UPDATED January 22, 2014. 4:00 p.m. The International Union has just issued new Rules for contract voting by 26,000 YRCW Teamsters. The changes 1) are to allow Friday voting in a sealed envelope for drivers subject to dispatch who will not be back to their home local to vote on the weekend; and 2) clarify that anyone on layoff, but who has worked in the past three years, may vote, even if they are on withdrawal.

The full tentative agreement is available here. We encourage members to review it and share it with co-workers.

A Summary of the Tentative Agreement is available here.

It is considerably changed from YRCW’s “wish list” which was overwhelmingly rejected by members. Reduced vacation pay has been modified, and delaying three-weeks of vacation until 11 years of seniority is out. The two-tiered wage increase is out (Non-CDL dock and office workers were denied any wage increases in the first proposal) and non-CDL new-hires will have a progression. The proposal to use Utility Employees is out.

The lump-sum bonus the first two years of the five-year extension is still in; but those on seasonal layoff will get the bonus. The use of purchased transportation has added protection for road work, but is still in.

The proposed contract extension will be voted by secret ballot this weekend – January 25-26 – at union meetings. We encourage all YRCW Teamsters to be there and cast a vote. The votes in each local will be counted immediately following the meeting. You can review the rules for the vote and counting ballots here.

Note that the Rules (see #1) state that “The  company has committed to arrange work schedules so that drivers will be available to vote at their home Local Unions.”  We encourage members to see that it is enforced.   Note also that the Rules provide for observers of the entire process, from the start to the count, which will be immediately after the meeting, or last meeting. (see #4-15). Teamsters should consider volunteering to be observers. Note that “locals shall provide facilities for members to mark their ballots in secret” (see #10).

John Moses of Logistics Capital Management, IBT’s economic advisor on YRCW restructure, told the local officers at today’s meeting that the company will very likely declare bankruptcy if the tentative agreement is rejected, and that financing is contingent upon it passing.

The local union officers voted overwhelmingly to recommend it to the members, with several locals not voting, and several others voting No.

The Federal Motor Carrier Safety Administration will publish a rule next week containing tough new penalties against carriers that ignore safety rules.

Under the Patterns of Safety Violations Rule, the agency will be able to shut down a truck or bus company with a history of violating federal safety regulations on purpose.  

The rule is one of the new enforcement tools that the agency has developed in recent years to target high-risk carriers that endanger travelers by avoiding or covering up their negative history of safety compliance.

More details coming as soon as FMCSA publishes the new rule.

Teamsters union leaders on Friday announced a tentative contract agreement with Overland Park-based YRC Worldwide Inc. that the struggling company called the “best — and only remaining — path forward.”

A statement from the International Brotherhood of Teamsters said union leaders had engaged in “round-the-clock negotiations” with YRC officials since the trucking firm’s own contract proposal was overwhelmingly voted down last week by union members.

“We worked hard to find alternatives to save this company and to protect the jobs of our members at YRC,” Teamsters general president Jim Hoffa said in the statement.

The new proposal will be presented Tuesday to leaders of the many Teamsters locals that represent YRC’s 26,000 union employees throughout the country. That group will decide whether to present the proposal to a member vote.

YRC had said it needed its first proposed deal to convince lenders to refinance more than $1 billion in debts YRC can’t repay. Chief executive James Welch had emphasized that all employees jobs, not just those of the Teamsters members, were riding on the vote and refinancing.

“The outcome of this week’s discussions is critical to the future of the company,” Welch said in a statement issued Friday after the Teamsters announcement. “The (contract) extension is something our employees can have confidence is the best — and only remaining — path forward.”

YRC’s statement, released after the financial markets closed, said the revised proposal addresses concerns that union leaders and members had about the original offer. The Teamsters said 61 percent of the nearly 20,000 ballots cast had rejected the first pact.

