Friday, December 12, 2008


The first democratically elected leader of the Teamsters died yesterday at age 72 in New York City.

Ron Carey was first elected to head the Teamsters in 1991 on a vow to end mob control. In his re-election bid in 1996, he narrowly defeated James Hoffa, Jr. However, in 1998, a court-appointed review board expelled Carey from the Teamsters, concluding, according to the New York Times, he “breached his fiduciary duty by failing to stop an illegal scheme that siphoned more than $750,000 in union money into his 1996 re-election campaign.”

In 2001, Carey was charged with perjury related to the scandal. He was later acquitted on all charges.

He is survived by his wife, Barbara, and five children.

Hoffa: Senate should reject death sentence for GM

What's ailing the auto industry in the United States is the same as what's ailing the industry in China, Japan, Europe and South America.

Carmakers around the world are struggling through the worst slump in 40 years. Sales of cars by Toyota and Honda fell more during the last year than did sales of cars by Ford.

For America's Big Three automakers, the bad news turned catastrophic last month. In November, 236,000 North American-made cars were sold. That is a shocking 40 percent drop from the number of cars sold in November 2007. No industry can afford a 40 percent sales decline.

Sure, mistakes were made. But the Big Three's dire straits are a result of frozen credit markets and a global recession.

Fortunately, many in Congress recognize that it's crucial to rescue the U.S. auto industry. The House has approved a bill negotiated with the White House that would use existing money for a short-term loan and restructuring of the troubled carmakers.

There are 1.59 million people employed by the Big Three, their parts suppliers and dealerships. As many as 5 million people depend on the auto industry for work, including Teamsters who haul cars, parts and supplies. Letting the domestic auto industry collapse would dramatically worsen a recession that's already a year old.

It would be disastrous to allow even one of the Big Three to seek bankruptcy protection. That would cause the failure of hundreds of auto parts companies and dealerships. The remaining Big Two automakers, dependent on the parts and dealer networks, would go under. Securitized auto loans and their insurers would fail, whipsawing fragile credit markets.

Another consideration: General Motors couldn't get financing for a Chapter 11 bankruptcy. So do the math. Bankruptcy for one automaker means GM closes its doors. For good.

There are some free-market wing nuts who are fine with that. We've all heard their arguments: "Since the automakers brought their problems on themselves, let them fail." Or, "Don't interfere with the free market."

But they ignore a lesson of the last century: America's peace and prosperity depend on a robust manufacturing base.

We would have lost World War II if we didn't have an auto industry that could produce weapons during the war. That's why Franklin Roosevelt called Detroit the "Arsenal of Democracy."

We would not have enjoyed record prosperity during the post-World War II era without a strong manufacturing base -- and productivity gains that were shared with workers.

In recent decades, we've taken our eye off the ball. Instead of shoring up our manufacturing base, we've favored the interests of Wall Street over other sectors of the economy. Nowhere is that more evident than in the ongoing, multitrillion-dollar bailout of irresponsible financial services companies. (By the way, I don't hear anyone complaining that the unions brought down Lehman Brothers.)

Now, Wall Street's follies are hurting the auto industry.

For those who would pull the plug on our domestic automakers, I ask them to consider that our economic competitors won't let their auto industries vanish.

The European Commission is offering $6.3 billion in industry loans for developing greener cars. The Swedish government said it's prepared to help out its automakers. Japan already subsidizes its auto industry by keeping the yen artificially low.

China's automakers, which are owned or controlled by the government, get research grants and loans from state-owned banks. They're asking the government for emergency help in the form of tax relief, lower gas prices and grants.

I hope Congress will take to heart Franklin Roosevelt's words: "The strength of this nation shall not be diluted by the failure of the government to protect the economic well-being of its citizens."

Plano mayor will not repeat

For the past seven years, Mayor Bill Roberts has found a way to balance his 14-hour work schedule as a truck driver with his duties as mayor.

But that has changed, and Roberts said this week that he will not, in fact, seek a third term for Plano's top office.

Roberts said his work schedule has changed at his company, USF Holland.

The mayor was assigned two weeks ago to begin work at 5 a.m. and end in the early evening. Instead of his regular 1:30 a.m. start, which allowed him to tend to city business, his new work schedule erases nearly any time for meetings, he said.

"I (now) have to scramble a little bit here with my sick, personal and vacation days to make my term work out. Every term for the last 7-1/2 years, there's been a chance of this happening," Roberts said.

Roberts had announced in late October that he planned to run for re-election.

