company to survive. In a Friday posting, company officials echoed that point: "We must ensure ABF's long-term viability with a contract that reflects how the rest of the industry operates. We can't continue with the contract that produced $250 million in losses since 2009."

ABF says its proposed package will "still provide its Teamsters with the best-paying jobs in the industry and protect their retirements," according to the company spokesman.

The Teamsters' post voiced worries.

"While we've made progress on major local and over-the-road work rule issues over the last few months, the company's new proposals [last] week are very disappointing and place our process at risk," according to Gordon Sweeton, Teamsters ABF National Negotiating Committee co-chairman. A Teamsters spokesman could not be reached Monday afternoon.

Teamsters for a Democratic Union, a group within the union that posts updates on bargaining issues, says its members were unhappy the company has proposed cuts to wages, health care and pensions. "It's the combination of the three that is really big," said Ken Paff, national organizer for the Detroit-based group.

At the same time, both the union and the company are motivated to produce a new negotiated contract, Paff said. "Neither side wants to think about a strike. It could be devastating," he said.

ABF is the largest subsidiary of Arkansas Best Corp. of Fort Smith, which is ranked as the U.S. and Canada’s 13th largest trucking company. ABF specializes in less-than-load shipments that combine two or more shippers' goods into the same truck.

In 2010, ABF and the International Brotherhood of Teamsters leadership agreed to a 15 percent reduction in gross wages and mileage rates for ABF union workers. Union members voted it down.

Contract talks between ABF and the Teamsters are scheduled to resume April 29 in Kansas City.

Arkansas Best stock closed Monday at $10.96, up 6 cents or 0.55 percent on the Nasdaq. The company's stock has traded in the last year between $6.43 and $18.18.

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