Paff called the ABF suit a “propaganda ploy” that could
actually succeed in scaring the rank and file to agree to contract terms favorable to the company. Jindel took the opposite view, arguing the specter of legal action against the
Teamsters doesn’t create an atmosphere conducive to a productive dialogue.
Already burned once, ABF announced in August that it
would end its involvement in the NMFA and bargain independently with the Teamsters. The company is also unlikely to agree to the union’s Nov. 29 proposal, preferring a
longer-term contract with little or no hike in wages.
PENSION HEADACHES
ABF’s chief headache has been the 8 percent compound
annual increase in its union pension contributions negotiated in the 2008 contract. The headache turned into a
migraine in 2009 after the separate agreements between the
union and YRC allowed the carrier to suspend pension payments from the end of 2009 through mid-2011, and then to
resume contributions at about one-fourth the rate in place
prior to the suspension. YRC is not expected to return to a
full payment schedule until 2015, at the earliest.
Paff estimates that the pension expense today accounts
for as much as two-thirds of the $11 to $12 an hour cost
gap, per employee, between YRC and ABF.
What’s more, ABF participates in about two-dozen union
multiemployer pension plans, where the pensions of
retirees from failed trucking companies are paid for by surviving firms. About half of ABF’s pension expense is for
workers who were never employed at the company, according to data from investment firm Stifel, Nicolaus & Co. The
millstone around ABF’s neck is the result of a multitude of
unionized trucking bankruptcies over the last 30 years that
stuck surviving companies with a larger share of the pension tab.
The company has sought legislative relief on the issue,
but none has come to pass. It could negotiate a withdrawal
from multiemployer pension schemes, but the exit would
come at a price. It would cost ABF about $1.7 billion to pull
out from its largest multiemployer plan, the Teamsters’
Central States plan, according to recent estimates from
investment firm Robert W. Baird & Co.
Paff said there’s virtually no chance ABF employees will
agree to concessions equal to the current differential with
YRC. However, some help for the company may be on the
way. The Central States plan has agreed to freeze the company’s contributions at current levels through the life of the
next contract. In addition, the rank and file will likely
accept very small wage increases in any new contract,
though the company will still have to make healthy contributions to the workers’ health-care plan, Paff said.
Those factors, combined with the specter of YRC’s
resuming regular pension contributions by mid-decade—
assuming it will have the resources to do so—should narrow the cost gap between the two carriers. ;
