Yellow Corp. pointed the finger at the International Brotherhood of Teamsters on Wednesday evening, saying the union is responsible for its “inability to make its monthly contribution to Central States Funds.”
The less-than-truckload carrier made a request to Central States in June to defer upcoming benefits payments as it attempts to come to terms with Teamsters on changes to operations and seek additional funding. However, Central States notified plan participants employed by Yellow companies YRC Freight and Holland on Monday that the carrier was delinquent and benefits would be suspended on Sunday without payment.
Yellow’s (NASDAQ: YELL) news release said the request to defer payment with interest was “not without precedent” and that it was “regrettably” refused an extension “despite the funds’ healthy reserves.”
“Even more regrettably, Teamsters General President Sean O’Brien has blamed Yellow for failing its workers, but it is the Teamsters’ leadership who has failed the 22,000 Teamsters employed by Yellow as well as the 8,000 non-union employees who may soon become the Teamsters’ collateral damage.”
The Teamsters issued a strike notice on Tuesday, saying a work stoppage could occur as soon as Monday if the payment isn’t made.
Yellow contends the “union’s breaches of the collective bargaining agreement” have resulted in the missed payment. It recently filed a $137 million lawsuit against the union alleging Teamsters leadership didn’t have the authority to reject the proposed change of operations and it didn’t schedule a required hearing on the matter.
“In short, Teamsters’ leadership’s obstruction of One Yellow directly caused Yellow’s liquidity crisis and Yellow’s need to implement cash-conservation measures, including its benefit funding deferral request,” Yellow said.
Yellow accuses Teamsters of “freezing the company’s business plan for nine months” as it has made attempts to negotiate its proposed changes, which would consolidate terminals, create additional utility positions to maximize labor efficiency and lower its cost structure to allow it to compete with other carriers.
“For many months, Teamsters’ leadership has steadfastly refused to negotiate the company’s long-planned and necessary modernization effort that would enable Yellow, a 100-year-old company, to streamline and strengthen its operations to compete against non-union carriers,” Yellow said.
Yellow also said that it offered the Teamsters “a significant wage increase that aligns with its union competitors” last week. No further details on the offer were provided by Yellow.
However, the Teamsters referred to the offer as “a back-door deal to rescue [CEO Darren Hawkins] humiliatingly mismanaged freight company,” in a statement Wednesday evening.
“From July 12-13, Hawkins made informal offers to the Teamsters begging the union to return to the bargaining table well before the expiration of the current contract, suggesting the beleaguered freight company could offer workers hourly increases of just over $2 in the first year of a hypothetical new contract,” the statement read. “Shockingly, the communications from Yellow were stipulated on the Teamsters agreeing to a new five-year contract as quickly as possible.”
Previously, Yellow offered to pull forward contractual wage increases and implement an additional pay hike to expedite a deal. However, it acknowledged the increases would have to be approved by lenders when it refinanced its $1.5 billion in debt at a later date.
“It is not left to rank-and-file Teamsters to drag Yellow’s sinking ship to shore,” O’Brien said. “We are not going to agree to informal offers for new wages in the hopes of getting a fair contract next year when YRC Freight and Holland can’t even figure out how to pay their bills right now.”
The union’s statement ended with a reminder of the March 31 expiration date for the collective bargaining agreement.
Yellow said the Teamsters claim it can call a strike due to the missed plan contribution payment due July 15, “would be anything but lawful, as it would violate the parties’ collective bargaining agreement.”
“Commencement of meaningful negotiations with the Teamsters would set the stage for Yellow to reengage in comprehensive refinancing efforts with its lenders while clearing a path to advance One Yellow,” the carrier’s news release said. “All stakeholders — lenders, shareholders, employees and customers — need to see progress.”
Time appears to be running out for Yellow. In addition to facing a potential labor strike the company has been temporarily removed from some third-party freight platforms and shippers have been diverting freight to other carriers.
