YRC Worldwide Inc., looking for ways to reduce costs, said Thursday that it will seek federal help to eliminate its obligation to non-YRC union retirees.YRC has had some preliminary contact with officials from President-elect Barack Obama’s administration on the issue of multi-employer pension plans, said Bill Zollars, YRC’s chairman, president and chief executive. YRC would like to stop supporting retirees from companies no longer in business.
“It’s really the treatment for the orphans that we’re concerned about,” said Zollars, referring to retirees of trucking companies that have shut down. “We’d like to see the government take on some role in supporting them and leave us to fund our own retirees’ pensions.”
Zollars’ comments came a day after Teamsters leaders gave tentative approval to a 10 percent wage cut that could go into effect in January. About 40,000 YRC union workers are eligible to vote on the proposal — which essentially swaps pay cuts for a potential equity stake in the company — by the end of the month.
YRC also has agreed to cut the wages and benefits of all non-union employees as part of the deal with the Teamsters.
Zollars said the company has discussed the pension matter with the Teamsters. YRC is the biggest employer left contributing to the union’s Central States Pension Fund, a multi-employer plan, with about 30 percent of the liability. United Parcel Service Inc. paid $6 billion to leave the fund last year under a new contract.
“The Teamsters and the company are together on this issue,” Zollars said Thursday. “There’s a reasonable chance we can get something done on this with the new administration. We’d love to be able to get it done in the first year.”
A Teamsters spokesman, without specifically addressing YRC’s proposal, said the union supports pension reform.
“Our union believes that anyone that has earned their pension benefits through years of hard work should not suffer impairment of those benefits simply because the employer for which they once worked is now out of business,” said union spokesman Galen Munroe. “We also believe it’s long past time to address the need for serious pension reform to ensure that pension funds will continue to have the resources to fulfill the promises made to their participants and that all working men and women will have a secure retirement.”
Analysts have estimated YRC’s unfunded liability in the Central States fund to be in the range of $4 billion, but Zollars said Thursday that he has not been provided with an updated figure from the fund.
“I’m sure it’s gone up significantly in recent months given what’s happened to the economy,” he said.
Meanwhile, YRC continues to restructure in an attempt to get through the prolonged economic downturn. Zollars estimated the cost savings from the wage cut of the union drivers and dockworkers to be $220 million to $250 million in 2009. An additional $200 million in cost savings should come next year from the merger of YRC’s two biggest carriers, Yellow Transportation and Roadway.
The savings from the 10 percent cutback of wages and benefits of non-union employees will be significant, Zollars said. He added the company may provide a more specific figure later this month.
YRC continues to work on the sale of properties no longer needed due to the merger of Yellow-Roadway and the sale-leaseback of other facilities.
2 comments:
I am not a very educaetd person so would someone correct me or enlighten me as to my understanding of the Teamster pension fund.I have been under the impression that the monies contributed to the fund was money that I earn as part of my negotiated pay package and is placed into the fund by the company on my behalf wich is being used to provide current retired teamsters who made the same contributions to the fund while they were working.
Mr.Zollars states that YRC is paying pention benifits for people who are retired and their companies went broke,now I could be wrong here, but if those contributions are part of a mans pay package that a man earns and has the company put it in a fund for him then who is YRC or UPS or any other employer to make a claim that that is their money? As far as I am concerned It is My money and my retired brothers money ,not the companys nor the teamsters but ours.We earned that money ,it's the same as direct deposit with our paycheck we have that directed to our bank and the pension fund to me is no different.
As of April of 2008 we are already seeing some of this cutting of pensions benefits of retirees. Under the new rules if the company you retired from did not pay it's unfunded liability Central States has the right to reduce your benefits received for the number of years you worked for that company.This reduction can go back to January 1st 2004 and include any time you have earned since that date. This info is in the Spring 2008 TeamWork magazine and can still be viewed on the Central States web site. As for the thinking that it is "your" money when it come to the pension benefits paid on your behalf think again, it is part of your wage package but our fund works just as Social Security does it depends on the current people paying and interest drawn on the fund reserves to pay the bill. If there are no future members paying into the plan you have no guarantee of any thing there. None of the money paid to Central States goes into a "personal account" just for you it goes to the pot to pay the bill.
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