Less than TruckloadNews

Teamsters get `creative’ to gain tentative contract with YRC; rank-and-file checks their pockets

 It’s time for Labor day (Photo: Shutterstock)
It’s time for Labor day (Photo: Shutterstock)

If ever there was a communique that spoke volumes while saying very little, it was the Teamsters’ union announcement late in the evening of March 21 that its lead freight negotiators had reached a tentative contract agreement with three of less-than-truckload (LTL) carrier’s YRC Worldwide, Inc.’s (NASDAQ:YRCW) units – YRC Freight and regional carriers New Penn and Holland.

Unsurprisingly, the four-paragraph statement was bereft of details – there wasn’t even a mention of the contract’s duration. The current compact, which was set to expire on March 31 but was extended through May 31, was set to run for five years. The tentative agreement goes through a two-step process before the 26,000-member rank-and-file get their hands on it. Union leaders will first brief a cadre of two-person union teams. Those teams, in turn, will brief local officials. Then the rank-and-file will be briefed, and then there will be a ratification vote. Until the teams are briefed, everyone is sworn to secrecy.

Yet Ernie Soehl, head of the Teamsters’ freight division, used phrases in the communique that could be interpreted as thought-provoking. Soehl said that Teamsters negotiators “certainly got creative, but I believe we got every penny we could have and that this contract will improve Teamsters’ lives.”

Members of YRC’s rank-and-file could not be blamed for holding tight to their wallets after reading Soehl’s comments. No one knows how “creative” union negotiators had to be in order to strike a deal. Just a few days before, Soehl had complained about how disappointed he was in YRC’s latest offer. As for getting “every penny we could have,” the language smacks of a union that, try as it might, ran into a stone wall when trying to extract what it felt it was entitled to.

Soehl was dead-on when he said that “there were a lot of issues, history and emotions involved with these negotiations.” Few groups in organized labor have been as battered as have YRC’s Teamsters. In 2009, with their company on the verge of collapse, they agreed to a debt-for-equity swap that diluted their collective equity holdings to near zero, a 75 percent chop in pension benefits, and a 15 percent wage cut. In 2010, the wage cuts which were to expire in 2013 were extended for two years. Then in 2014, with YRC management warning of bankruptcy because its lenders would not restructure $1.14 billion in debt and lower its onerous interest payments unless a contract extension was ratified through March 31, 2019, the rank-and-file grudgingly went along.

YRC got some breathing room in late 2017 when its lenders agreed to extend the maturity date for a $641.7 million term loan to July 26, 2022 from 2019. However, the company still faces massive unfunded pension liabilities, which at the end of 2017 totaled $2 billion. The 2009 agreement pegged YRC workers’ pension benefits at the equivalent of $1.75 an hour, effective in 2011. By contrast, the 2018 contract between the Teamsters and ABF Freight, the LTL unit of ArcBest Corp., (NASDAQ:ARCB) and the yardstick by which YRC’s workers measure their status, provides benefits equal to about $7.83 an hour. YRC would need to raise benefit levels by about $6 an hour per worker to be in compliance with its obligations, according to Ken Paff, national organizer for Teamsters for a Democratic Union, a dissident Teamsters group.

Two analysts, Amit Mehrotra of Deutsche Bank and David G. Ross of Stifel, published notes this morning saying that news of a tentative agreement was a positive for YRC. Yet the devil is in the details, which at this point nobody knows. What is known is that after 10 years of watching a large part of their economic security vanish, the folks who make the YRC system run every day are in no mood for additional concessions or an extension of contract language currently in place. At the same time, YRC operates in a competitive segment, and its pension obligations and additional debt load may constrain it from conceding more than it feels it has to. The two-month extension is designed in part to give the rank-and-file time to cycle through the ratification process. The spring could very well spawn a donnybrook.

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Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.

9 Comments

  1. Trucking unions are dead. No unions, and treat your employees well with good pay and social security like everyone else and you will be competitive and flourish.

    1. By treating your employees good do you mean low pay scale, no benefits, and no retirement??? I don’t know about you but I live in CT. Non union outfits like pace are paying class A drivers $18/hr. Trucking companies are making money hand over fist on the backs of hard working people and not compensating they’re employees. It cost almost 10k to get your license. Drivers are held to higher standards than most blue collar workers with less pay. Teamsters strong. Local 191 Bridgeport CT

