March 10, 2014: Last week the top execs of YRCW each got an $800,000 bonus, as a reward for the concessions approved by Teamster employees and the subsequent debt refinancing. A salaried (nonunion) employee of YRCW sent us an open letter to CEO James Welch regarding the top-heavy priorities of YRCW management, which is reprinted below. For obvious reasons, the letter is not signed.

Mr Welch;

Congratulations to you and Mr. Harry Wilson and Mr. Jamie Pierson on completing the refinancing deal. I'm glad it paid off for you.

You've said on several occasions that you deserve bonuses and stock because you make 25% less than Mr. Zollars did. Wouldn't that make some sense since the company is only 50% as big as it used to be? When he left, Mr. Zollars made $900,000 and you make $700,000 - you've clearly closed that gap and then some with all the stock grants and cash bonuses you've received. How can you be paid millions in incentives when we still lost over $30 million dollars last year? Does the Board pay out millions for sleight of hand financial juggling instead of real operating results?

It escaped a lot of people but I just read in the recent SEC 8k filing that you and Mr. Pierson and Ms. Friehl were this month given a huge bonus by the board to recognize your efforts with the restructuring? You and Mr. Pierson got $800,000 each in new stock 33,333 shares – and Ms. Friehl got a cool quarter million. I am confused though – isn’t it part of your job to do what is necessary for the employees and shareholders? Wouldn’t that include working to get a re-financing completed? I get paid my salary to do my job. It must be nice to be you.

Speaking of the Board – they not only awarded their partner Harry Wilson $3m in monthly fees, plus the $5.5 million he negotiated for himself, but I now hear that the Directors gave their friend another $3.5m on top of what he had negotiated – was that just a handsome parting gift? IF that is true, how can it be that you didn’t have to disclose that? Is this some secret payoff? In total Harry has now gotten $12m for 12 months work - $3m in monthly fees, $5.5m completion bonus and a $3.5m secret bonus. How nice to be Harry.

Did the Board even consider using that huge payout to re-instate the 401k match for non union employees? We haven’t had a retirement contribution in almost six years but that is apparently of no concern to the Board. You all must think Harry is more deserving than those who have stayed with this ship and kept it afloat for years even before you cam back to make your millions.

You lecture us and say we should leave if we don’t like it here. I would like it here a lot more if I could just have a little 401k match – you must like it a lot since you are making millions on the backs of your employees – union and non union alike.

- A longtime YRCW employee.

UPDATED March 6, 2014: Two recent SEC filings reveal that James Welch, CEO of YRCW, sold 93,750 shares of company stock and made $2,329,358. He first sold 38,000 shares, then within a few days sold another 55,750 shares. The filing also noted that Welch owns 329,157 shares at a current value of over $8 million.

The SEC document is available here.

Meanwhile, Harry Wilson, YRCW Board member appointed by James Hoffa for the IBT, has resigned from the Board after he got $5.5 million for his role in the Teamster concession vote and the re-financing deal. Hoffa will now be able to nominate a replacement to the YRCW board.

Wilson made millions more in fees of $250,000 per month and for earlier services.

A report on Wilson’s resignation is available here.

Prior to the concession vote, Welch and other upper management reps were challenged by Teamsters to prove their equal sacrifice. Their answer was they were working for much less than their market value.

Increasing the national standard for twin trailers to 33 ft. from the existing 28 ft. would allow carriers to absorb up to 18% of future freight growth without any change in gross vehicle weight or additional miles traveled on roadways, the chief executive officer of FedEx Ground told a Congressional subcommittee Feb. 27. The House Transportation & Infrastructure Committee’s subcommittee on highways and transit is holding a series of hearings related to highway funding and safety as it works to reauthorize those programs. The current act, known as MAP-21, expires Sept. 30.

Testifying before a hearing on the nation’s freight network, Henry Maier, CEO of FedEx Ground, told the subcommittee that projected benefits of allowing 33-ft. twins are based on data supplied not only by FedEx, but also ABF System, Con-way, Estes Express, Old Dominion Freight Line, UPS and YRC Worldwide.