But this week, he noted that USF Holland is trying to adjust to the new economic climate by implementing "a different philosophy," which came in the form of shift changes.

Economic growth

During his time as mayor, Roberts has previously said he is proud of the annexation and zoning of commercial property that has allowed retailers to come to town.
Also during his tenure, Waubonsee Community College announced a Plano campus, opening in 2010, and several properties downtown and along Route 34 have been acquired by the city.

"We laid a great foundation. With the challenging economy, we've done the right things. We've been frugal and careful," Roberts said.

Election in April

As far as the April election, at least one candidate, 4th Ward Alderman Bob Hausler, has publicly announced a run for mayor.

Roberts said he plans to express his support for a potential mayoral candidate, but would not disclose who just yet.

"There have been a lot of people who are disappointed (in the news) but it's beyond my control," said Roberts, who will serve a total of eight years as mayor when his term ends.

"I've gotten some very nice supportive phone calls," he added.

Thursday, December 11, 2008

Obama: Transportation can get economy moving

When President-elect Barack Obama says he wants to get the economy moving again, he means it quite literally.

Transportation will play a central role in Obama's first months in office, not just for policy changes aimed at improving highway, air and rail travel, but as a road toward economic recovery, energy independence and environmental protection.

Solve road congestion, Obama's reasoning goes, and you put people to work.

Use less gasoline and help clean the air.

Build better trains and move goods more efficiently.

Get people out of their cars and reduce greenhouse gas emissions.

"We will create millions of jobs," he said recently, "by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s."

This expansive approach contrasts with the Bush administration's policy that transportation - like other government functions - works best when it is in private hands, or at least in a public-private partnership.

Adopting a libertarian, smaller-government-is-better approach to repairing and modernizing the nation's transportation systems, Bush sought to shift more responsibility to state and local governments and encouraged the use of tolls and private enterprise to pay for it.

Obama is not necessarily against such arrangements. He just thinks the national government should play the leading role in a transportation network on which the country and its economy depends.

"Now is the time to invest in our future and strengthen our core infrastructure," Obama said in an October letter to a coalition of groups interested in transportation and environmental issues. "With unemployment rising, these investments are even more important."

Obama takes office as many critical transportation issues are coming to the fore, creating what some experts see as a once-in-a-generation opportunity to remake national policy.

"What's very hopeful about this president, when it comes to infrastructure, is he's prepared to think big," said Janet Kavinoky, chief transportation lobbyist for the U.S. Chamber of Commerce. She said there is broad political support for major changes in transportation policy.

Obama's transition team is working with congressional Democrats on an economic aid bill that could total as much as $500 billion. The hope is to have it ready for the new president to sign when he takes office Jan. 20.

While details have not been finalized, the bill is expected to include tens of billions of dollars for highway, mass transit, airport, and intercity passenger and freight rail improvements.

Bush's transportation philosophy "seemed to be, `This is what the federal government should be responsible for and nothing else.' And the `nothing else' category was public transportation," said William Millar, executive director of the American Public Transportation Association, whose members include transit agencies.

Obama, on the other hand, has described himself as a strong advocate of mass transit.

While Bush proposed what some lawmakers described as "starvation budgets" for Amtrak, Obama has pledged support for the passenger rail carrier and for developing a national network of high-speed passenger trains.

The Bush administration has feuded bitterly with air traffic controllers since the Federal Aviation Administration imposed a contract in 2006. Obama has promised to appoint an FAA administrator who will work cooperatively with controllers.

Bush tried to ease cross-border trucking between the U.S. and Mexico, angering domestic truckers who fear the competition and say safety would be compromised. Obama promised the International Brotherhood of Teamsters to aggressively inspect cross-border trucks and buses and enforce safety regulations.

Obama's transportation goals face several potential roadblocks.

The federal program that provides aid to states for highway construction and transit expenses expires on Sept. 30, 2009. The current program was funded at $286 billion over five years. Its cost is mainly underwritten by the federal 18.4 cents-per-gallon gas tax, but revenues have failed to keep up with obligations.

Last January, a blue-ribbon transportation commission recommended increasing the gas tax as much as 40 cents a gallon over five years. The additional money would to help cover the federal share of an estimated $225 billion the commission says is needed each year to upgrade transportation systems.

Boosting the gas tax carries political risks. The last time it was raised, a backlash against Democrats in the 1994 elections helped Republicans capture control of the House and Senate. Obama has expressed concern about raising taxes in the current economic climate.