Under that plan, pay raises scheduled for this year and next would have been replaced with one-time bonuses of roughly equal size. The swap, however, would have meant that employees would have collected the amount only once rather than every year as with a raise.

Other proposed changes reduced vacation pay, froze the pay of some employees but not others, created a lower pay scale for employees newly hired for some jobs, and instituted penalties company-wide for repeated absenteeism.

YRC’s original proposal also would have extended the current labor contract into 2019, continuing a 15 percent pay cut in place since 2009 and pension cutbacks as well. The current contract runs through the end of March 2015.

The company, which operates YRC Freight and is one of the nation’s largest trucking firms, said the new proposal would extend its labor agreement through March 2019, but offered no other details about its terms.

YRC’s statement also pointed out that the revised proposal came about through negotiations with the Teamsters union. YRC’s first offer had not.

The Teamsters’ statement said the tentative proposal, if approved by a member vote, would give YRC a way to substantially reduce its debt. It also called on lenders to help out.

“We recognize that YRC will have to go back to the financial market to obtain financing,” Teamsters freight division director Tyson Johnson said in the statement. “But the market needs to understand that YRC’s front line workers are the lifeblood of the company and, while willing to play a role, will not shoulder the entire burden.”

YRC’s debt load mounted after a series of acquisitions several years ago, and it forced the company to make sharp cuts during the recession to stay in business.

In late December, the company announced it had an agreement with lenders and investors that would have reduced its debts by $300 million. The deal, however, was dependent on the first contract proposal passing. YRC did not say Friday whether that agreement would still be available if the new offer passes.

YRC has a debt payment of $69.4 million due Feb. 15.

The company’s stock gained 35 cents, or about 2 percent, and closed Friday at $15.82 before the report of the agreement. Shares rose 21 percent Thursday on news the two sides were meeting.

January 18, 2014.  YRC Teamsters will be voting once again on a contract extension, this time in union halls on January 25-26.  The proposal, reportedly toned down from the initial “wish-list” proposal by YRC, was negotiated with the IBT.

We will publish the full proposal and other information as soon as it is available. The “two man” meeting of local officers to see the proposal will be Tuesday, January 21.

Ken Hall had a long side-bar meeting with Harry Wilson on Wednesday; YRC management requested the expedited vote to have time to work with lenders to get debt refinancing in place quickly.

Hall has inserted himself into more and more of IBT operations and bargaining.  Wilson was appointed to YRC’s board by the Hoffa-Hall administration.

Many YRC Teamsters, who overwhelmingly rejected the first offer, have said they would consider an extension without the “wish-list” of concessions.

January 16, 2014.  YRCW CEO James Welch now says that the company will “revise its proposal” for a contract extension, to work with the Teamsters and with their lenders to enable the company to re-finance its debt.

In a statement issued today. Welch admitted that “re-voting the same proposal is not an option.”

Teamsters at YRCW clearly gave Welch that information with the overwhelming rejection of the company’s first extension proposal. Welch now plans to deal with the International union to craft a Plan B.

The Kansas City Star reports YRC intends to revise proposal.

January 15, 2014: YRCW Teamsters are asking: where are Hoffa and the IBT Freight Division? 

YRCW terminal management personnel are working over Teamsters, asking them to call the IBT and request a re-vote, while hinting of a possible closure. The IBT Freight Division has stated there will be no re-vote of the same proposal. We can all agree on that.

Hoffa and Freight Director Tyson Johnson are MIA, leaving YRC Teamsters to fend for themselves. That’s not leadership.

The International Union should step up to the plate and meet with YRCW, while simultaneously dealing with the banks to save Teamster jobs without completely gutting the contract.

It’s time for Hoffa and Hall to take some responsibility. Freight Director Tyson Johnson says he never bargained with the company over the proposed extension. What was he doing when he met with them?

26,000 Teamsters jobs in the heart of Teamster power are on the line.  It’s time to forget politics and looking out for Harry Wilson’s million dollar fees, and get to work saving Teamster jobs.