“Industry-wide, that equals up to 1.8 billion fewer miles driven, more than 300 million gals. of gasoline saved and $2.6 billion in reduced costs annually,” Maier said. “Importantly, a reduction in truck trips would be environmentally friendly, saving fuel and emissions from trucking. This is an excellent example of an innovation that can have tremendous value – including increasing cost efficiencies – but it is one that cannot be implemented without Congress modernizing our transportation policy.”

Some states allow the larger trailers, and FedEx has been testing them in Florida since 2010, Maier told the subcommittee. Not only have the larger trailers been just as safe, but also some drivers operating them believe safety is enhanced because the longer combination is even more stable than those with 28-ft. twins, he said.

Deterioration of highways and bridges “is fast reaching crisis proportions,” Maier said. “As a business whose customers rely on us for fast and reliable service, we can attest that impassable roads and bridges lead to increased costs, service delays and untold equipment damage.”

Maier noted that MAP-21 calls for the identification of a 27,000 mi. Primary Freight Network comprising highways viewed as essential to the delivery of goods. This measure is inadequate given that the Federal Highway Administration says that more than 41,000 mi. of highways would be needed.

“While FedEx agrees in principle with the Primary Freight Network concept, we have concerns based on its limited scope,” he said.

FedEx agrees with the American Trucking Assns. call for greater emphasis to be placed on critical freight corridors and intermodal highway connectors.

Highways’ importance for manufacturers

The Volvo Group North America told the subcommittee that the health of America’s freight network matters to the company not only because of its importance to Volvo customers and their need for equipment, but also because it directly affects the competitiveness of Volvo’s American manufacturing operations in the global economy.

“Like any other manufacturer, we rely on a vast supply chain and our nation’s interconnected network of roads, airports, inland waterways and ports to support and supply our operations,” said Susan Alt, senior vice president for public affairs for Volvo Group North America and former head of the company’s North American supply chain operations.

“Just in time” and lean manufacturing philosophies in recent years have benefited Volvo, its customers and the overall economy, Alt noted. “However, to be efficient we must have the right material, at the right time, at the right place, and in the exact amount needed in the production cycle.”

While the company can plan for some uncontrollable events that impact delivery times, it can’t plan for unexpected delays due to traffic congestion, Alt told the subcommittee. “This is where we get in real trouble - when a truck is caught in a traffic jam and can’t make his delivery. The ripple effect of one late delivery can be costly. It means we don’t build the product on time – tying up capital; it means the product will be re-worked – tying up man-hours and not following normal quality production; it means sending workers home early; it means not delivering to a customer on time and hurting our competitiveness…all because of that one missed shipment.”

While transportation infrastructure is serving the supply chain adequately today, it’s not well-positioned for the future, Alt said. “Highway infrastructure continues to age without a systematic program to modernize key interstate networks; traffic is returning to peak levels that we have not experienced since before 2008 and we are gradually experiencing economic growth with a strong emphasis on exports.”

MAP-21 represented an important step toward reforming transportation policy, but “a full six-year, well-funded reauthorization is needed to address the persistent challenges that are already well-documented and recognized as problems facing our transportation system,” Alt told the subcommittee.

A critical concern is traffic congestion, Alt said, sharing one example from Volvo’s experience at its southwest Virginia plant located along I-81. Until a third truck lane was added, a stretch of mountains near Blacksburg, Va., was the site of many accidents, resulting in frequent delivery delays and production disruptions for the plant, she said. “Since the opening of the third lane, we have a marked improvement in on-time deliveries from that route. This is a real world savings that directly benefits our customers, as well as the safety of the driving public.”

Other witnesses at the hearing were Wisconsin Department of Transportation Secretary Mark Gottlieb, testifying on behalf of the American Assn. of State Highway and Transportation Officials, and Palos Hill, Ill., Mayor Gerald Bennett, testifying on behalf of the Chicago Metropolitan Agency for Planning.

February 28, 2014: YRCW announced their 2013 annual and fourth quarter numbers and it’s clear that the regional carriers are pulling their weight. Operating profits were up to $22.7 million in 2013 for the regionals – Holland, New Penn, and Reddaway - while YRC Freight posted a 2013 loss of $15.4 million. YRC claimed losses due to weather, workers’ compensation claims, and weaker rates.

