YRC union workers to get $4-hour wage hike over 5 years

Unionized employees at three of less-than-truckload carrier YRC Worldwide, Inc.’s (NASDAQ:YRCW) operating units will get a $4 per hour pay raise over the next five years – including an immediate $1 per hour increase – annualized hikes in contributions toward their health and welfare benefits, and the return of one week’s paid vacation relinquished in 2010, under the terms of a tentative collective-bargaining agreement between the company and the Teamsters union disclosed late today.

However, the tentative agreement does not call for an increase in YRC’s pension contributions, which were slashed by about 75 percent in 2010 as the company was fighting for survival. Contributions have remained at the same levels ever since. The agreement covers some 20,000 workers employed at YRC’s YRC Freight long-haul unit and at regional carriers Holland and New Penn Motor Express. YRC’s third U.S. unit, Reddaway, is covered by a separate agreement.

In addition, Holland will, for the first time, be able to use purchased transportation services, which will be capped at the equivalent of 8 percent of miles driven. YRC Freight has used purchased transportation on a limited basis for the past five years. The parent company can also establish a rail intermodal service subject to strict restrictions designed to minimize any reduction in bargaining-unit driving. Teamsters officials said that union negotiators have the authority to limit or shut down the use of purchased transportation by either operating company.

Ballots will be mailed to members on April 19, with the votes set to be tallied and the results announced on May 3. The current contract had been extended for two months beyond its original March 31 expiration date. The new compact, if ratified, would be retroactive to April 1.

In a communique released prior to a conference call this evening with the rank-and-file, union leaders said the three operating companies could not afford “one more penny” beyond what they agreed to pay under the agreement. Customers were already threatening to divert freight from the units in the days leading up to the tentative agreement, Teamsters leaders wrote. A two-month contract extension until May 31 was “necessary to keep the customers in place while the ratification process takes place,” leaders wrote.

In the document, Teamsters leaders said that customers would pull their freight if the rank-and-file rejects the agreement. Voting down the contract would constitute a strike authorization under the Teamsters constitution. However, a strike would never occur because customers would have already fled to other carriers, they added.