February 14, 2013: Nearly two months after putting a long list of concessions on the bargaining table, ABF management refuses to take any of them off the table. That's the report IBT freight negotiator Gordon Sweeton gave on a February 13 conference call for Teamster local union officers.

Management's threat is that if they don't get the concessions they want, they will consolidate some terminals and downsize the network.  But they are free to do that under the contract, and could do so today if they wanted. And they can do it whatever the outcome of bargaining.

They made that same threat leading up to the May 2010 vote on wage concessions. They're hoping Teamster members forget that fact. It didn’t work then and shouldn’t work now.

Already Got Pension Concessions

ABF already got some pre-contract relief from the national master contract. Last August, they were required by the contract to pay a $1 increase in benefit contributions, to our pensions and health and welfare funds. But the company only put 35¢ into health and welfare and zero into pension in the Central States and Western Conference Funds; those two funds cover a big majority of ABF Teamsters.

And it is almost certain that they will not have to put any new money into those two pension funds in the new contract: they can continue the same rate.

Teamsters Willing to Help, Not Concede

ABF Teamsters are not asking for the moon. But they do expect to maintain their health care and wages, and not let the company turn it into a nonunion-style operation.

It's time for management to dump the threats and bargain. The contract expires in just six weeks.

It's time for members be informed, spread the word, and stand together as Teamsters.

Click here to stay informed and get involved by signing up for email updates from www.NoFreightConcessions.org.

YRC Worldwide CEO James Welch is pleased to see the company finish the year strong after starting with a $49 million operational loss in the first quarter.

On Friday, the Overland Park-based company (Nasdaq: YRCW) reported positive annual consolidated operating income for the first time in six years.

Welch said the positive annual results reflect a shift in philosophy to a “laser” focus on freight operations after years of attempting to diversify operations.

“When I returned to the company in July 2011, it wasn’t focused on what it does best: LTL (less-than-truckload) transportation,” Welch said. “(It’s) been a year of getting things cleaned up ... making sure employees are focused on North American LTL.”

The contrast between the company’s current financial situation and the one it faced before Welch became CEO is stark. In March 2011, the firm teetered on the brink of bankruptcy as the national economic downturn caused significant losses for YRC’s freight business.

In 2012, the company also shook up its personnel, brining in new hires and bringing back former YRC employees like Darren Hawkins, formerly of rival LTL carrier Con-Way Inc. (NYSE: CNW).

The more focused approach on freight has energized employees as well.

Welch said he told his employees, “(We can) continue to lay down on the mat and get kicked around ... or get back in the fight.”

“(They) want to do a good job ... (and we) get them channeled in the right direction,” Welch said.

Not everything was positive, though. Welch said the company continues to deal with a “choppy” economy for transportation, and he is disappointed with the company’s revenue, which declined by .4 percent between 2011 and 2012.

Welch said YRC will continue to work on expanding its freight client base by increasing its sales operations in 2013. He did not say which clients the company is pursuing.

“We are prepared to do whatever it takes to improve our sales effort,” Welch said.

The company plans to roll out new technology in 2013, including handheld devices for YRC’s drivers, and is poised to “execute,” he said.

“2013 is (the) year we perform,” Welch said.

More than three years after it closed its Chicago Ridge terminal, trucking company YRC is taking a look at reopening it.

The company, formerly called Yellow Roadway, in December filed an application for a business license to re-establish the terminal, 10301 Harlem Ave., according to George Witous, Chicago Ridge village attorney.

In a memo sent last month to Chicago-area employees of YRC Freight, the company’s main trucking subsidiary, a company official indicated that efforts to reopen the terminal are at their earliest stages.

Matters such as obtaining the business license “will take some time to finalize,” and “there is a significant amount of construction time that will be required to bring the facility back to a condition that allows it to be operational,” according to the memo distributed by Rich Ganch, area director of operations for YRC Freight.

A spokeswoman for YRC would not confirm the company’s plans and said the firm had “no comment whatsoever.”

The terminal was shuttered in late 2009, and the property has been dormant since. Witous said the site is about 75 acres.

Locally, YRC also has a truck terminal near U.S. 30 and the Calumet Expressway in Sauk Village.

