As it tries to restructure and avoid bankruptcy, YRC Worldwide Inc. has avoided making pension contributions for more than a year now.
That will change come January, union officials assured its YRC work force last week.
Jim Hoffa, Teamsters general president, and Tyson Johnson, the union’s national freight director, made that pledge in a conference call with the trucking company’s union members.
“We’re going to make sure we hold their feet to the fire so they start the payments in some fashion, and that is our goal,” Hoffa said.
In addition to accepting wage cuts of 15 percent, YRC’s drivers and dock workers also agreed to allow the struggling trucking company to suspend pension contributions from July 2009 to December 2010. YRC also deferred pension payments of more than $155 million from earlier in 2009 that would come due next year.
YRC and the Teamsters formed committees to explore the pension issues, and talks began recently.
Another hopeful development on resolving the pension issue occurred when Teresa Ghilarducci joined the YRC board. Ghilarducci, the Teamsters-appointed director, is a labor economist and pension expert.
YRC and the union also are engaged in lobbying Congress to change laws that govern multiemployer pension plans.
YRC chairman and chief executive Bill Zollars has often complained that 40 percent of its contribution to plans such as the Teamsters’ Central States Pension Plan go to fund the benefits of retirees who have never worked for YRC. Employees of failed firms remain in the plan, forcing companies still operating to fund their benefits.
Union officials hinted that YRC probably won’t make the same level of contributions next year that it did before the suspension.
“The main issue is that we bring YRC back into our plans at some contributory rates,” Johnson said. “We don’t know what things will be like toward the end of the year.”
YRC’s re-entering the pension funds at a lower rate would require a rules change at the Central States and most other funds, according to the Teamsters for a Democratic Union, a group that often criticizes the union’s national leadership.
“More fundamentally it raises questions about the future for YRC Teamsters, and sets a possible precedent for other employers eager to downsize or eliminate workers’ pensions,” the group said on its website.
Analysts again are predicting that YRC would shut down if required to make pension contributions, Hoffa said.
“We don’t think so,” he said.