Teamster union locals representing 7,500 employees of ABF Freight Systems voted late last week to approve a two-year contract proposal that will be presented to the carrier when negotiations begin Dec. 18.

The proposed two-year duration, agreed to Nov. 29 at a meeting in Kansas City, is designed to coincide with the 2015 expiration date of the Teamsters contract with YRC Worldwide Inc., ABF's chief unionized rival. The language is likely to be rejected by the company, which will demand a lengthier contract period, according to a note from the Teamsters for a Democratic Union (TDU), a dissident group that often clashes with union leadership, notably General President James P. Hoffa.

The proposal calls for a $1 per hour wage increase, per employee, during each of the next two years. ABF is also likely to reject that provision and will instead seek language asking for little or no wage hikes, TDU said.

In addition, the union has requested its pension, health, and welfare benefits be maintained at current levels. That is likely to be rejected as well, TDU said.

The current five-year compact expires March 31, but ABF would like a deal reached well before then.

Executives at ABF, a unit of Fort Smith, Ark.-based Arkansas Best Corp., have declined all comment on issues relating to the contract talks. Teamster officials have not replied to several requests for comment.

Meanwhile, TDU has reported that an agreement was reached in August between ABF and the Teamsters that would be tantamount to a contract concession for about 1,000 employees in 13 western states.

According to the group, ABF was contractually required on Aug. 1 to increase by $1 per hour, per employee, the union's combined pension and health and welfare benefits. Of the total amount, employees in the western states were to receive an additional 65 cents an hour for pension benefits and the remainder was to be allocated to health and welfare benefits.

Instead, the funds earmarked for pensions have been placed in an escrow account with the issue of the allocation to be settled in the contract talks, TDU said.

TDU said in a late November note that the rank-and-file did not vote on the language and that many were unaware of it until the group circulated the note on the eve of the Kansas City meeting.

Ken Paff, national organizer for the TDU, said any contractual language can't be modified while the contract is in force without a vote in the rank-and-file. Paff said, however, that because the funds are in an escrow account and not being spent elsewhere, labor would not have a strong legal case.

November 30, 2012: On November 29 officers from all freight locals met in Kansas City to hear the International Union's plans for bargaining with ABF, including a union proposal for a two-year contract.

The meeting, which lasted only a little over an hour, was conducted by Gordon Sweeton and Tyson Johnson of the IBT Freight Division, who distributed the union's initial bargaining proposals.

We encourage members to review these proposals.

The union's economic proposals:

• A two-year contract, which would align the expiration with that of YRC
• $1 per hour wage hike in each year
• Maintain present level of pension and health and welfare benefits
• Add two holidays, Martin Luther King Day and Veterans Day
• Shorten the wage progression to two years
• Raise the pay for dock casuals to 70% of scale

The company is certain to oppose all of these demands, and to put forward concessionary demands, and to propose a long-term contract.

The union is proposing very few changes in contract language. Some improvements in Article 16 (safety) are proposed, and a ban on the use of GPS or "black box" technology for discipline.

ABF's Own Contract Plan

Meanwhile, management is hard at work softening up members to accept concessions. ABF Teamsters have all received a DVD and a postcard in the mail, and many are required to watch the DVD at their terminal, on the clock. In the DVD presentation, ABF CEO Roy Slagle lays out the line for concessions.

At the Nov. 29 national meeting, the International Union officers mentioned the company's organized program against union solidarity.  There's NO plan to counter the company's propaganda, and NO plan for a positive union program to inform and unify freight Teamsters.

Pre-Contract Concessions?

Also not mentioned was the pre-bargaining concession of 65¢ per hour in benefit contributions given to ABF in the West.  A report on this deal – which very few members heard about until TDU reported it – can be found here.

Giving concessions before bargaining even starts is at-odds with the positive demands that the International union has committed to bargaining for.

Bargaining is set to open in December. The company wants an agreement in place well before the March 31 expiration.

Stay Informed – Stay Involved

The Hoffa administration's policy is to keep members in the dark, which weakens our unity and bargaining power.

