YRC Worldwide Inc., a national less-than-truckload carrier, has won a reprieve of sorts from a pending financial disaster thanks to a tentative agreement reached with the International Brotherhood of Teamsters. Last week, Teamsters employed by YRC rejected a contract extension that would have allowed the LTL carrier to reduce its debt load by $300 million while extending the current contract out to 2019. Since that deal was contingent on the Teamsters agreeing to the contract extension, YRC’s ability to refinance its loan was very much in doubt.
However, round-the-clock negotiations between YRC and the Teamsters resulted in a tentative agreement that still requires a review by union officials, approval of that agreement, and ratification of the revised proposal by YRC’s Teamster members.
“Since the acknowledgement this week from YRC that ‘re-voting the rejected proposal was not an option,’ we proceeded with round-the-clock negotiations to address the concerns of the members and materially revise the rejected proposal while, at the same time, providing a way for the company to pursue its debt reduction and refinancing arrangements,” explains Tyson Johnson, director of the Teamsters National Freight Division and co-chairman of TNFINC. “We recognize that YRC will have to go back to the financial market to obtain financing that will permit it to operate and grow its business, but the market needs to understand that YRC’s front line workers are the lifeblood of the company and, while willing to play a role, will not shoulder the entire burden.”
Since 2009, YRC’s Teamster employees have been operating under a contract that included a 15% wage reduction, which has remained in effect to this day. When asked to continue those wage reductions through 2019, the Teamsters rejected YRC’s contract extension offer by a substantial margin, despite the carrier’s assertion that rejecting that contract would result in “very difficult decisions for the company and its employees.”