YRC Worldwide (YRCW) Teamsters Employees to Vote on Contract Modifications

FREE Breaking News Alerts from StreetInsider.com!

More News related to YRCW

More News related to Corporate News

December 3, 2008 5:02 PM EST

YRC Worldwide (Nasdaq: YRCW) announced that its Yellow Transportation, Roadway, Holland and New Penn business units have asked their union employees represented by the International Brotherhood of Teamsters to modify the company's current labor agreements.

Bill Zollars, Chairman, President and CEO of YRC Worldwide, commented, "During this economic recession, we have already taken a number of steps to improve our financial and competitive position, as we continue aggressive short-term actions to meet the current environment as we plan for our long-term success. We are in the process of working with our union partners to modify the terms of our labor contract in a way that allows us to be more competitive with non-union carriers in the short-term and, at the same time, protect and sustain the financial health of our dedicated employees and our company going forward."

While working on a longer-term solution to this issue, YRC Worldwide is seeking immediate cost savings through proposed changes for the remainder of the contract including:

-- 10% reduction in all wages paid, inclusive of scheduled increases
-- Suspension of Cost of Living Adjustments (COLA)

In exchange, Teamsters employees would receive a 15% ownership stake in YRC Worldwide allowing them to share in future company performance through stock price appreciation. The details of this plan are still being finalized. Contributions to the health, welfare and pension plans would continue as previously negotiated.

The estimated cost savings from these modifications is approximately $220-$250 million annually. The company expects that a ratification vote on the proposed modification will occur prior to the end of the year with an expected effective date of January 1, 2009.