YRC Worldwide and its mechanics may have dodged a bullet by reaching a tentative contract agreement and avoiding a potentially costly and disruptive lockout.
That’s a relief to shippers, who no longer have to worry about even minor supply chain disruptions caused by a lockout or pickets at 10 to 15 YRC terminals.
YRC Worldwide’s showdown with mechanics represented by the International Association of Machinists and Aerospace Workers came to a head last week. Last Friday, YRC Worldwide CEO James Welch said the $4.9 billion less-than-truckload operator would end a contract extension it granted the IAM on April 15.
“We will actually lock them out,” Welch told The Journal of Commerce, unless the IAM agreed to concessions similar to those accepted by YRC Teamsters employees. “We’re very confident we won’t have any business interruptions,” Welch said.
The CEO made it clear he was dedicated to achieving parity in “shared sacrifice” between YRC’s 25,000 Teamsters employees and the 200 or so IAM mechanics. “We feel we need to get everyone on the same page,” he said in an interview.
Starting in 2009, YRC Teamsters employees took three rounds of concessions, including a 15 percent wage cut and suspension of pension contributions. Reduced pension contributions have resumed, but the wage cut stays in place until 2015.
The IAM mechanics employed at YRC Worldwide took a 10 percent wage cut at the same time as the Teamsters, but balked at further concessions, claiming the company was subcontracting work that should have been performed in-house.
The Teamsters union may support YRC’s position on the need for “shared sacrifice,” but would rank-and-file Teamsters cross a picket line set up by locked-out IAM mechanics? That was a troubling question for all involved over the weekend.
The two unions have competed to represent workers at YRC terminals, and YRC Teamsters accepted deeper cuts than IAM mechanics. However, there certainly are Teamsters who would at the very least be reluctant to cross another union’s picket line, even if they disagreed with those workers.
Disruptions in the flow of freight at the few YRC Freight and Holland terminals that employ IAM mechanics — about 10 to 15, according to various sources — could have caused unforeseen service issues throughout the carriers’ networks, delaying deliveries for customers and adding costs for YRC Freight, which is still struggling to return to profitability after years of losses.
On Monday, YRC Worldwide extended its lockout deadline, and a tentative agreement that includes “shared sacrifice provisions that will bring IAM members in alignment with fellow YRC Worldwide employees” was reached Wednesday. The IAM mechanics will continue to work pending a vote on the contract proposal.
Now, YRC can turn its attention back to the Teamsters and an April 19 meeting on a proposed network redesign that would close 29 terminals and three distribution centers.