Friday, January 24, 2014

YRC Temasters start voting on revised Labor contract this Friday with additional voting sessions on Saturday and Sunday ! What are the stakes here — The financial future of trucking company YRC Worldwide again depends on the outcome of a vote on a revised labor contract with Teamster members,

YRC Worldwide Inc. (YRCW) has the “key ingredient” to refinance $1.4 billion of debt and reduce the risk of bankruptcy after workers voted to accept labor concessions, Chief Executive Officer James Welch said.
The Teamsters union voted 66 percent in favor of extending their contract until 2019, Leigh Strope, a spokeswoman for the labor organization, said after balloting ended yesterday. The proposal maintains cuts of 15 percent in pay and 75 percent in pension contributions, and adds new givebacks including delays in raises and reduced vacation time.
YRC said creditors and investors demanded the lengthening of the current labor accord in exchange for $1.15 billion of lower-interest loans and new shares to pare $300 million of debt. The Overland Park, Kansas-based company can’t make payments due in September without new financing, according to the money-losing trucker, which has said companies in similar straits have declared bankruptcy.
“It’s a reset for the company,” Welch said in a phone interview. “We’ve been working on this strategic process for a year to pay down the debt and to achieve a lower interest payment, and the labor agreement was the key ingredient to make all this work.”
Union members voted 61 percent against a previous concessions package, in a ballot announced Jan. 9. YRC, which operates about 15,000 trucks daily, negotiated a second vote on a reworked accord that Welch called “the best -- and only remaining -- path forward.”

‘Numerous Missteps’

YRC amassed $1.4 billion in debt from acquisitions and what Welch called “numerous missteps” before he took the job in 2011. The company has posted losses of more than $3.1 billion since 2007, including a projected adjusted loss of $102 million for 2013, after bulking up with acquisitions that made it the biggest U.S. trucker by sales.
YRC rose 7.4 percent to $18.79 on Jan. 24. The shares have bounced along with YRC’s quest for givebacks, tumbling 29 percent in the week ended Jan. 10 after the initial vote on concessions and then soaring 38 percent over the next two weeks.
“This was a very difficult vote for our members, but in the end they did what they believe will give this company the best chance to stay in business and protect their jobs,” Jim Hoffa, the Teamsters’ general president, said in a statement.
Of about 26,000 union workers at YRC, 18,581 participated in the vote and 12,267 favored the proposal, the union said. YRC had said the original, rejected labor proposal would have cut costs by $100 million a year. Welch declined to say how much the revised labor agreement will save the company. He also declined to discuss the company’s next steps for refinancing.

Past Deals

“Our goal will be to continue to move forward with our refinancing effort, and we’ll have more to say on that just here in another day or so,” Welch said.
YRC has skirted default twice since 2009 with the help of creditors and worker-backed concessions.
Those deals never produced the promised benefits. Revenue in 2013 probably totaled $4.84 billion, based on the average of five analyst estimates compiled by Bloomberg, or less than half the $9.92 billion peak in 2006.
“Now we will hold management’s feet to the fire to make sure our members’ jobs are protected and redouble our efforts to make sure this company handles its finances responsibly,” Hoffa said.  
In December, the company reached an accord with some investors and creditors to reduce debt by $300 million through issuing $250 million of new shares and converting $50 million of bonds to shares. That agreement was contingent on the labor contract extension. YRC was planning to seek $1.15 billion of loans to refinance the remaining debt.
As of Sept. 30, YRC had about $170 million of cash to face a $69.4 million bond issue that matures on Feb. 15, according to data compiled by Bloomberg. The company has $325.5 million of loans due in September and $556.7 million of loans and bonds maturing in March 2015.

YRC Teamsters to Vote on Revised Labor Contract 
OVERLAND PARKS, KS — The financial future of trucking company YRC Worldwide again depends on the outcome of a vote on a revised labor contract with Teamster members, which will be held this weekend.

“Our members made their voices heard about the company’s initial proposal, and we went back to the company and negotiated significant improvements that will give the members another opportunity to vote on saving this company,” said Tyson Johnson, director of the Teamsters National Freight Division and co-chairman of the Teamsters National Freight Industry Negotiating Committee.

On Jan. 9, a ballot count showed that the original proposal was rejected by over 19,000 Teamster members.

Here’s what’s different in the new proposal:

• Employees on seasonal layoff will be eligible for the lump sum bonus;
• The proposed wage freeze for current non-CDL employees has been eliminated;
• The starting rate for non-CDL new hires has been increased with a $1.00/hr annual increase;
• Employees subject to the attendance policy will have a “fresh start”;
• The company’s initial proposal to take away a week of vacation from employees with three weeks has been eliminated. Additionally, vacation weeks will be paid at 45 hours/week by the end of the agreement;
• The proposal regarding the use of Utility Employees has been eliminated;
• Restrictions on the use of PTS have been specified 
and protections for members at affected terminals have been improved.

If approved, the labor contract will be extended from March 2015 to March 2019.

The approval of the labor agreement might affect to YRC’s future, its employees and their jobs (30,000 jobs are at stake). That’s because YRC needs the contract changes to persuade lenders to refinance more than $1 billion in debt it can’t repay. The first payment, totaling $69.4 million, is due Feb. 15.

And while many YRC employees are in the U.S., YRC is also the parent company of Winnipeg-based YRC Reimer, formerly named Reimer Express.
Teamsters President Jim Hoffa commented: “Since the rejection of the company’s proposal, I met with dozens of YRCW members and I have heard from thousands of others. I came away convinced that we owed it to the members to make one last effort to save the company.”

“No one wants concessions, but with a ‘yes’ vote at least we live to see another day, and I urge you to do that,” Hoffa said.

You may read a side by side comparison of the new and previous Teamster agreement here or read the full current Teamster agreement here. 

Teamsters allow Friday voting on YRC contract offer


The Kansas City Star
Drivers’ work schedules have prompted the Teamsters union to allow some members to vote Friday on a new contract proposal from YRC Worldwide Inc., a union notice said.

So the union is providing for voting Friday, according to the notice posted online by an independent Teamsters group, Teamsters for a Democratic Union. YRC also has “promised to delay dispatches” to allow the Friday voting.
Teamsters Local 41 will hold its Friday vote from 8:30 a.m. to 4:30 p.m., said the local’s president, Vic Terranella.
He said members will be able to watch a DVD from the union describing the revised proposal, and union staff will be available to answer questions.
The Teamsters notice posted online set rules and conditions for handling the sealed early ballots, including opening them only after the Saturday and Sunday voting sessions.
Teamsters who have worked for YRC in the last three years are eligible to vote, the notice said. That includes those currently laid off who have “recall rights,” the notice said. Those members also can vote regardless of whether their dues have been paid, it said.
Teamsters who have worked for YRC in the last three years are eligible to vote, the notice said. That includes those currently laid off who have “recall rights,” the notice said. Those members also can vote regardless of whether their dues have been paid, it said.
YRC and the International Brotherhood of Teamsters last week negotiated revisions to the original company proposal that had been rejected by 61 percent of the employees who voted.
Company and union officials both have said passage of the pact, which extends the current contract and adds new concessions, is critical to the Overland Park-based company’s future.