What's Next for YRC

YRC Worldwide won an important victory when a majority of Teamsters at its largest subsidiary voted to accept a second round of wage and benefits cuts. But while 58.5 percent of the Teamsters at national carrier YRC and regional carrier Holland approved the deal, a majority of Teamsters at regional carrier New Penn, who belong to a different bargaining unit, said “no.”

The agreement also was rejected Aug. 7 by a handful of union locals that have separate “white paper” contracts, and Teamsters at other YRC units, including regional LTL Reddaway and truckload carrier Glen Moore, have yet to vote. The Teamsters-YRC agreement provides for an election at those units within 30 days of the Aug. 7 ratification date.

Those votes aren’t likely to derail the agreement, which the Teamsters say will deliver $1.2 billion in total savings over the life of the National Master Freight Agreement, including more than $800 million in savings through the end of 2010.

However, the resistance to the plan at New Penn and some other locations means rolling it out and ensuring that all YRC Worldwide employees share the “equal sacrifice” demanded by the union won’t be as quick and easy as YRC Worldwide and the Teamsters might like.

“As with prior ratification elections,” the Teamsters and YRC will have to negotiate with the locals that rejected the agreement, the company said. The company and union will want to move quickly to address the concerns of those locals and get the agreement, which is retroactive to Aug. 1, in place.

The union traded a 15 percent overall wage cut and 18-month suspension of pension payments for the option to purchase up to 35 percent of the company, a seat on its board and an unprecedented say in YRC Worldwide’s management. The company expects the agreement will save it $45 million a month in the remainder of 2009 and about $50 million a month next year.

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