The company rapidly grew into one of the nation’s biggest freight haulers, with Yellow Transportation and competitor Roadway merging in 2003, and the combined company buying regional trucking company USF — operator of the Holland, Reddaway and New Penn lines — in 2005.

When the recession slashed revenue for trucking companies, YRC scrambled to cut costs and sell assets, and the International Brotherhood of Teamsters agreed to wage cuts and a temporary halt to pension contributions by the company.

At the time the terminal closed, longtime Chicago Ridge Mayor Eugene Siegel wasn’t exactly broken up about the company trucking out of town, calling it “not a big loss to the village” and expressing hope that the property could be redeveloped for retail use.

After the terminal closed, there initially were reports that the property had been sold, but Witous said village officials understand that YRC still owns it. Cook County tax bills for the site show that YRC was billed last year for the property tax, totaling a little more than $1.3 million.

Witous said that, along with obtaining a business license, YRC would need to ensure that the property is in compliance with village building codes, although no code violation citations have been issued to the company.

He said village officials have had an “ongoing conversation over years” with YRC about the property, and that YRC last year applied to the village to fix up a terminal building but didn’t follow through.

ABF Freight System Inc. expects contract negotiations with the International Brotherhood of Teamsters to be resolved by a March 31 deadline, but the CEO of its parent company said Wednesday that the firm is exploring options in case a new agreement can't be reached.

Judy McReynolds, CEO of Arkansas Best Corp. of Fort Smith (Nasdaq: ABFS), said Wednesday during the trucking and logistics company's fourth-quarter earnings call that without a new contract, ABF would consider closing terminals and distribution centers as a cost-cutting measure.

ABF is seeking a single contract to help "lower expenses" through uniformity in cost structure, time off, scheduling, benefits and other areas related to the company's 7,500 Teamster employees across the United States.

"We're very focused on having this accomplished by the end of March," McReynolds said "… But there are options."

McReynolds declined to give specifics on the number of terminals or distribution centers that ABF would consider closing. But she said a plan is in place if ABF isn't satisfied with the end result of negotiations.

McReynolds' comments came the same day the firm reported a fourth-quarter net loss of $7.9 million compared to a profit of $1.4 million during the same quarter last year, and a full-year net loss of $7.7 million compared to a profit of $6.2 million in 2011. In the company's earnings release, McReynolds said the loss was troubling given that revenue remained roughly the same and said she hopes the labor negotiations will result in savings for the company.

In all, the company's preference is to replace an operating structure with the Teamsters that McReynolds described as "outdated and cumbersome." Beyond the National Master Freight Agreement, there are as many as 15 supplemental contracts that make operating more difficult and costly, she said.

Last month the two parties exchanged initial contracts. ABF's position is that a uniform deal will help lower costs and provide more flexibility in operations. The two sides were reportedly "far apart," following the initial meeting. They met Jan. 7 in Kansas City and are on schedule to meet every other week, McReynolds said.

ABF is handling contract talks with the Teamsters on its own for the first time. Previously, the company has been part of group negotiations.

Teamster's negotiating committee co-chair Gordon Sweeton released a statement earlier this month and said ABF's proposal seeks "to destroy the NMFA standards that have been in effect for decades and served ABF well. We hope the company will bargain in a traditional manner so that we can make progress on the important issues from the start."

Eliminating terminals and distribution centers — thereby cutting jobs — is just one of the options on the table, McReynolds stressed.

"We're prepared for any of the paths to occur," McReynolds said before later adding, "We really don't need to have a discussion at this point about potential outcomes. Obviously you have to plan for things. We do have a plan."

4Q, Yearly Losses

Arkansas Best's fourth-quarter net loss of $7.9 million, or 31 cents per share, came after profit of $1.4 million, or 5 cents per share, during the same quarter last year.

The company said the loss came amid "generally flat," year-over-year revenue, tonnage and pricing at its ABF Freight unit were offset by higher costs. For the quarter, revenue was rose slightly to $537 million from $463.2 million during the same quarter last year.

It noted that in the same period, its non-asset-based businesses, including freight brokerage and vehicle roadside and preventative maintenance, were profitable and posted higher revenue.

