William B. Cassidy | Sep 29, 2010 7:11PM EDT
The Teamsters union is offering to extend its current contract with YRC Worldwide for two years and accept dramatically reduced pension contributions in return for an unprecedented say in the management of the nation's largest trucking operator.
The union would extend the current suspension of pension contributions, set to expire Dec. 31, until May 31, and then require the company to resume contributing to its multiemployer pensions at 25 percent of the rate in effect in July 2009.
The union proposal also would make significant changes to YRC's work rules and make them uniform across all of its regional and supplemental agreements — a major issue for the company, which deals with several bargaining units.
The agreement would extend the National Master Freight Agreement until 2015. Wage increases already scheduled for 2013 and 2014 would take place, but wage levels would be cut by 15 percent, matching the levels agreed to last year.
The company's board agreed to the plan, which now must be approved by YRC Worldwide's Teamsters employees. A vote by the Teamsters rank-and-file is expected later this month. The concessions are aimed at helping the struggling company avoid potentially crippling pension costs and survive 2011.
In return, the Teamsters National Freight Industry Negotiating Committee would receive effective veto power over the company's plans to recapitalize and over any transactions that may occur in the restructuring of YRC Worldwide.
The Teamsters also would receive a second seat on YRC's board.
Details of the proposed agreement came a day after YRC announced that Bill Zollars would retire as chairman, president and CEO when the carrier's recovery plan is approved. Some Teamsters members in recent weeks had demanded Zollars’ ouster in exchange for new concessions but YRC did not link the two events.
The agreement, which must be approved by rank-and-file Teamsters employees at YRC, Holland, New Penn and Reddaway, was spelled out in in documents filed with the Securities and Exchange Commission on Sept. 29.
The Teamsters union is expected to hold an election at YRC Worldwide in October.
YRC Worldwide also notified the SEC that it plans a 1-25 reverse stock split, effective Oct. 1, to boost its stock back above $1 per share and avoid delisting by the Nasdaq exchange.
The company has a hearing on Oct. 7 on its proposed delisting by the stock exchange, which requires companies maintain a minimum share value of $1.
Contact William B. Cassidy at wcassidy@joc.com
