Teamsters union members at YRC Worldwide Inc. voted to a four-year contract extension through 2019, which the carrier called a “key ingredient” toward refinancing $1.4 billion in debt.
The result was announced Jan. 26 after three days of voting in which 66% of employees chose to approve the proposal. The Teamsters said the agreement extending the contract beyond March 15 is aimed at protecting more than 30,000 jobs that would have been at risk if YRC could not renegotiate its debt.
“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,” Teamsters general president Jim Hoffa said in a statement. “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.”
“We took another significant step toward providing our employees the job security they deserve while providing our prospective lenders and equity investors the path they need for the company to achieve a complete recapitalization and achieve a healthy capital structure,” James Welch, YRC’s CEO, said in a statement.
Late in December, YRC said it had reached agreement with some lenders to refinance $300 million of its debt, partly through the issuance of new shares, once the union approved the extension.
The company on Jan. 28 said the union’s certification of the results cleared the way for the $300 million step to proceed.
The first proposal to extend the contract to 2019 was rejected Jan. 9. Union leaders and the carrier subsequently negotiated changes. The deal now includes 40-cent-per-hour wage increases starting in 2016, a $750 lump sum payment and an extension of the wage increases to dock, clerical and maintenance workers.
The lump sum and other changes to the contract take effect once the refinancing is complete, Welch told TT.
It maintains cuts of 15% in pay and 75% in pension contributions that were in the previous contract.