William B. Cassidy | Apr 21, 2010 1:51PM EDT
Teamsters at ABF Freight System will vote on a proposed 15 percent wage cut early next month, after ballots are mailed on or about April 30, the Teamsters union said.
Those ballots are tentatively scheduled to be counted May 21, which means the wage cut could be in place by late May or early June, if the proposal is approved.
The leaders of Teamster local unions threw their support behind the proposal Monday, urging rank-and-file members to support an agreement they say will save jobs.
“If we fail to take action now, we face a situation later where we may be hanging curtains on a house that’s on fire,” Tim Nichols, president of Teamsters Local 878 in Little Rock, Ark., said in the notice. Local 878, in ABF’s hometown, is its fourth largest local.
“We need to act quickly to avoid things getting worse,” Ernie Soehl, president of Teamsters Local 701 in New Jersey, said in an April 20 Teamsters notice to employees.
Ballots will be mailed to about 7,000 ABF employees and another 1,200 who are on layoff, the union said.
A number of transportation analysts suggest the company and the union may have trouble convincing rank-and-file members to vote for the pay cut.
“Many workers cannot afford 15 percent wage cuts, as they spend what they earn already,” said David G. Ross, an analyst at Stifel Nicolaus, in a note to investors.
Other analysts noted the improving freight economy and ABF’s low debt level as reasons to doubt the pact will be approved, or pass easily.
But the union estimates ABF, which lost almost $100 million in 2009 after posting a $49 million profit in 2008, is losing $10 million a month in 2010.
That $10 million a month estimate is based on the findings of an independent financial consultant who reviewed ABF’s business, the Teamsters said.
Contact William B. Cassidy at wcassidy@joc.com.
