Wednesday, June 30, 2010, 5:04pm CDT
Teamsters: YRC Worldwide should restart pension payments in January
Kansas City Business Journal - by David Twiddy Staff Writer
The International Brotherhood of Teamsters says it will continue to pressure YRC Worldwide Inc. to restart employee pension contributions in January — even if those payments are smaller than expected.
In a conference call with members Tuesday evening, Teamsters officials said they were negotiating with YRC to ensure that the Overland Park-based trucking company (Nasdaq: YRCW) meets its current obligation to begin making payments to the retirement benefit plans early next year. That requirement was part of concessions the union members agreed to last year in a bid to save the company.
But the officials also said YRC continues to struggle to attract customers in a very competitive marketplace and could face financial difficulty in financing pension contributions, estimated at $25 million to $30 million a month.
“Whether they return to full contribution or not we won’t know at this time,” said Tyson Johnson, the Teamsters freight director. “The main issue is that we bring YRC back into our plans at some contributory rate. I’d like to tell you today that they’ll be back at the full chip, but that’s why we’re in these meetings today.”
YRC had about 34,000 employees as of March; the Teamsters represent about 70 percent of its employees.
Johnson said the union also is working with YRC to find ways to make the company more competitive. But he denied rumors that it was hammering out new concessions.
“We have not opened the contract for negotiations,” he said. “We are going to look at areas within the confines of work rules that we can give YRC somewhat of an edge in the marketplace.”
Last year, YRC secured two rounds of concessions from its union work force — amounting to 15 percent wage cuts and permission to waive its pension obligations for 18 months — in a bid to provide the company with additional liquidity. Those concessions were key in persuading bondholders to exchange their debt for a majority share of the company, which helped YRC avoid a bankruptcy filing.
Last month, YRC said that although freight levels have continued to rise and it expects adjusted operational income to be positive in the second quarter, it probably will need to delay restarting its pension payments.
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