Teamsters for a Democratic Union works to inform freight Teamsters to help every member to be involved. It's our contract, our future, and our Right to Vote on that contract.

Concerned ABF Teamsters – and other freight Teamsters, too – can stay informed and get involved by signing up for e-mail updates at NoFreightConcessions.org.

You can join TDU or get updated information by calling 313-842-2600 or click here to send us a message.

YRC Worldwide Inc. proposes closing 12 customer service centers, including one in Kansas City, and consolidating the work in Springfield, Mo., according to a document filed with the Teamster’s Union.

In a document dated Nov. 7, Overland Park-based YRC (Nasdaq: YRCW) requests a “Multi-Region Change of Operations hearing as soon as possible” to discuss the possible consolidation of YRC customer service, freight bill entry and collections centers throughout the country. The plan would move 123 jobs to Springfield.

The proposal calls for consolidating jobs from facilities ranging from Sacramento, Calif., to Boston. The Kansas City customer service center and its seven jobs would be moved to Springfield, the document said.

“The purpose of this change is to consolidate duplicate operations to reduce costs, improve efficiency and to provide a world-class service response to our customer base,” Lamar Beinhower, YRC’s director of labor, said in the document.

No employees will be laid off if the consolidation is approved, the document said.

The company would offer affected employees a lump sum of $2,500 to $4,000 to cover moving expenses.

Representatives of YRC, Teamsters Union Local 41 in Kansas City and Teamsters Union Local 245 in Springfield could not be reached for comment immediately.

November 28, 2012: On the eve of bargaining with ABF, the International Union has given the company a 65¢ per hour concession in the 13 western states. Members were not consulted, and most are still unaware of the giveback.

The concession was quietly implemented on August 1, by prior arrangement between ABF and the Hoffa administration. On that date, ABF was required by the contract to increase pension and health and welfare payments by $1 per hour. In the west, the allocation was 35¢ to H&W and 65¢ to pension, but the Western Conference of Teamsters Pension Fund has not received any of the 65¢.

Instead, the money has been put into an escrow account, and the matter will be settled in the upcoming bargaining. It seems likely that the money will be given back to the company.

On November 29, Teamster officers and agents from all freight locals will meet in Kansas City to hear the IBT's proposed bargaining proposals and plans.

Meanwhile, management is busy softening up Teamster members. They mailed a DVD to all ABF Teamsters, making their case for concessions.

They are also making the case to Teamster officers. For example, in early November ABF Freight CEO Roy Slagle was given the floor to address Teamster officers from across the west to present a slide show on ABF's case for big concessions, including on pensions, wages, and health coverage. Slagle cited the YRC concessions and the growth of nonunion carriers.

With the company taking an aggressive posture on concessions, and the IBT already giving them away in advance of bargaining, it will be up to rank and file Teamsters to draw a line to protect Teamster standards and benefits.

November 20, 2012: On October 4, a bunch of New Penn Teamsters near Boston showed up for work wearing skirts. Long skirts, short skirts, even plaid ones. The unusual attention-getting fashion choice of Teamsters was a protest against management harassment and pettiness.

Article 12 of the National Master Freight Agreement says that “The Employer has the right to establish and maintain reasonable standards for wearing apparel and personal grooming.” Teamsters who interact with the public understand the need for maintaining a professional appearance. What is an ongoing source of aggravation is the rigid requirement in the NMFA that shorts may only be worn “during the period May 1 through September 30.”

Every Spring and Fall there is a tug of war between members who feel they are capable of deciding when to wear shorts and management, which gets all uppity about their desire to exert their control.

A Boston Teamster might wonder if other trucking management applies this petty rule in, say, South Florida and Arizona.

Teamster members at the New Penn terminal in Billerica, Massachusetts decided they were fed up with the harassment and micro management on wearing of shorts. Article 12 has no prohibition against wearing of skirts, so Teamsters organized to buy and be fitted for skirts. Needless to say when Teamsters turned up for work in skirts there was some consternation in the ranks of management!

Despite there being no formal surrender on the issue of management rights, at this time shorts look preferable to skirts. Teamsters look forward to the day when grown men can decide, as adults, on when to put away the shorts.