In late 2013, Jeff Rogers was removed as president of YRC Freight. He has been replaced by Darren Hawkins – formerly senior VP of sales and marketing at the company. CEO James Welch had held the post briefly prior to the change.

Upper management clearly needs a better plan to right the ship at YRC Freight. Teamster members have made countless sacrifices since 2009. James Welch needs to stop pointing fingers like he did in his February 14 letter to Teamsters. The focus needs to be on issues with YRC Freight management and operations – not the thousands of Teamsters who have done their part.

See article in Transport Topics.

February 21, 2014: Over sixty Teamsters attended a February 15 meeting near St. Louis to hear Paul Taylor, lead attorney for the Truckers Justice Center, speak on truck safety issues. The crowd included UPS feeder and package drivers as well as UPS Freight road drivers, freight Teamsters, and carhaulers. Taylor discussed various issues involving trucking safety and the protections available to truck drivers.

Taylor recently won two major decisions against UPS on behalf of feeder drivers.

You can also learn more about your rights and protections here.

If you're interested in helping to organize a meeting in your area, contact TDU.

February 19, 2014: YRC, New Penn, and Holland Teamsters all have a “clean slate” going forward from February 9, 2014 when it comes to documented absences. But management is ready to move on the “new” national uniform attendance policy so every member must be prepared.

Tyson Johnson also issued a memo on February 7, 2014 addressing a range of issues regarding the “Extension of the Agreement for Restructuring of YRC”. He outlines responses to frequently asked questions on the 2014 and 2015 bonus, profit sharing, attendance policy, paid vacation and purchased transportation.

With every contract, including this latest concessionary extension, the devil is in the details. Look over the memos to learn what’s coming down the pike. Remember these memos aren’t the contract but they are management and union interpretations of how it’s going to play out. Be prepared.

Here’s a link with some advice on how to deal with absentee discipline.

Here’s a link with advice on FMLA (Family Medical Leave Act).

February 11, 2014: Recent YRCW SEC filings reveal a payment of $5.5 million to MAEVA Group. See Item 16 in the link for the SEC filings. MAEVA is Harry Wilson’s company. Wilson, you may recall, is the Hoffa appointed trustee to the YRC Board. His firm aided YRC in getting the new refinance terms from the banks.

So while working Teamsters at YRC,  Holland and New Penn entered 2014 giving up even more concessions in wages and benefits to keep the company afloat, Harry Wilson – a board trustee - kicked off the new year with a belated Christmas present of millions.

It’s time for Hoffa to explain the point of Harry Wilson and what good he does for Teamster members.

You can read the DC Velocity report on this issue.

YRC Worldwide Inc. said it has moved forward in the refinancing of its debt by completing a multi-step transaction worth about $300 million.

A total of $250 million of common and preferred stock was issued to retire convertible notes that were outstanding. In addition, the company late in Jan. 31 said $50 million in convertible notes were exchanged or converted into stock. In addition, pension fund obligations have been extended to 2019.

YRC’s total debt, including the latest transaction, was $1.35 billion as of its latest earnings report. The refinancing moved forward following last month’s approval by the Teamsters union of a contract extension into 2019. Lenders insisted on that extension to provide more financial certainty as debt matured over the intervening period.

“Beginning in late 2011, this management team set a very deliberate course to stabilize the company. While we are not yet done with our operational turnaround at YRC Freight, today’s equity investment and subsequent reduction of approximately $300 million in debt is an incredible validation of the hard work and commitment of every single YRCW employee,” Jamie Pierson, chief financial officer of YRC Worldwide, said in a statement.

Pierson said the company expects to refinance the rest of its debt in mid to late February.

The contract extension continued a 15% pay cut and lower pension contributions for 26,000 workers at the company that ranks No. 5 on Transport Topics Top 100 For Hire Carriers in the U.S. and Canada.

A new study found that the restart provision in the Federal Motor Carrier Safety Administration‘s current hours-of-service rule is more effective at combating fatigue than the prior hours rule, the agency said.

