Teamster Negotiations Ongoing at YRCW and UPS

Aug. 19, 2009
YRC Worldwide is continuing negotiations with Teamsters to complete contract modifications; meanwhile, UPS aircraft mechanics called for a strike vote

A strike vote called for by Teamsters Local 2727, representing UPS aircraft mechanics isn't likely to result in a work stoppage. That's the view of industry observers who reacted to the bargaining unit's call for a strike vote to be completed by September 14, 2009. The Louisville, KY local has been negotiating with UPS since November 2006.

Under rules set forth in the National Railway Labor Act, which governs the aircraft mechanics, a positive vote by union members would trigger a 30-day cooling-off period. If no agreement is reached when the two sides resume bargaining, the mechanics could strike. The shortest timeline from completion of a vote on September 14th would place the possible job action in mid October, right at the beginning of the parcel carrier's peak season.

A strike vote is a common tactic to restart or energize negotiations and doesn't necessarily indicate an intent by the union members to stage a work stoppage. Market analysts at Stifel Nicolaus reiterated their “hold” rating for UPS stock saying a strike could have a material impact on UPS financials, but the decision was based more on the likelihood of a slow rather than a sharp recovery and not on the potential financial impact of a new labor contract with mechanics.

In other Teamster contract news, YRC Worldwide had reported that most of its unionized workforce had approved contract changes in a just-completed vote. However, roughly 10% of union workers covered by separate “white paper” agreements did not approve the changes. This led a local newspaper serving the region where YRC's New Penn Motor Express is headquartered to speculate about the regional carrier's future.

The report cited unnamed sources suggesting the unit could be closed or merged into YRC's regional unit. YRC told Logistics Today:

“As previously announced, a small number of the bargaining units representing less than 10% of the company’s Teamsters employees did not yet ratify the labor agreement modifications. The company and the Teamsters are addressing employee concerns for these smaller bargaining units to reconsider the modifications. The company has not filed any change of operations affecting the network status of New Penn. New Penn continues to provide superior regional, next-day transportation services to its customers.”

The International Brotherhood of Teamsters (IBT) had also responded to the issue following the ratification vote, as Logistics Today reported:

“A small group of IBT members (10% of members voting) did not ratify the agreement. They are subject to a 'handful of separate white paper agreements,' said the IBT. 'As with past contract ratification rejections, those issues will be dealt with on a local-by-local basis,' said the IBT.”

Ballots were mailed to New Penn Teamsters members on August 19th with a deadline to return them by September 9th. In a letter to members, the IBT said, “After the [earlier] ballots were counted, YRC Worldwide Inc. called for an emergency meeting with the Teamsters National Freight Industry Negotiating Committee (TNFINC), which took place August 11. During the August 11 meeting, the company indicated that it plans to call for a Change of Operations in the near future to merge New Penn into YRCW.” Tyson Johnson, co-chairman of the TNFINC, added in the letter that because a merger of New Penn operations into YRCW could cost hundreds of union jobs, most of the locals asked to vote again on the contract changes.

What's your take? Join the discussion by clicking here: YRC's Future. . .your take?

Additional coverage:

Ratification Vote Survives YRC Gaffs

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