Even without an increase, Obama will have to deal with environmentalists who want to undo a bargain struck during the Reagan administration that funnels roughly 80 percent of gas tax revenue to highway projects and 15 percent to transit. They want to redirect money away from highways to alternatives such as transit and intercity passenger trains.

Obama's energy plan calls for saving as much oil as the U.S. currently imports from the Middle East and Venezuela within 10 years, which is about 3.5 million barrels a day.

"That's going to require a pretty robust program to save oil, which means not just better vehicle technology and not just alternative fuels. ... Something will have to be done about transportation policy," said Deron Lovaas of the Natural Resources Defense Council.

"The question is, does it make sense if energy security is an overarching national commitment to stick to ... a 25-year-old deal?" Lovaas said. "I think the answer is, `No.' That's going to be an enormous fight."

Jobless claims jump to 573,000, a 26-year high

The U.S. labor market weakened further last week, with the number of first-time filings for state unemployment benefits jumping by 58,000 to a 26-year high of 573,000, the Labor Department reported Thursday.

The number of people collecting unemployment benefits rose by 338,000 to stand at 4.43 million, also the highest since late 1982. The increase in continuing claims in the week ended Nov. 29 was the most since 1974.

The jobless claims report shows businesses are laying off workers at a rapid pace, and finding employment is ever harder for those who've lost their jobs. Read the full jobless data report.

Compared with the same week a year ago, new jobless claims are up about 59%, while continuing claims are up 58%.

Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs.

Several technical factors could have boosted initial claims last week, a Labor Department spokesman said. The week after Thanksgiving is traditionally the one with the biggest increase in first-time claims, and the government's seasonal adjustment factors may be overstating the increase this year.

Part of the increase in filings last week could simply be administrative catch-up from Thanksgiving week, when most state unemployment offices were closed for two days.

Worsening trend

Technical factors aside, the report shows a marked deterioration in the labor market. The four-week moving average of new claims -- which tends to smooth out the impact of any special factors -- rose by 14,250 to 540,500, also the highest since late 1982.

The four-week average of continuing claims rose by 131,000 to 4.13 million, the highest since early 1983. "This number suggests that the national unemployment rate will rise to 7.0% or more in December, versus 6.7% in November," wrote analysts for Ried Thunberg ICAP.

The insured unemployment rate -- the proportion of covered workers who are receiving benefits -- increased by two-tenths of a percentage point to 3.3%, the highest in 16 years.

Next week's report on initial claims will cover the same week in which the monthly survey is conducted."The current four-week moving average of initial claims, at 540,000, is consistent with about a 500,000 monthly drop in nonfarm payrolls," wrote Joshua Shapiro, chief economist for MFR Inc.

In November, 533,000 nonfarm payroll jobs were lost, the most for a single month since 1974. The economy has shed 1.9 million jobs since the recession began in December 2007.

"If this pace is sustained, then it would suggest that November's net job loss of 533,000 was not an outlier but perhaps an indicator of more severe deterioration to come," wrote Andrew Gledhill, an economist for Moody's "What is troubling is that labor market conditions have usually not deteriorated by this much by this early in a downturn."

Typically, state unemployment benefits run out after 26 weeks for those who are eligible. A federal law extends unemployment benefits for an extra 13 weeks under the separate federal program.

Benefits are generally available for those who lose their full-time job through no fault of their own. Those who exhaust their unemployment benefits are still counted as unemployed if they are actively looking for work.

In another economic report Thursday, the Labor Department said import prices fell a record 6.7% in November as imported oil prices fell a record 25.8%.

Separately, the Commerce Department said the nation's trade deficit widened to $57.2 billion in October.

Wednesday, December 10, 2008

Zollars: Labor Pact Levels Field

YRC Worldwide Chairman, President and CEO William D. Zollars said the money saved by the wage concessions sought from the Teamsters union will level the playing field between his company and its nonunion competition.

"This pretty much wipes out the difference between union and non-union in our industry, in terms of our cost-base," Zollars said in an interview this morning with CNBC.

YRC is seeking a 10 percent wage cut from its Yellow Transportation, Roadway, Holland and New Penn subsidiaries and a suspension of cost of living adjustments. In exchange, Teamsters employees would receive a 15 percent ownership stake through YRC stock. YRC estimates the cost savings from the modifications to the National Master Freight Agreement at $220 million to $250 million annually. A vote on ratification of the agreement by union members is scheduled for later this month.

