Union representing trucking company workers to get stock ownership, workers to see pay cuts

Workers at one of Inland Southern California's busiest trucking operations overwhelmingly accepted a deal that cuts their pay but gives their union an ownership stake in the company.

About 1,800 Teamsters from Rialto-based Local 63 are among about 44,000 nationally who voted to amend their contract with YRC Worldwide Inc., the parent company of Yellow Transportation, Roadway Express, Holland and other trucking operations. The vote reduces their pay by 10 percent, the union and company said in statements Thursday.

In exchange, the Teamsters will receive a 15 percent stake in publicly traded YRCW. The company will also suspend cost-of-living raises for the life of the contract, which expires in 2013.

Teamsters nationally accepted the deal by a margin of about 4-to-1, and the vote carried by more than an 8-to-1 margin in Inland Southern California, said Bob Paffenroth, freight coordinator for Local 63.

Accepting a pay cut means that Teamsters should be protected from layoffs, Paffenroth said.

"It's a fairly good deal because of the stock, and because of the current economy," Paffenroth said. "No one can foresee how the economy is going to go. This gives us job protection."

According to a company statement, nonunion employees will also see pay cuts of at least 10 percent, and they received benefit reductions last year. Nonunion workers were offered options to purchase up to 7 percent of YRCW's stock.

Bill Zollars, the company's president and chief executive officer, praised the employees for their support. In November, Overland Park, Kan.-based YRCW said its fourth-quarter tonnage would be off about 11 percent.

"The amended contract will provide our company with significant annual cost reductions that will also have long-term benefits as the economy recovers," Zollars said in a statement.

The Teamsters' stock grants will be placed in trust, but eventually the workers who have to live with the pay cuts will own shares, Paffenroth said. YRCW's stock closed at $4.68 a share on the Nasdaq stock exchange Thursday, up 18 cents, but the company had traded at $20 as recently as August.

"If we could get it back to the $25 range we'd be talking about a lot of money," Paffenroth said. "That would essentially offset the pay cuts."