Thursday, January 18, 2018

Teamsters leaders, ABF agree on relief plan


Wednesday, April 21, 2010
The plan has safeguards for ABF Teamsters, including triggers to reduce the wage reduction in 2011-2012 or terminate the plan if certain benchmarks are reached indicating a financial turnaround for the company, the union said.
The plan has safeguards for ABF Teamsters, including triggers to reduce the wage reduction in 2011-2012 or terminate the plan if certain benchmarks are reached indicating a financial turnaround for the company, the union said.

WASHINGTON — Teamsters local leaders on April 19 “overwhelmingly” endorsed a plan to reduce wages15 percent at ABF Freight System Inc., the less-than-truckload carrier that has seen its historically strong financial position eroded by the recession. The union says the deal will protect thousands of members’ jobs and benefits.

“Local union leaders understand that we need to take a bold step to help ABF get through this terrible economy and that we must act now to prevent far worse problems down the road,” said Tyson Johnson, director of the Teamsters National Freight Division, in a statement posted on the Teamster Web site. “No one wants to see wage cuts, but this agreement protects our ABF members’ jobs and their health, welfare and pension benefits.”

The union has independently verified the company’s financial situation, Johnson added.

The plan has safeguards for ABF Teamsters, including triggers to reduce the wage reduction in 2011-2012 or terminate the plan if certain benchmarks are reached indicating a financial turnaround for the company, the union said.

The plan also calls for equal sacrifice among all union and non-union employees. Additionally, the union said it will have access to the company’s financial records and the right to have an annual audit done.

Ballots are scheduled to be mailed out to members on or about April 30, and ballots are tentatively scheduled to be counted on May 21. About 7,000 Teamsters are actively employed at ABF while another 1,200 are on recall, the union said.

“People realize something needs to be done sooner rather than later,” said Tim Nichols, president of Local 878 in Little Rock. “If we fail to take action now, we face a situation later where we may be hanging curtains on a house that’s on fire, and nobody wants that.”

Another local leader compared the situation to that of YRC Worldwide, the giant LTL carrier that flirted with bankruptcy last year, despite numerous union concessions.

“It’s good that our members have the opportunity now to stop the bleeding at ABF to avoid the kind of problems that occurred by waiting longer at YRC, where our members had to sacrifice a great deal more,” said Randy Cammack, secretary-treasurer of Local 63 in Covina, Calif.

ABF lost $99.9 million in 2009 after a $49 million profit in 2008 — almost a $150 million negative swing, the union noted, while revenue was down 21 percent.

The union estimates the company continues to lose more than $10 million per month in 2010 and liquidity continues to worsen.

The company says management is hopeful workers will endorse the plan, and notes the proposal includes performance-based incentives, where employees will receive cash payments every calendar quarter for which the company's public operating ratio is better than 99 percent.

“We are cautiously optimistic about the potential for ratification,” said ABF spokesman Danny Loe. “We believe that the facts supporting ABF’s need for ratification of this agreement are compelling and that our employees will understand the need for ratification.”

An FBR Capital analyst upgraded shares of Arkansas Best Corp. to “Market Perform” from “Underperform,” saying the tentative deal will indeed help hold up the trucking company’s bottom line.

FBR analyst Christian Wetherbee also raised his price target to $34 from $29, citing a much-improved profit outlook for 2011.

Elsewhere, Dahlman Rose analyst Jason Seidl said in a note to clients, “If these estimates are even only remotely accurate, we believe Arkansas Best will report a significantly higher loss on Friday than the loss per share expected by (Wall) Street. Unfortunately for Arkansas Best, the worse things look in the first quarter, the higher the chances this agreement passes with union members.”

Kevin Jones of The Trucker staff can be reached for comment at kevinj@thetrucker.com.

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