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Carol Ann MacKay
Your company has a collective bargaining agreement, (“cba”) with you and all of its other union employees. Call it The Master Freight Agreement (“MFA”), Your company has, because of incompetent decision makers, putting the company in an untenable financial position because of loans for not justifiable purchases and loans for those purchases. These are decisions which put the company in a position where liabilities far exceed assets, and put the stock holders stock values or owners in a negative equity position or more simply put, in a bankrupt position. Your company, in its CBA has agreed to provide hourly pay, health and welfare benefits, pension contributions, periodic raises not tied to COLA.
Now, imagine that that this company that is being mismanaged has been put into a state of bankruptcy by the people who made the ruinous decisions, then tells you and all the union employees of the company that the company will close and you will lose your job, unless the company can violate its responsibilities under the CBA or the MFA by not making payments into your pension fund and not giving you agreed upon raises. The company is , in effect, having its union employees bail them out of the financial crisis or a portion of the financial crisis into which their incompetence and mismanagement have cast them! Then, to add to the give aways they demand of the union employees, the company adds a two tiered wage schedule. So, new hired union employees will only make a percentage of what those with longer duration of employment make. Does the company by so doing attract the best and most skilled applicants? Oh. Hell. No. The company ends up with a less skilled work force, a less intelligent work force, higher insurance fees because of increased accidents and cost related to a less qualified work force. Does a less qualified work force attract or maintained good customers, loyal employees, company supporters? Again, oh. Hell. No.
The anti-union forces in this country, will publish misrepresentations, make false statements, tell malicious lies, in order to cast unions erroneously as the most dangerous things to companies to foment anti-union sentiment and hatred among certain factions of society. Example, contrary to some publications erroneous statements, indicating that you or some other union employee has a huge MONTHLY SALARY, are misstatements, errors, or lies intended to present a skewed or false impression to frame an uninformed reader’s or listener’s or viewers’ opinion and ideas on information that is not true. The absolute truth is that your wages are hourly, and based on the CBA OR MFA, state and federal laws, and safety standards, which dictate you cannot exceed X number of hours per week. ERGO your monthly or annual wages, if you have the maximum straight time and time and half overtime and double time, that is your earnings cap, beyond which your hours are illegal. YOU ARE NOT CONSIDERED TO BE A SALARIED EMPLOYEE, those salaried people are not union and are management and other specified positions not covered by a CBA or the MFA. Articles listing dollar amounts of SALARIES for union employees, are in general provided to give you false information to support their position which is generally anti union, and bluntly stated are lies.
General statements that attempt to define the volume of freight and the amount of revenue earned, as based on a single amount to represent the numbers for an entire country financial analysis, again provide a skewed and often incorrect statement purported to be “fact” over the entirety of a company. An example, blanket statements such as: “The company has only half filled trailers of goods.” That is a fallacy is the company has areas, say Washington State or the West Coast, where the company has had to bring in traveling employees, pay their room and board, because the freight loads are too large for the trailers and require employees and equipment to make on time deliveries. Once again, intentional misrepresentation of fact, to support an erroneous statement. Ignorance is NOT bliss! It is just ignorance!
Elkarlo
I am from a Country with strong Unions. The trick on a Union is that it forces the same wages in one Sector of Industrie. The 22.000 Teamsters which are on the line when Yellow goes under, they will get other Truck LTL Jobs.
Teamsters has 1.4 Millions Members, so other companies have to pay decent wages, for another 1.370.000 Truckers and they can survive. When Yellow can’t because their management is bad, why should the workers pay for it.
Maybe there should be a new system out there for Management: Yearly income above 2 Millions gets a taxed of 80%, but companies may give out as bonus Companyshare, which may be sold after 5 Years without Taxes. So a Manager has intrest in healthy growth not shrink down for the Shareholders profit, thats when they pay him the big Bonus. As he only gets his bonus payed out 5 years later.
Workers profit, the economy profits, honest Managers profits, the locust Capitalism suffers.
Doug
Only good thing about Yellow going under is 22,000 teamster jobs go under with them..Brainwashed fools think Cry’n Obrien is on their side as he throws them and their families under the bus. Many of the drivers are pushing 60..where are they going to find a other job ?