January 15, 2014.   Today is the 50^th anniversary of the National Master Freight Agreement, first signed on this date in 1964.  It covered 400,000 Teamsters and was the culmination of decades of organizing, starting with the courageous Minneapolis strikers of 1934.

It was also the high-water mark of Jimmy Hoffa, who came up from the streets of Detroit and fought his way to the top of the Teamsters Union, with the help of the mob. He was later convicted of crimes against the members in two separate jury trials. One was for selling out carhaulers and then bribing the jury, and the other was for using the Central States Pension Fund for personal gain.

In Hoffa’s last interview in 1975, he emphasized the importance of national contracts and strategies, and attacked the Teamster leadership for flying around to resorts instead of organizing more master contracts. He was right.

TDU celebrates our Teamster history, and what our union has done for members and the country, and we learn from our history.

The decline of the NMFA came from a number of sources.  Attacks from corporations, the deregulation of 1980 set the stage. But the cruelest cut was the abandonment of trucking Teamsters by none other than Hoffa’s son: James P. Hoffa.

He has abandoned freight, UPS Freight, and carhaul Teamsters. He has rammed through weak contracts, divided members, and done nothing to organize in this center of Teamster power. He came in to office 15 years ago bragging that “the Hoffa name means power.” 

It did mean power in 1964.  Today it stands for PR.  Tom Leedham calls it “celebrity business unionism” and he’s right.

Click here if you are fed up with concessions and ready to stand up for change in our union.

Today, on this 50^th anniversary, we call for Hoffa to stand up for freight Teamsters. A start would be to defend the 26,000 YRCW Teamsters, who have done their part by rejecting the shredding of their contract.  Don’t walk away and abandon them. Take a pro-active approach to bargaining with YRCW and with their banks and creditors, to save their contract and their jobs. Do your job.

Today, we call upon Teamster members to do something else. It is just two years until there will be delegate elections to nominate a new General President.  Nominations in most locals will be in January 2016. Are you ready to start now to lay the basis to be a delegate to the 2016 Convention?  We need hundreds of delegates, to nominate a slate of candidates who have the principles to take this union in a new direction.

It will not happen from above, it will start in the locals – in your local – with you. We are ready to help.

Click here if you are fed up with concessions and ready to stand up for change in our union.

If it hopes to survive as a company, YRC Worldwide needs to act quickly after Teamsters employees rejected extended wage and benefit concessions the trucking operator’s lenders made a prerequisite for refinancing $1.36 billion in debt.

However, the nation’s second-largest less-than-truckload operator has only one route forward — back through the same Teamsters who rejected the concessions.

That means either a second vote on the same failed proposal — a plan already rejected by 69 percent of the 19,000 YRC Teamsters who filled out a ballot on the contract — or an amended proposal, one that includes input from the union.

If it can’t forge an agreement with its Teamsters employees, the companies choices become less palatable and more disruptive, ranging from further cutting of its own unprofitable operations and perhaps even the sale of some profitable ones.

No Negotiations Before 'No' Vote

In a statement, CEO James Welch blamed the failure of YRC’s proposal in part on “timing of events related to our refinancing.” Many employees returned ballots before YRC secured a $300 million debt reduction agreement Dec. 23 and a larger $1.15 billion debt refinancing deal — confirmed but not announced — in January.

“We believe that was information employees needed to make a fully informed decision,” Welch said. But would that information alone change a vote?

Comments posted by Teamsters on Facebook, truckingboards.com and other online forums showed many were angry with YRC and the international union for presenting them with a proposal without negotiating beforehand. The Teamsters union agreed to allow a vote, but stayed neutral on the proposal itself.

Many Teamsters were angry with a proposal that would extend a 15 percent wage cut and 75 percent cut in company pension contributions — first agreed to in 2009 — through 2019, even when sweetened with a share in future profits.