The Teamster rank and file won’t be “short changed” when it comes to creative tactics.
 

November 26, 2012: On November 29 officers from freight locals will meet in Kansas City to review the contract proposals that the International union will present to ABF.  

ABF Teamsters have every reason to be concerned.

Earlier this fall, the IBT mailed contract surveys to ABF employees.  The survey results have not been revealed to members or local unions, but the survey itself was worrisome. Some of the questions were fine, but others looked like they were prepared by management, asking which concession we would like to give to the company.

It's true that ABF is operating in hard times: the economic recovery in trucking is painfully slow.

TDU has done outreach to active members, and found that Teamsters are reasonable but have a bottom line of holding firm on no givebacks on the contract.

"Every ABF Teamster I talk to says the company doesn't need any help from us when it comes to money," commented Larry Capesius, a utility driver for ABF in Cedar Rapids, Iowa.

"We do our jobs and ABF is making a profit," he continued. "We voted down givebacks once and we'll do it again if there's any attack on our wages, benefits or pension contributions."

Also, Teamsters have seen that ABF has the money to pay bonuses and salary hikes to top execs, and to buy Panther in 2012.

The IBT negotiating team needs to stand firm and keep ABF Teamsters and their brothers and sisters at YRC, Holland and New Penn informed and involved at every step of the negotiating process.

Members will act to defend the freight contract but they need a leadership that has the confidence to lead if we are to win a fair contract.

November 12, 2012: When Veteran's Day fell on Sunday this year, freight Teamsters in New England thought it would mean Monday is the observed holiday, just as for the federal government and other institutions which recognize the day.

Then came a strange memo from the New England Supplemental Negotiating Committee signed by the employers' chairman and union chairman John A. Murphy, Boston Local 25 business agent.  November 11 (Sunday) was the holiday for non-vets, and November 12 (Monday) was the holiday for veterans!

Any Teamster out there ever heard of anything like this?

The justification was to give veterans a bonus, since most Teamsters would be working Monday and they would get time-and-a-half for the day. Of course, that could have been done for all Teamsters.

What veterans need more than this is preference for hiring in freight and trucking jobs. There is a jobs crisis for returning vets. ABF and YRC could set a good example by taking qualified vets and letting them train up to get their CDLs. That would be a lot better than setting a strange precedent allowing employers to sow division in the workforce by splitting workers' holidays up.

Along with hell freezing over, the national debt being retired, and a write-in candidate winning today, add this to the list of improbable scenarios: David G. Ross may be changing his tune on YRC Worldwide Inc.

Ross, a Baltimore-based analyst who covers the trucking industry for investment firm Stifel, Nicolaus & Co., has been one of Wall Street's biggest bears on the Overland Park, Kan.-based less-than-truckload (LTL) carrier. And given YRC's myriad of difficulties over the past five or so years, Ross' extreme bearishness has been justified.

However, YRC on Friday reported its best quarterly results in several years. For the first time since 2008—excluding the second quarter of 2010 when it benefited from an $83 million noncash reduction in equity-based compensation expense—YRC reported positive operating income for both its YRC Regional subsidiary and its long-troubled YRC Freight long-haul unit, which is the amalgamation of the old Yellow Freight and Roadway Express.

YRC Regional, which is made up of regional carriers New Penn, Holland, and Reddaway, posted a 3-percent year-over-year gain in operating revenues. Yields rose as the unit posted a 2.9-percent increase in revenue per hundredweight and a 3.6-percent increase in revenue per shipment. Tonnage rose slightly while daily shipment volume fell slightly.

At YRC Freight, revenue per hundredweight rose 3.4 percent and revenue per shipment increased 3.2 percent from the 2011 quarter. Ross said in a research note that this is a sign the unit may be finally "getting tough" with large national accounts by shedding some of the traffic that the carrier has been losing money on for years.

YRC executives acknowledge that the unit has been top-heavy with big customers who tender large blocs of freight that the carrier hauls at either a loss or at very thin margins. Analysts have long worried that these customers have YRC Freight over a barrel because the carrier would effectively be history if their freight went elsewhere.