"We are pleased with revenue growth and improving profitability at our emerging businesses as they added up to more than 20 percent of our total company fourth quarter revenue," McReynolds said in a news release.

"Expanding our portfolio of expedited and premium logistics services was a major initiative in 2012 as our customers' supply chains grow ever more complex. We are encouraged by the trends we have seen in these businesses," she said. "Among other things, we added key sales and customer service personnel and invested in service-enhancing technologies, all of which were well- received in the marketplace."

Quarterly results include an after-tax charge of $2.4 million, or 9 cents per share, related to an actuarial adjustment to ABF's workers' compensation expense.

For full year of 2012, Arkansas Best had a net loss of $7.7 million, 31 cents per share, including the workers' compensation expense increase. This compares to profit of $6.2 million, or 23 cents per share, in 2011.

Arkansas Best's full year revenue was $2.1 billion compared to revenue of $1.9 billion in 2011.

January 28, 2013: ABF ships nonunion FedEx to Teamster Members

"ABF Teamsters win company points for safe driving, etc. They can redeem these points for ABF logo shirts, jackets, toy trucks, etc. Sad to say, ABF management uses nonunion FedEx instead of Teamsters at UPS to deliver. They could also use their own ABF inter-terminal mail-bag system they regularly use to send company documents and small parcels to terminals. It would be a way of keeping the money in house rather than giving it to the nonunion competition."

Emmet Ramsay
ABF Road Driver
Local 391, Winston Salem, NC

January 25, 2013: YRC has withdrawn the proposed change of operations which would have essentially thrown 120 Teamster office clerical workers out of a job. 

It’s good news for office Teamsters at 12 terminals nationwide. The proposed change would have consolidated the billing and collection work to an office near Springfield, Mo. While the clerks would have the right to follow their jobs, very few planned to do so.

Teamster clerks and some locals objected to the change. YRC is hiring at the nonunion billing center in Des Moines, and no nonunion clerks would have been eliminated or forced to move. This point was raised by clerks who objected to the change.

YRC CEO Jeff Rogers stated in a memorandum that, "there are currently no plans to file a similar change." Let's keep it that way.

January 28, 2013: You know it's time for negotiating the next contract when ABF starts bombarding members with the message that times are tough.

So tough that the company claims a loss of $230 million since 2009. The company has mailed a DVD explaining the state of their finances and upper management has visited a few terminals to plead their case.

"It makes you wonder how much ABF spent on this," commented Doug Wylie, a city driver out of Worcester, Mass. "Management had Teamsters watch it in the terminal on the clock. And on top of that, on the busiest day of the week, my manager had me watch another video on the basics of the pallet-jack and lift-gate deliveries. I'm beginning to understand why they have a difficult time making a profit."

Members remember similar cries of poverty in 2010. They voted down an attempt to secure concessions and may have to prepare for a similar vote when the proposed contract comes up for ratification.

Teamsters have cited the $185 million purchase of Panther, the increase in upper management salaries and perks, and other aspects of ABF expenditures as the likely reason for ABF showing little gain over recent years.

"It looks like the IBT did some good research on ABF finances and are prepared to take a no giveback stance," said long time TDU activist and Milwaukee city driver Paul Host. "Members need to stand strong and not fall into the trap of ABF's propaganda."

Stay informed at NoFreightConcessions.org. No Freight Concessions is a network of freight Teamsters working together to defend the contract and say NO to any further concessions in freight.

"It looks like the IBT did some good research on ABF finances and are prepared to take a no giveback stance.

"Members need to stand strong and not fall into the trap of ABF's propaganda."

Paul Host, Local 200
Milwaukee

Negotiations between ABF Freight Systems Inc. and the International Brotherhood of Teamsters continued in Kansas City this week, and the two parties are no closer to an agreement, a release from the union said.

The parties recessed on Wednesday afternoon after making little progress toward a deal. Talks between ABF, a subsidiary of Arkansas Best Corp. (Nasdaq: ABFS), and representatives of ABF's 7,500 union employees are not scheduled to resume until Jan. 28.