“Our members have made huge sacrifices to keep this company alive and a majority made the decision not to sacrifice anymore,” said Tyson Johnson, director of the Teamsters National Freight Division and co-chairman of its negotiating committee.

The dissident group Teamsters for a Democratic Union called for negotiations. YRC Teamsters may accept concessions and even “changes they don’t like,” the TDU said, but not “a complete giveaway, with no bargaining by their own union.”

Debt Deadlines Loom for YRC

Whatever course it chooses, YRC Worldwide needs to act fast, as it faces the first of three major debt deadlines Feb. 15, when $69.4 million in long-term debt comes due, followed by $325.5 million Sept. 30 and $664.7 million in March 2015.

YRC Worldwide has a $1.15 billion debt refinancing deal and an additional $300 million debt-for-equity swap agreed to in December ready to go, but those agreements depend on securing concessions from those Teamster employees.

The good news is YRC Worldwide doesn’t face imminent bankruptcy — the company ended the third quarter with $233.7 million in liquidity, and should be able to cover that first round of debt, though not without considerable pain.

CEO James Welch assured shippers Jan. 10 that YRC’s trucks were still rolling and that, for now, it’s “business as usual” at YRC’s LTL carriers. But Welch will also have to move quickly and communicate clearly to hold onto shippers’ business. Shipper defections in the first quarter, typically a weaker period in trucking and one this year seeing disruptions from severe winter weather, would hurt YRC just when it needs more business.

26,000 Jobs at Stake

The breadth and depth of YRC’s defeat — despite an extensive  campaign for a “yes” vote by management that included DVDs, televised town hall meetings, terminal visits and mailings — indicate a need for more than tweaks to its proposal.

“They have to modify the message and have a different messenger,” said Satish Jindel, president of transportation research firm SJ Consulting Group. The stakes for the company and its employees must be made clear, and a neutral third-party without a stake in the company may be best situated to do it. Then those who voted “no” in the last ballot “have to look at what happened at Red Star or Consolidated Freightways and ask, ‘Do I want to be in that position?’” Jindel said. Both those LTL carriers shut down, putting thousands of Teamsters out of work.

Jindel noted more than 6,000 of YRC’s 26,000 Teamsters didn’t cast a ballot. The company needs to win over more of these “independents,” too, he said.

“We believe an incredible urgency would result between Teamsters leadership and the company once all constituents recognize that the jobs of 26,000 people are at stake,” BB&T Capital Markets analyst Thomas S. Albrecht said in a note to investors Jan. 9.

Even without concessions, “We believe (but we do not know this for sure) the banks will likely work with YRC to push out maturities and terms,” Albrecht said. Absent a new contract, however, “deferred payments are about the best YRC can achieve with the banks,” the analyst said, which would mean more mounting interest payments, which would make it even harder for the company to return to profitability.

YRC Could Sell Assets

Albrecht also broached another possibility. “Selling New Penn or even the old US Freightways (Reddaway and Holland) could be options,” he said.

That’s an extreme step YRC most likely would try to avoid, and not just because those carriers are showing a profit — $57.2 million on revenue of $1.3 billion in the first nine months of 2013. “Any sale would be viewed as a ‘fire sale, which would not be done at values commensurate with existing asset values,” said Albrecht.  Selling the entire regional network could hurt YRC Freight, he said, by leading to a loss of common customers. But YRC Worldwide and predecessor Yellow have sold regional businesses before — Saia, Jevic Transportation and Preston Trucking.

Such a sale would in some ways bring YRC Worldwide full circle to where it was before Yellow purchased Roadway Express in 2003 for $1.1 billion. YRC Freight would be a smaller LTL carrier than Yellow Transportation was at that time.

“All of this means that YRC Freight needs to accelerate its own operational turnaround,” Albrechtsaid. “This could involve job cuts, additional terminal reductions and a smaller geographic footprint, none of which is ideal.”

That’s why reaching an agreement on a new contract would be ideal, for all those involved, including the 250,000 shipper customers of YRC Worldwide.