The “real world, third-party” study, mandated by the MAP-21 transportation law, provided scientific evidence that the restart provision helps “truckers stay well-rested, alert and focused on the road,” Transportation Secretary Anthony Foxx said in a Jan. 30 statement.

The hours rule, which became effective July 1, requires any driver working long enough to need a restart to take off at least 34 consecutive hours that include two periods between 1 a.m. and 5 a.m.

The study found that drivers who began their work week with just one nighttime period of rest, as compared with the two nights in the updated 34-hour restart break, exhibited more lapses of attention, reported greater sleepiness and showed increased lane deviation in the morning, afternoon and at night.

“This new study confirms the science we used to make the hours-of-service rule more effective at preventing crashes that involve sleepy or drowsy truck drivers,” FMCSA Administrator Anne Ferro said. “For the small percentage of truckers that average up to 70 hours of work a week, two nights of rest is better for their safety and the safety of everyone on the road.”

January 27, 2014: The voting results are in and the YRC concessions will be extended through 2019. Join YRC Teamsters who are taking aim at 2016 and the chance to vote out the Hoffa administration and take back our union. 

Teamster members approved the YRCW “Plan B” contract extension by a vote of 12,267 to 6,314 in local union voting over the weekend. Hoffa and Hall immediately hailed it as “saving 30,000 jobs.” The vote means that the 2008 contract is now extended to run 11 years, until 2019.

As vote reports started coming in on Saturday, it became clear that the balance was tipping to Yes, from the overwhelming rejection of Plan A earlier this month. Many big locals switched majorities from No to Yes, such as Los Angeles Local 63, Dallas Local 745, Columbus Local 413, Akron Local 24, and Kansas City Local 41. 

Some big locals did vote majority No, such as Chicago Local 710 and Portland Local 81, among others. Some voted Yes, but by narrow margins, such as Atlanta Local 728, St. Louis Local 600, and Memphis Local 667.

You can see the Local-by-Local votes here.

Management and the Hoffa administration were forced to make some improvements in Plan B due to Teamster solidarity in the first vote: 1) the mean-spirited five year wage freeze for non-CDL Teamsters was removed; 2) vacation week was saved for affected Teamsters; 3) the vacation pay concession was improved. The rank and file won those changes, while Hoffa and Hall sat back watching.

Stand United for Change

The battle for the future of Teamsters in freight is not over. YRCW, ABF and UPS Freight Teamsters have been through the wringer and out the other side. It is clearly time for change in our union, or we will stay on the defensive, taking concessions, and not organizing.

YRC Local 773 road driver Al Watrous, the administrator of the No More Concessions! Facebook page, summed it up:

“We need to stand United more than ever before.  We are all in this together and have been lacking Unity and Leadership for far too long. Keep it together Teamsters, we have work  to do.”

That work is organizing a movement now to change our union in 2016. Two years from this month, there will be delegate elections in almost every local – including yours. Those delegates – lots of them – will be needed to nominate a team to take Hoffa and Hall out. Change will happen, but only if we organize, starting now.

Change at the top starts with organizing at the bottom in our local unions. If you want to be part of a national movement to take back our union, contact us.

Will Harry Wilson Take Home another $5.5 Million?

Hoffa’s appointee to the YRCW Board, Harry Wilson, may now stand to collect a $5.5 million “completion fee” if YRCW successfully refinances debt, as a result of Teamsters taking concessions until 2019.

Hoffa and Hall’s Wall Street tycoon shouldn’t be making millions while Teamsters are taking concessions. How about putting that money toward some new equipment instead?

A Dangerous Precedent

The vote last weekend was the first-ever contract vote by YRCW or master freight Teamsters without a mail ballot. The excuse was it needed to be done fast to allow management time to refinance.

Earlier this month Hall had a different excuse for the quickie-vote and no mail ballot at UPS Freight.

TDU believes in fair and informed contract votes, and we have successfully sued in court over UPS, Freight, and Carhaul national contracts in the past to enforce this right.

At the national meeting of Local Officers a week ago, Tyson Johnson referred to TDU’s lawsuits when he stated he could not speed the vote up even more! 

We will continue to defend members’ right to a fair vote, with time to discuss it, and with all members given a mail ballot.

If you have opinions on this issue, you can let us know here.