Wall Street Crashes the Economy—Teamster Pensions Take the Hit
The financial collapse of 2008 was the work of Wall Street, but workers, retirees and the poor were forced to pay the bill. The banks were bailed out, while many Teamsters were told to tighten their belts.
Teamster retirees and pension funds were hit especially hard. As a result of Wall Street wrecking the economy, many pension plans went into the “red zone” and some funds instituted cuts in future benefits.
Hoffa and Ken Hall, who was the chief UPS negotiator, had allowed UPS to pull out of the Central States Pension Fund, with the Fund receiving $6.1 billion at the end of 2007 as a buy-out of UPS’s unfunded liability. But just fifteen months later as the Wall Street debacle put stocks into free-fall, the fund had lost over $11 billion in assets (from $26.8 billion to $15.6 billion) and was in serious trouble.
As the Central States Fund hit the rocks, and other pension funds suffered, the Hoffa administration offered no plan to defend and protect pensions.
The pension crisis was already brewing, but now it was boiling and would get worse in the following years.
The economic collapse led to further pressure from corporations on Teamsters and other workers.
Roadway and Yellow Freight merged their networks, resulting in thousands of lost jobs. And by 2009, YRC would hit members with the first round of concessions: a 10% wage cut, and later would slash pension payments by 75%.
DHL cut thousands of jobs as the corporation scaled back US operations.
Teamsters fought back, but many were still shell-shocked from the economic collapse and lack of any union plan of action to defend contracts, jobs, and pensions.
TDU was more committed than ever to changing the leadership and direction of the International Union. And members were starting to come alive. In December 2009, New York Locals 804 and 814 elected new reform leaderships.
Butch Lewis, speaking to the November 2009 TDU Convention, summed up the urgency and opportunity.
“A couple months back, I said to myself, if not TDU, who? And that’s the question and challenge I pose to other Teamsters. Who is going to help us turn this dire situation around? We need to challenge our brothers and sisters to get off the sidelines and into the game. TDU gives us the best odds for winning.
“TDU has the track record of getting the information and the know-how out to Teamsters that want to make a difference. Many, many Teamsters read the website and count on TDU for what little information and perspective we can get.
“We need to take those readers and turn them into an army of thousands of Teamsters who are a galvanized force in our union. Those thousands can reach out to thousands more. We need to focus all the discontent out there into a positive movement to retake our union.
“We need to challenge our brothers and sisters to get off the sidelines and into the game. TDU gives us the best odds for winning.”
In December 2010, Butch Lewis was elected president of Cincinnati Local 100.
The Teamster Pension Crisis
The 2008 Wall Street debacle was a blow to Teamster pension funds, but the problems started earlier. Various pension funds were developing an unhealthy ratio of active workers to retirees. When Hoffa came into office in 1999, the Central States Fund (CSPF) had 185,000 working Teamsters in the fund, with a healthy ratio of actives to retirees of 1:1.
Companies were allowed to bargain out of the fund, but there was little effort to organize employers into the fund. In 2003, TDU revealed CSPF documents showing that Hoffa knew about the CSPF shortfall by May 2002, and then covered it up to settle short in UPS, freight and carhaul contracts.
In 2007, Ken Hall and James Hoffa gave in to UPS’s demand to exit the Central States Fund, against the advice of the Fund’s Director and its Union Chairman Fred Gegare. TDU had warned that this was in the works; Hoffa and Hall called that warning “TDU lies.”
By 2013, the crisis of pension funds—Teamster funds and other union funds as well—was obvious to all. Hoffa joined the Board of a group of corporate and union officers called the National Coordinating Committee on Multiemployer Pensions (NCCMP), which issued a plan called “Solutions not Bailouts.”
The NCCMP, backed by Hoffa, called for big pension cuts to solve the crisis. TDU, the AARP and the Pension Rights Center began working feverishly to head off this train wreck. The Hoffa administration once again denounced our warnings as “TDU lies.”
By late 2013 Hoffa was forced to do a 180 and oppose the NCCMP bill he previously supported. But in the dead of night in December 2014, it was attached to the omnibus budget bill, and the Multiemployer Pension Reform Act (MPRA) became law.
A Movement to Defend Pensions
TDU held a series of meetings to mobilize Teamsters and retirees to defend our pensions and union pension funds and put forward real solutions. The Hoffa administration organized officials to try to counter the effort. But the pension organizing took off, especially among retirees.
Committees to Protect Pensions took root in Ohio, Kansas City, Wisconsin and spread to every state throughout the South and Midwest. By April 2015, the Pension Protection Movement mobilized over 2000 people to Capitol Hill to denounce the proposed CSPF pension cuts and propose real solutions. Numerous Congressional reps and Senators came out in support. Again, Hoffa-Hall did a 180, and offered support to the growing movement.
The National United Committee to Protect Pensions coordinated lobbying and mobilizing work with retirees. By 2019, the US House passed the Butch Lewis Act, and the US Senate was considering bills to save pensions. The situation is critical, and a pension bill is urgently needed to protect pensions, and also defend our pension funds for the future. Pension funds are critical link of Teamster power.
Hoffa Tries to End the Right to Vote—and TDU’s Victory
After the 2011 IBT election, the Hoffa-Hall administration quietly maneuvered to end our Right to Vote for top officers. In June 2014 the IBT filed a motion in federal court to end the consent order. TDU filed a reply, as did the US Attorney.
Hoffa was trying end the consent order, with no guarantee of a right to vote for IBT officers, or an election supervisor or any corruption monitor. He failed.
In February 2015 Judge Loretta Preska signed a Final Consent Order protecting our Right to Vote with an Election Supervisor. Hoffa did, however, water down one key element of the Right to Vote: starting in 2021, it would be possible for the IBT Convention to amend the Constitution to increase the 5% threshold of delegate support to get nominated for IBT office. This could eliminate opposition candidates; for example, Fred Zuckerman and the slate would not have been nominated if Hoffa had been able to raise the 5% threshold to 10%. TDU remains vigilant on that issue and on all issues of protecting Teamster democracy.
Hoffa also tried to eliminate the Independent Investigations Officer and Independent Review Officer, stating there was no more corruption in the union. Those positions continue, although in the future they will be appointed by the IBT leadership.
In 2017, the head of Chicago Joint Council 25, John Coli, was indicted for taking $325,000 in employer payoffs. In July 2019 he pled guilty to try to get a lesser sentence.
In October 2017, the head of Northern California Joint Council 7, another Hoffa administration leader, was found guilty by the Review Officer of accepting gifts from employers during bargaining, signing a sham contract with a financial friend, and illegal involvement in a union election. He was suspended from his offices for two years, returning in December 2019.
Clearly there is still some problem of corruption in high places. Teamster members need to weed it out to make this the strong, democratic union we want it to be.
The 2016 IBT election would show the power of the Right to Vote, and why Hoffa-Hall wanted desperately to end it.
More TDU History:
How the Reform Movement Has Changed the Teamsters Union (1976-1979)
Winning the Fight for Democracy (the 1980s)
Rebuilding Teamster Power (1991-1997)
Save Our Contracts, Pensions and the Right to Vote (2008-2013)
From Vote No, to Vote Them Out (2013-2020)