The current agreement between the less-than-truckload carrier and the Teamsters expires March 31.

ABF, based in Little Rock, Ark., seeks an agreement similar to its chief unionized rival, Overland Park-based YRC Worldwide Inc. (Nasdaq: YRCW), to cut its labor costs. The company faces pressure to reach an agreement as soon as possible, before its clients begin to seek out a new logistics provider, according to Ken Paff, the national organizer for Teamsters for a Democratic Union.

In a release, the union said ABF isn't budging on its demands to cut labor costs by increasing the use of split-shifts, part-timers, and subcontractors; reducing vacations and holidays; eliminating supplements; and asking workers to work across classifications.

In return, the union wants an extra dollar an hour in pay each year, among other benefits.

The union maintains that ABF's measures are an attempt to violate the National Master Freight Agreement. ABF maintains that none of its competitors, namely YRC, follow the document, which was drafted in the 1960s.

The Teamsters asked for a breakdown of how exactly the measures would reduce ABF's labor costs, and ABF was not able to provide them, the release said. The company will "try to provide the information when negotiations resume," a release said.

"The failure of the Company to have the cost analysis of its specific proposals at its fingertips strongly suggests the Company was not prepared to engage in legitimate bargaining," Gordon Sweeton, co-chairman of the Teamsters' National ABF Negotiating Committee, said in a release. "Its proposal is simply an overreaching effort designed to bludgeon worker rights."

ABF has not released a statement on the situation since Dec. 21. Company representatives declined to comment.

January 16, 2013: Interstate Distributor Company agreed to pay $4.85 million and signed a consent order to settle a lawsuit filed by the Equal Employment Opportunity Commission (EEOC) on behalf of several employees.

According to the EEOC's suit, if an employee needed more than 12 weeks of leave, Interstate automatically terminated them rather than determining if it would be reasonable to provide additional leave as an accommodation.

This is an important point. Twelve weeks per year is the maximum leave-time (it may be taken in weeks, in single days, or partial days) under the Family and Medical Leave Act (FMLA), but “extending a leave time for an employee who has good prospects of recovery is a reasonable accommodation” which the employer must make, according to The FMLA Handbook, by Robert Schwartz.

Thus the employer’s blanket limitation of 12 weeks leave time was illegal under the Americans with Disability Act (ADA).

Teamsters with family and medical problems have rights, and need the know-how to enforce them.

The EEOC’s report on the case is available here.

Click here to order the The FMLA Handbook.

A few days before Christmas, ABF Freight System and the Teamsters union began talks on a new contract to replace the one that expires March 31. The acrimonious talks could not have gotten off to a rougher start had Ebenezer Scrooge been at the negotiating table.

After breaking away from chief rival YRC Worldwide in an attempt to negotiate separately with the Teamsters National Freight Industry Negotiating Committee (TNFINC), ABF made an initial contract offer that the union says insults ABF’s 7,500 drivers, dockworkers, mechanics and clerical staff.
 
The Teamsters immediately responded with a press release that called that initial offer insulting and a “non-starter.”
 
A second round of negotiations in Kansas City starting Jan. 7 did not fare much better, according to the head of the Teamsters freight negotiating committee.
 
“ABF’s initial contract proposals ... seek to destroy the NMFA standards that have been in effect for decades and served ABF well,” Gordon Sweeton, co-chairman of the Teamsters negotiating committee said in a press release.  “We hope the company will bargain in a traditional manner so that we can make progress on the important issues from the start.”
   
Among the initial demands by the nation’s sixth-largest LTL carrier, ABF wanted to eliminate all supplemental agreements to the basic contract; reduce paid time off; eliminate the longstanding grievance procedures that have been in effect for more than half a century; expand use of nonunion subcontractors, expand use of worker surveillance; and create new, lower-paying part-time positions in most job classifications.
 
ABF has responded with details of its current financial plight. Its stock price has plummeted by more than 80 percent in the past two years to trading around $9 a share at press time. It says its high labor costs are responsible for more than $230 million in losses since 2009.
 
ABF says its goal is to secure a new contract that allows ABF to “substantially lower its costs, become more flexible and better compete in a rapidly changing marketplace” that has seen hundreds of union carriers go out of business and non-union carriers proliferate.
 
