YRC, Teamsters reach deal for 5 pct. wage cut
NEW YORK — YRC Worldwide Inc. and union workers have reached a deal to cut wages by an additional 5 percent and end pension contributions for 18 months, in an effort to rightsize the finances of the struggling trucker.
In an interview with The Associated Press, YRC President and CEO Bill Zollars called the agreement “a critical piece in the overall recovery plan.” But YRC still has to continue working with its lender group and pension funds to make deals that will save it more cash, as it loses customers at a rapid pace and battles with still-weak demand.
Zollars said those conversations are “ongoing and productive.”
Teamsters for a Democratic Union, the national reform movement within the Teamsters, said that if the deal is approved by members, the additional pay cut will go into effect immediately. The additional pay cut is about $1.16 per hour. The Teamsters already took a 10 percent pay cut in January to help boost the trucking company’s ailing finances.
YRC said the deal, if approved, will save it $45 million per month. That will grow to $50 million a month in 2010. In exchange for the pay cut, union employees will receive options for a 20 percent stake in the company, pending approval of shareholders. That’s up from a 15 percent stake they were offered with the previous pay cut.
Along with Teamster concessions, Overland Park, Kan.-based YRC Worldwide has cut thousands of employees, sold real estate and re-negotiated terms of its debt to stay afloat. The company has about 35,000 union members.
“This is another step in our ongoing strategic plan to restore the financial strength of our company,” Zollars said in a statement. “Modifications to the labor agreement will help us reduce our cost structure, preserve operating capital and increase our competitiveness.”
TDU spokesman Ken Paff said he expects the deal to go out to union members “very quickly,” possibly as early as Friday. He said that Teamsters want the ballots back by Aug. 6.
A spokesman for the International Brotherhood of Teamsters declined to comment further than the basic details of the deal.
A union driver for the company, who asked to remain anonymous because of the sensitivity of talks, expressed doubt on whether the move will be able to save the trucker from filing for bankruptcy.
“I think they’re putting a Band-Aid on a third-degree burn,” the person said.
Shares of YRC gained 4.3 percent in aftermarket electronic trading to reach $1.70. The stock ended Tuesday’s regular session up 20 cents, or 14 percent, at $1.63.
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