  2. NOW THAT IGNORANT IT WASN’T FOR THE TEAMSTERS.. THESE TRUCKING COMPANY’S SURE WOULD TAKE CARE OF THERE EMPLOYEES SO $17 AN HOUR CRAPPY BENIFITS I WEEK VACTION YOUR LUCKY IF YOU HAD SICK PAY FIRED IF YOU DONT HAVE A DOCTORS NOTE BUT I GUESS BUSTING YOUR ASS DRIVING BROKEN UP TRUCKS SPRINGS COMING THROUGH THE HOLES IN THE SEATS CRACKED WINDSHIELDS DOORS THAT DONT CLOSE RIGHT BALD TIRES SOME SHOULDN’T EVEN BE ON THE ROAD BUT YOUR TAKING CARE OF THERE EMPLOYEE’S $17 BIG BUCKS AN HOUR WITH OUT RESPECT OR CARRING ABOUT THERE WORKERS THERES SAFTY …I BUSTED MY ASS GREAT DAYS WORKN FOR GREAT DAYS PAY IM FOURTH GENERATION SAN FRANSISCO TEAMSTER LOCAL #85 AND DAM PROUD TO BE blood sweet and tears for the GOOD LIFE AND HOLD MY HEAD UP WITH PRIDE WE BUSTED ARE ASS BACK KNEES TO HAVE THE GOOD THINGS IN LIFE ……SO YOU COMMENT ON THESE LITTLE COMMENT PAGES IF THATS WHAT MAKES YOU FEEL…. YA IM REPLYING IM RETIERD TEAMSTER IF I DIDN’T SOME ONE WOULD SO BLHA BLHA GET SOME TISSUE …IM OUT OF HERE TEAMSTERS FOR LIFE

  3. I worked at YRC there was the broken busted equipment trucks and tow motor. Too small dock lazy grumpy old men. There behind the times. More concerned with policy than getting the work done. That’s why the company is struggling. I was only there 3 months and knew it wasn’t for me. Insurance was the lonely highlight. Some good people but the game was pass the buck on work down and use seniority to load. Favoritism/seniority hurts overall efficiency

  4. I have worked several jobs that were represented by the Teamster Union crooks. When I worked in the truck freight LTL business everyone in the industry knew the game very well and that was the non union represented companies like SAIA paid like paid an average $5 less an hour for drivers, dock workers and they were owned by Yellow Motor Freight as their secret scab company to make more money. The rumors were rampant 20 years ago that their goal was to basically bankrupt Yellow and break the union for corporate greed. When I was in Management I even heard managers witin the company make statements that they were going to consolidate many freight companys. Then I witnessed Union Pacific buy out Overnite LTL trucking company to move their own freight at cost to include safety supplies, water, parts and on and on to all their railroad shop facilities, depots etc., while still delivering public freight too. This got stressful because UP had deep pockets and vowed from day one to break the teamsters union at any cost. If you were a driver for them and mentioned the union, they would search for a reason to fire you. I decided to change careers and went to work at UPRR and after five years of being represented by BMWE which was kind of a joke because it was widely known that the railroad run and basically controlled all segments of their own union. Then come the Teamsters Union again which represented me and I paid hefty union dues that were mandatory just to work. I just could not seem to get away from these corrupt pigs calling themselves teamster union officials that made salaries of 4X the people they were representing. I have run the gamut through the years in watching many underhanded deals by Teamsters in the freight trucking industry and then railroad industry and it is just false security if you think the Teamsters has your back. They just want to keep slopping at the pigs trough and the way that happens is by keeping as many people working and paying those big union dues to ensure their reps salaries keep rising by doing the least possible in representing.

    The corporate culture of big business pushing max profits at any expense is ruining decent jobs where loyality to the employee or career stability are even a consideration. The evil is very few companies pay decent salaries, benefits or retirement unless they are represented by a union. We have lost so many jobs in all sectors due to giving them away to globalization of cheapest labor-most all those jobs went to China, Mexico, Bangladesh, Philippines and many more so the company can contract labor, no liabilities to make more $$$. I see the next economic recession being sort of a global revolution of awareness highlighting the number of decent jobs and most all manufacturing jobs that no longer exist in USA after 25 years of exporting labor for max profits.

    I was told that YRF was a consolidation industry tactic that was meant to ultimately fail in the big scheme of things and when the dust settled little union precedence would remain in LTL trucking. The same as FedEx did in LTL parcel business using majority contractors and buying non union American Freightways. LTL. When this is all said YRF will fail which gets rid of 3N1 big LTL freight companies breaking strong Teamsters Union dominance.

    They have to know the economy is not going to stay strong for another 10 years so the chance of YRF staying afloat with that kind of massive debt is very slim. Roadway had the right business plan in having older equipment but maintained really well so they paid for new tractors, trailers and infastructure with cash. They were a 100% debt free operation that was making money. USF/Holland was another good company that was ruined by YRF.
    Big sharks are always circling and your life jacket is only good until they attack!

  5. What people don’t understand is that union trucklines have set the pay scale for the non union lines!
    If you take that away, it is no longer competitive.
    Holland was the best truckline that I ever have worked for when I came here over 20 years ago.
    Sure, there were other freight lines then, I was working for one. But, Holland was the CREAM OF THE CROP, and everyone wanted to work there.
    Since YRC purchasing us, the company had gone downhill at a rapid rate of speed.
    The company is believing that all of the workers that are there are intentionally burying the company, but what they don’t want to admit, is that they are the ones that are digging the hole!
    The STEERING WHERL HOLDERS that they are hiring, to try and replace RETIRING FREIGHT MEN, are even close to filling the requirements.
    Management and company heads aren’t having any problem receiving bonuses and flourishing in many other ways!
    It’s time they might need to look at what they might be doing wrong!!!!

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