The decisive rejection yesterday by YRC Worldwide Inc.'s unionized workers of the company's proposed five-year contract extension was more than a referendum on the merits of the proposal. It was a referendum on the past four years.

Since 2009, the less-than-truckload (LTL) carrier's 26,000-member rank and file have agreed to multiple concessionary agreements to keep their employer alive. The givebacks have resulted in reduced wages and vastly diminished pensions. For workers who may have owned company stock before 2009, an agreement reached on New Year's Eve of that year to swap $530 million in debt for $1 billion in new equity—while it kept the company out of bankruptcy—diluted the value of their holdings to virtually nothing. What remained for the workers were their paychecks, their health insurance, and a pension that had been cut by 75 percent.

Click here to read more at DC Velocity.

The workers of YRC Worldwide Inc. represented by the Teamsters union have soundly rejected the company's proposal to extend the current five-year collective bargaining agreement until 2019, according to a final tally disclosed this evening.

Of the roughly 19,600 members who cast ballots, 12,028 rejected the proposal, according to the Teamsters for a Democratic Union (TDU), a dissident group. The union represents about 26,000 workers. The current contract runs until March 2015.

The outlook for ratification appeared dim earlier in the day as many of the larger Teamster locals rejected the company's offer, TDU said. The Teamsters said this evening that the union had not been given the final tally and could not comment. A spokeswoman for Overland Park, Kan.-based YRC was unavailable to comment.

YRC had pinned much of its hopes on securing a contract extension from its workers. The company is saddled with $1.4 billion in debt, and it has said that its high borrowing costs make it impossible to reinvest in the business after the debt is serviced and other fixed costs are paid. The first principal payment of $69 million is due Feb. 15. YRC confirmed that it had lined up about $1.15 billion in loans to refinance its debt. However, its lenders have said they will not agree to refinance the debt without an extended labor contract in place.

YRC CEO James L. Welch has said the company would not file for bankruptcy protection if the extension wasn't ratified. The extension would have bought five years of labor peace and would have helped the struggling company cut about $100 million a year in costs. Welch expressed confidence in several interviews with DC Velocity that the rank and file would approve the extension.

Under the proposal, union workers would receive, in lieu of pay raises, $750 in annual bonuses over the first two years of the extended contract. The first bonus would be paid in early 2014 should employees ratify the contract extension and lenders agree to the debt restructuring. After the first two years, workers would receive net annual raises equal to 34 cents an hour. Vacation pay would be capped at 40 hours per week or 1/58 of annual earnings. Three-week paid vacations would only be available to workers with 11 years' seniority.

Pension contributions, which were suspended in mid-2009 and resumed in 2011 at one-fourth their prior amount, would be fixed at the current levels through the life of the extended compact.

Profit-sharing programs would kick in if YRC Freight, the company's struggling long-haul unit, achieves a 97-percent operating ratio per year starting in 2015. Workers would share in a larger percentage of profits should the unit's ratio decline further. For YRC's profitable regional units, profit sharing would begin at 94.1 percent. Operating ratio is the ratio of expenses to revenues and is a measure of a transport company's efficiency and profitability.

The contract would allow YRC to subcontract out up to 6 percent of its driver work, with protections for all currently employed drivers. Welch has said the practice would be implemented only in cities where YRC experiences a shortage of drivers.

Ken Paff, TDU's national organizer, said Teamster General President James P. Hoffa and others in the union's upper strata should immediately begin bargaining with YRC while at the same time working with lenders to hammer out financial agreements that preserve union jobs without completely gutting the contract. Given that the deadline for the first principal payment on YRC's debt is just five weeks away, "there is no time to lose," Paff said.

Paff said YRC Teamsters could accept a contract extension that includes language the rank and file won't like. He said, however, that the members "did not accept a complete giveaway," and he criticized the union for failing to bargain on the members' behalf. TDU is often at odds with mainstream Teamster leadership.