The Kansas City Star, July 21, 2009, Tuesday

The Kansas City Star

July 21, 2009, Tuesday

The Kansas City Star

YRC workers likely to accept concessions

By RANDOLPH HEASTER

The vote may be close, but YRC Worldwide Inc. drivers and dockworkers probably will accept the concessions they’re being asked to take.

That’s the general assessment of analysts and industry observers following last week’s tentative agreement between YRC and the Teamsters. Union leaders at YRC locations across the country approved the pact, which would reduce workers’ pay by an additional 5 percent while also allowing YRC to suspend monthly pension fund payments for 18 months. The hourly YRC work force accepted a 10 percent pay cut in January.

The latest proposal was mailed July 17 to YRC’s approximately 32,000 active workers for a vote. Ballots also can be cast by about 10,000 furloughed workers. Informational meetings are being offered at union locals, and the Teamsters plan to begin counting ballots Aug. 6.

In a conference call last week, Teamsters general president Jim Hoffa said YRC was in trouble because of the recession as well as the debt the company had taken on. But it would be up to the employees whether to accept more cuts.

“It will involve certain sacrifices that none of us like,” Hoffa said. “On the other hand, we are trying to keep the company alive until the economy comes back and this company starts to thrive again.”

The union initially resisted the additional 5 percent pay cut, said Tyson Johnson, Teamsters freight division director. But after financial analysis, it became evident that wages needed to be cut again as well as the pension payments suspended, he added.

“YRC is in an extreme cash-flow crisis, and cash flow means they need instant money,” Johnson said.

Of the 300 local union officials voting on the pact last week, only two voted against it, according to Johnson.

“Our union locals realize the crisis the company is in,” he said. “Again it was a hard decision, but the alternative is a lot tougher than what we face with this vote. But the vote will be determined by the rank-and-file membership.”

John Schulz, a consultant and longtime observer of the trucking industry, thinks the YRC employees will approve the concessions.

“Why? They don’t have many options,” Schulz wrote last week, noting that YRC’s aging workers don’t have better career options. “Furthermore, the freight recession has worsened to the point where most of these Teamsters realize this is probably their last contract they will need before retirement.”

Others are not as sure as Schulz.

“I think by including the additional 5 percent pay cut, it’s going to create more opposition,” said Ken Paff, executive director of Teamsters for a Democratic Union, a group that generally opposes Hoffa’s leadership.

“It will still probably pass. But there’s a lot of anger out there at Hoffa for backing us into this corner, and there’s a lot of anger at (YRC chairman and CEO Bill) Zollars for his management of the company.”

Les Butterworth is one of those who’s mad at the company and the union. Butterworth, a YRC over-the-road driver in Buffalo, N.Y., said he is voting against the concessions.

“I have to vote my conscience, and my experience has been once the workers take cut after cut, the company eventually is going to close its doors, anyway,” said Butterworth, who was working for Consolidated Freightways in 2002 when it suddenly shut down on Labor Day weekend. “But most of the guys I know say they will vote ‘yes.’ It’s still a good job with an above-average wage and great health and dental benefits. It beats sleeping in your truck every night.”

But the mood of YRC employees like Butterworth should be a warning, said one longtime industry observer. At some point, a majority of them may say enough is enough.

Sometimes, “employers can overplay their hand in thinking that workers are determined to keep their jobs at any cost,” said Clete Daniel, professor of American labor history at Cornell University. “My own guess is that the workers at YRC will, at this juncture, accept the new cuts in order to keep their jobs.

“But the threat the company is wielding fosters anger as well as fear, and who’s to say when the former might outweigh the latter?”

To reach Randolph Heaster, call 816-234-4746 or send e-mail to rheaster@kcstar.com.

Posted on Mon, Jul. 20, 2009 10:15 PM