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NewsTrucking

Three YRC units could disappear if labor contract is rejected, Teamster executive warns

Will they be running on empty? (Photo:Shutterstock)

Less-than-truckload (LTL) carrier YRC Worldwide’s (NASDAQ:YRCW) long-haul unit and its two key regional units could go out of business by the end of May should unionized workers vote down a tentative five-year collective-bargaining agreement early next month, the head of the Teamsters union’s freight division has warned.

Ernie Soehl told the rank-and-file on a nationwide conference call on the evening of April 10 that customers will pull their freight from the three units should members vote down the contract on May 3, the date when the results are to be announced. If customers react in such a manner, long-haul carrier YRC Freight and regional carriers Holland and New Penn Motor Express will likely not last until May 31, the date a two-month extension to the existing agreement is set to expire, Soehl said.

YRC’s shippers are closely monitoring the status of the contract talks, Soehl said. Should the tentative agreement be rejected, “it is my personal opinion, and the opinion of the (negotiating) committee, that we will not make it to May 31,” he said. Shippers threatened to pull business in the days leading up to the tentative agreement at the end of March, and some accounts have already defected, Soehl added. The extension was designed to keep the business stable while the rank-and-file reviews the proposal and votes on it.

Soehl’s blunt assessment means that for the third time in less than a decade, YRC’s unionized workers will vote on an agreement as if the company’s fate depended on it. In 2010, faced with the strong prospects of YRC going out of business, the rank-and-file ratified a contract calling for punishing pension cuts and 15 percent wage reductions. Then in 2014, the members approved a memorandum of understanding (MOU) which effectively extended the terms of the 2010 agreement, although it did call for wage increases, albeit off the reduced base. The members rejected management’s first proposal, leading the company to warn that there “was no plan B” and that liquidation could be the result of a “no” vote. YRC’s lenders had conditioned future financing latitude strictly on a successful extension of the 2010 compact.

Now the threat of a contract rejection leading to the company’s dissolution comes from the union’s leadership. A rejection would be tantamount to the members authorizing a strike against YRC, Soehl said. But a strike would likely never come to pass because there would be no business left by the time a walkout took place, he added.

Neither YRC nor a spokesman for the union’s freight division responded to requests for comment.

About 24,000 Teamsters are employed at YRC, according to company estimates. (other estimates put it as high as 30,000 members. That includes members in a fourth unit, Reddaway, which is governed under a separate labor contract. YRC is one of the last – and the largest – truckers that were part of the once-mighty Teamsters’ freight division. At its peak prior to deregulation in the late 1970s, the division boasted more than 500,000 members. Since truck deregulation occurred in 1980, mergers, bankruptcies and the advent of non-union carriers have decimated the union contracts. The division has around 50,000 members today.

The contract proposal, which has received near-unanimous backing from local leaders, calls for a $4 per hour wage increase for most workers, spread out over five years, with a $1 per hour increase that would be effective immediately. The contract would be retroactive to April 1, 2019. That translates to an 18 percent increase for most workers over the contract’s life. The contract eliminates the current MOU, and no longer pegs wage increases to the lower thresholds. “A dollar is a dollar, not 85 cents,” Soehl said on the call.

YRC agreed to increase its annual contributions to the members’ health and welfare fund. The current pension levels would remain the same; the 2010 agreement froze pension contributions for a couple of years and resumed them at about 25 percent of prior levels.

The proposal restores one week’s paid vacation for workers that had earned four weeks vacation or more. That concession was made in 2010 and extended in the MOU. All unionized workers will get the additional one week’s pay, which will add 14,000 hours of pay per year, Soehl said.

The agreement establishes a class of non-Commercial Driver License driver who would handle local cartage rather than having YRC contract out the work to a non-union vendor. It also protects the higher wage for a CDL driver performing non-CDL driver functions. The pact prohibits the use of autonomous vehicles or drones for transporting freight. It allows, for the first time, the Holland regional unit to use purchased transportation, but caps the utilization to 8 percent of Holland total annual miles driven. It also empowers union negotiators to unilaterally curb or eliminate the purchased transportation programs at Holland and YRC Freight, where it has been in effect, on a limited scale, for five years.

Soehl said the union has extracted all the financial juice it could squeeze out of Overland Park, Kansas-based YRC. The company, Soehl said, doesn’t have another penny to spend beyond what it has agreed to in the five-year pact.

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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.

48 Comments

  1. No one is making you stay here ABF is taking all drivers they can find. If you stay your choice, but remember they get what they pay for, no one is running for them anymore. NO BODY CARES NO BODY CARES

  2. I understand people are unhappy with the company’s proposal. I came into YRC,not yellow or roadway. 15% less than scale…Am I happy about that,NO!! Could the company pay more, I think so. Are we the lowest paid ,yea probably. But , everybody else is paying for their insurance and its crap!! Would you rather make more money and pay for insurance or take a little less and your ins. be taken care of? As far as the pension, it ain’t looking good for anybody.

  3. Worked at CF for 13 years everyday we heard business is bad. When it finally closed it was like a big weight lifted off of me. Worked Holland for 12 years great company until YRC executives destroyed it. To my fellow employees CDL drivers are in high demand and you won’t have to look for work very long. Everybody wants to work for a winner,a place that has decent equipment, fair pay, and respect. YRC has none of that. Believe me when I tell you that a new beginning awaits you. Its time to put the old dog (YRC)down. The union only wants your dues money and have already sold you down the river with the last 10 year contract. Hold your head up high vote no and start a new chapter in your life. Don’t look back you will not believe how empowered you will feel.

  4. worked 10years for roadway/5years for cf .iam so glad that they folded.i found a better job and never looked back.scared money never wins.just leave.

  5. Tough situation u guys r in. Do u cut my throat w/ closing up shop? Or do u cut my arm off slowly and painfully w/ threats of closing up shop? U know James P will be cutting steak tonight…and tomorrow night. No concessions at his home. I feel for fellow Teamsters at YRC. We felt it back in August 2018. The sell job forced down our throats. Tricky. Stay strong . Industry is strong right now. Maybe some language could be agreed upon for pay us while things going good now. And reevaluate when things take a turn for the worst. Why not? I get it…company will always say things r bad. Earnings r public record.

  6. I have been with Roadway and with YRC for the last 20+ years. We have heard this before. It took them days before they came out with plan B when we voted it down last time. At what point are you yes voters going to say enough is enough. If you don’t think the company doesn’t have money, look at the earnings, the top executives pay, the company shares they give to each other and for how much they sale it through out the year, the bonuses and …. should I keep going? You would have to ignore it purposely to not see they can pay us more if they want to or forced to. VOTE NO!! I GUARANTY A PLAN B.

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