June 18, 2009. The International Union is proposing that the national contract with YRC be amended to defer pension contributions for some 14 months, which would allow nearly $500 million in savings to the carrier.
The outline of the plan was unveiled today by the Hoffa administration at a meeting of freight local union officers in Chicago.
The plan calls for YRC to obtain additional funding in bank credit, to provide additional fresh operating cash for the company over the next year. In addition, the union proposal will include putting a restructuring consultant in place at YRC to help revive the struggling carrier. Many Teamster members feel CEO Bill Zollars has mismanaged the company.
The plan will have to be ironed out in bargaining between the International and YRC, and then voted on by the members. The Teamster pension funds have agreed to the general plan.
It is unlikely that any pension funds will grant members pension credit for time worked during the 14 months; Teamsters will have to hope to get those credits later, when the company regains its footing and pays up its deferred pension obligations for the period.
The plan would give YRC a $7 per hour deferral, which will rise to approximately $7.65 on August 1 when the next pension contribution increase comes due in the national freight contract. Coupled with the $2.30 wage cut given earlier, it would give YRC a $10 per hour reduction in labor costs.
The deal would not automatically extend to YRC’s Reddaway Teamsters on the west coast, who are not in the NMFA; negotiations with Reddaway are on-going.
Meanwhile, YRC has reached agreement with the Central States Pension Fund to accept real estate as collateral for second-quarter (April–June) pension payments. The 14 month deferral would run after that period.
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