Zollars said freight levels declined in "double digits" compared with a year ago.

"It's a pretty ugly situation out there. We're just putting ourselves in a position to be able to make it through no matter how bad it gets." (Click here for video)

JC Penney Drops Oak Harbor Freight Lines as Shipper

Move Is Response To Labor Rights Violations

National retailer JC Penney has stopped using Oak Harbor Freight Lines to ship its merchandise in the western United States. This decision comes on the heels of a report by the International Labor Rights Forum, which found that Oak Harbor Freight Lines has violated international labor rights standards. Teamster members employed by Oak Harbor Freight have been on strike since Sept. 22 because of violations of federal labor laws that protect workers' rights, such as coercing and threatening employees, and making unlawful changes to working conditions.

Oak Harbor is a trucking firm headquartered in Auburn, Wash., and is one of the largest regional freight carriers in the Northwest. The report ( found that:

-- African-American and female replacement employees working at Oak Harbor have suffered discrimination in their work assignments;

-- Oak Harbor's decision to permanently replace its employees was a tactic to interfere with a legitimate union's attempt to bargain a new collective agreement;

-- Oak Harbor hired a subcontractor, Jim Rexroat, who has used unethical and unlawful business practices, including deceptive hiring practices and failing to pay workers the wages they were promised; and

-- Oak Harbor's decision to eliminate health coverage for its retired employees is incompatible with the ethical principles to which the company claims to adhere.

In response to the workers' strike, now in its 12th week, the company unilaterally stopped paying for health care benefits for current workers and retirees.

Other retailers, after learning of the workers' rights violations, also fired Oak Harbor. The retailers include REI, Urban Outfitters and Gap.

"We are pleased that JC Penney has made the socially responsible decision to cease working with a company that has so blatantly violated workers' rights," said Tyson Johnson, Teamsters International Vice President and Freight Division Director. "We will continue to take our message to Oak Harbor's customers and bankers until they stop these abuses. Oak Harbor should be willing to negotiate with our workers in good faith and allow for a dignified retirement."

Wholesale inventories, sales plunge in October

Wholesalers cut back on their inventories in October by the largest amount since the period following the 2001 terrorist attacks while they watched their sales plunge by a record amount.

Analysts predict more grim news in the months ahead as the current recession deepens.

The Commerce Department says wholesalers, the companies in the supply chain between manufacturers and retailers, reduced their inventories by 1.1 percent in October, the biggest cutback since a similar drop in inventories in November 2001.

The inventory decline was much bigger than the 0.2 percent decrease economists expected.

Sales at the wholesale level plunged by 4.1 percent in October, the largest decline on record.

Tuesday, December 09, 2008

Drivers consider wage cut to aid trucking company

About 80 members of Teamsters Local 397 will be among union members nationwide who will vote on a 10 percent wage reduction as part of economic relief plan for YRC Worldwide Inc., a trucking company.

Local 397 President Ronald Gibbs said union leadership is recommending approval of the plan because of the financial problems faced by YRC Worldwide during the current economic downtown.

The company has lost about 80 percent of its stock market value over the past year. As a result, banks have mandated virtually all of its assets be pledged to cover current debt. That means the company can't borrow more and could face a liquidity crisis in 2009, the union said.

About 40,000 Teamster members are employed at the affected YRC Worldwide units -- Yellow Transportation, Roadway, Holland and New Penn. About 80 truck drivers from Erie and Crawford counties are represented by Local 397.

If approved, the wage reductions will remain in effect until the current Teamsters contract expires in 2013.

In return for the wage concessions, Gibbs said Teamsters members will receive an equity stake in the company. Nonunion employees would receive the same or greater percent reduction in total compensation.

The estimated savings is $220 million to $250 million a year.

Ballots are now being mailed to union members and are to be counted on Dec. 30. The reductions are expected to go into effect Jan. 1.

Monday, December 08, 2008

USF Glen Moore Hires Drivers

USF Glen Moore, the truckload component of YRC Worldwide, is hiring drivers while the rest of the company makes major cutbacks and the Teamsters make concessions in order to preserve jobs in the company's less-than-truckload units.

USF Glen Moore said it is expanding in its national division as well as two of its regional divisions and the team-driver division. The Southeast and Northeast regions are both looking for truckload drivers.

In an ad on the trucking Web site, USF Glen Moore offered "great miles, great culture and industry competitive mileage rates" along with a benefits package for solo and team company drivers with a year's experience and a hazardous materials endorsement.