Ross said that "YRC Freight is finally making some progress" under YRC CEO James Welch, who took over in 2011, and Jeff Rogers, who ran the very successful Holland regional unit before being named to turn around YRC Freight. However, lest anyone think Ross is turning bullish, he cautioned that YRC Freight has "much farther to go if the segment is to be economically sustainable."

By contrast, Ross wrote that YRC Regional has attained "rock-star" status by turning in an operating ratio of 93 in the third quarter. Operating ratio is the ratio of expenses to revenues and is considered a key metric of a transportation company's operating efficiency. At a ratio of 93, YRC Regional spends 93 cents for every revenue dollar it takes in. That is the second-best LTL operating ratio behind Old Dominion Freight Line, considered the top company in the field.

Major Challenges Still Exist

Overall, however, YRC faces major challenges that could more than offset the success at YRC Regional or the nascent turnaround at YRC Freight. Ross wrote that YRC must spend large sums to modernize its aging fleet and must eventually deal with a looming $5 billion pension liability. In the note, the analyst said, "We do not know where the money will come from to pay for new equipment and pay its retirees."

Under terms of an agreement with the Teamsters Union, YRC is currently required to pay only one-fourth of its normal pension obligations into the plan. YRC's existing contract with the union doesn't expire until 2015.

As of the end of the third quarter, YRC had liquidity—defined as cash, cash equivalents, and availability of funds under a $400 million asset-based loan facility—of $237.6 million. That is down $11 million from second-quarter totals, the company said.

Jamie Pierson, YRC's CFO, said in a statement that the small decline in liquidity is a testament to the company's "effective working capital management."

According to Ross, the ideal scenario is for YRC to sell the regional unit or spin it off—free from any pension liabilities—to shareholders. Then it should shut down YRC Freight, sell off its assets, and use the proceeds to provide some sort of pension to workers who "are highly unlikely, in our view, to realize what they were promised."

YRC Worldwide Inc. reported third-quarter profitability gains, despite revenue rolling downhill slightly.

The Overland Park-based trucking company (Nasdaq: YRCW) reported $1.24 billion in revenue for the three months that ended Sept. 30. That’s down 3.1 percent from the same quarter last year.

But comprehensive net income attributable to YRC Worldwide was $6.7 million, compared with a loss of $186.8 million a year prior. Still, the company reported a diluted loss per share of $4.30, though that was a marked improvement from the $153.74-a-share loss of a year prior.

The company pointed to its $27.3 million in operating income as a key sign of improvement — this is the second straight quarter in which YRC has recorded income from operations. A year prior, it had a third-quarter operating loss of $26.1 million.

The latest quarter included a $2.3 million gain from selling assets, but the prior-year quarter had gained $10.8 million from asset disposals.

YRC shares jumped in early Friday trading, around 9 a.m. trading up 3 percent at $7.80 a share. (See a current share price from Yahoo Finance.)

“Despite the current economic headwinds, we were able to increase profitability through a combination of pricing discipline, customer mix management and an unrelenting focus in the areas of safety, costs and operational fundamentals,” YRC CEO James Welch said in a release. “For the first time in four years, excluding second quarter of 2010, which included an $83 million non-cash reduction in equity-based compensation expense, we are reporting positive operating income in each of our subsidiaries. I am encouraged with the steady progress we’ve made throughout the year and remain committed to the execution of our strategy.”

Results continue to come out slightly ahead of expectations, he said.

The trucking giant has been orchestrating a turnaround after nearly having to file bankruptcy during the recession. Welch has been in the YRC driver’s seat since mid-2011.

See YRC’s full third-quarter financial report.

A three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia has agreed to hear oral arguments in December from a pair of federal lawsuits challenging the U.S.-Mexico cross-border pilot trucking program.

The two lawsuits filed last year, one by the Owner-Operator Independent Drivers Association and the other by the Teamsters union, allege that the program allowing Mexican carriers into the United States does not comply with U.S. federal safety laws and regulations.

So far, the program has not met expectations, with only seven Mexican-domiciled carriers being granted operating authority to participate in the Federal Motor Carrier Safety Administration’s program.