Teamsters who work at the freight companies of YRC Worldwide -- Yellow Transportation, Roadway, Holland and New Penn trucking companies - have voted overwhelmingly to accept through March 2013 lower wages and a suspension of their COLA, reports Traffic World magazine.
Union employees approved a plan that promises to protect jobs and retirement security as well as cut costs to help the company through difficult economic times. They ratified the change by a 77 percent to 23 percent margin, with more than 75 percent of members casting ballots.
The agreement took effect when all the ballots were counted Jan. 8 for the remaining life of the contract through March 31, 2013. It includes a 10 percent reduction in gross wages and mileage rates, plus suspension of a cost-of-living adjustment. The wage reductions apply to all union and non-union workers, including management. There is no change to any health, welfare and pension contributions.
In return for the wage cuts, union employees will receive a 15 percent ownership stake in YRC Worldwide, allowing them to share in future company performance. Non-union employees will also receive options to purchase up to a seven percent ownership stake in the company. Senior executives will reduce total compensation, but will not be eligible to participate in the stock option program.
"While we never want to see wage reductions, this vote shows that our members understand that we are facing the worst economy since the 1930s and that the company needs some help to get through this difficult period," said Tyson Johnson, director of the Teamsters national freight division. "We are hopeful that this agreement will protect the livelihoods of our members and their families by protecting the jobs and health, welfare and pension benefits of our freight members."
The company expects to save $220 million to $250 million annually in union wages. YRC will save another $75 million to $85 million in 2009 from the non-union compensation reductions that were effective Jan. 1. The integration of Yellow and Roadway, due to be completed in early spring, will add another $200 million to operating income.
"During a time of economic hardship, we are proud of the understanding and support of our employees. The amended contract will provide our company with significant annual cost reductions that will also have long-term benefits as the economy recovers," said William D. Zollars, chairman, president and chief executive officer of YRCW.
(The preceding article was published by Traffic World magazine.)