In a press release describing its negotiating goals in general terms, ABF says it is negotiating its own national contract to create “an unprecedented opportunity” for both parties to work together and fix the labor cost problems that have led to its current financial plight.
 
In its statement, ABF says was “disappointed” to see a public update distributed by the Teamsters prior to the start of its contract talks stating that “management labor costs” are excessive, and that an economy growing at 4 percent annually would somehow fix ABF’s problems.
 
“Neither of these statements is correct, and it is important to clarify misconceptions and focus on what ABF really needs to compete,” the company said in its statement.
 
As for executive compensation, the company says that parent Arkansas Best Corp. CEO Judy McReynolds’ salary and incentive was 58 percent of the average of the other similar industry companies’ CEOs in 2011. In other words, ABF says she was paid about 40 percent less than her peers. In addition, all of the compensation of ABF officers including Ms. McReynolds adds up to less 0.5 percent of ABF’s costs, according to the company.
 
ABF claims chief rival YRC paid its former CEO Bill Zollars $2.5 million in total compensation for just five months in 2011 before he left the company.  That’s nearly twice what Arkansas Best’s CEO was paid for the entire twelve months of 2011, ABF says.
 
In contrast, ABF says its Teamster employees enjoy the highest levels of pay relative to all of their peers in the LTL industry in total compensation including wages, health and welfare, and pension. Last year alone, ABF paid $244 million in just union pension, health & welfare. More than half of that huge amount, $132 million went to union pension expense alone.
 
Further complicating matters are two extraneous factors that privately are infuriating the Teamsters:

• The union is currently the subject of a lawsuit by ABF over the 15 percent wage givebacks that the union rank-and –file approved to keep financially ailing YRC Worldwide, its chief competitor, alive; and

• Last June’s purchase by ABF parent Arkansas Best Corp. of Panther Expedited, a non-union expedited carrier specializing in same-day shipments, for $150 million.

ABF says its problems will not be fixed by an improvement in the economy but must be solved by lowering its costs and gaining greater flexibility.
 
It claims that since 1999, six out of 10 union LTL jobs have disappeared while non-union jobs have increased 160 percent. Even during periods when the economy was strong, this trend continued. Following a peak of 500,000 Teamsters covered by the National Master Freight Agreement in the 1980s, ABF is now negotiating on behalf of just 7,500 workers.
 
ABF says these structural changes and job trends in the LTL industry will not be fixed by an improvement in the economy. “In any case, there is no projection or past level going back to historical growth trends since the 1930s that will produce the levels of growth needed to bring ABF back to its pre-recessionary earnings,” the company says.
 
ABF is playing hardball. It says that unless it can “dramatically lower” its union labor costs and gain flexibility through mutual agreement with the Teamsters, it will make “extensive changes” to the network including closure of terminals and distribution centers will occur.

“The severity of those changes depends upon the savings ABF is able to achieve,” the company says. It says its current cost structure of wages, health and welfare and pension “simply is not sustainable” in today’s LTL market. “Burdensome costs have directly resulted in lost market share and lost jobs at ABF. That is a fact,” the company says bluntly.
 
The Teamsters responded by accusing ABF of “cherry-picking” statistics from the LTL competitors.
 
“To say the least, this initial offer from ABF is a real non-starter and will do nothing to advance the dialogue between the parties,” Sweeton said in a press release. “We know the company needs some relief. But this strategy is going nowhere fast with our committee.”
 
The Teamsters say ABF is “misguided” in its belief that its labor costs are primarily to blame for ABF’s financial losses.
 
“The poor state of the economy over the past four years created losses at all large LTL companies and the labor-intensive type of freight operations ABF conducts are issues as well,” Sweeton added. “As for pensions, the company’s pension costs in its largest fund, the Central States, have been frozen the past two years with health and welfare costs only seeing modest increases during that time as well.”
 
The Teamsters are calling on ABF to take a “more balanced” approach in its contract talks.
 
“Teamsters have worked hard to make ABF successful,” Sweeton said. “Management needs to understand this and respect our members’ efforts, not denigrate those efforts.”