Teamsters employed by ABF Freight System have accepted near-term concessions in approving a five-year contract with the trucking company, but some conditions of the contract have yet to be approved. If completed, the new contract will replace one that expired March 31st. The former contract has been extended until the new one can be finalized.
The framework of the new contract includes wage reductions and changes in work schedules until July of 2014. After that, wages will begin to rebound:
The wage reduction, a key negotiation point pushed by ABF Freight officials, schedule provides for a 7% cut beginning in the pay period following contract ratification. But beginning July 1, 2014, wages are increased 2%. Wages again increase 2% on July 1, 2015, up 2% on July 1, 2016, and up 2.5% on July 1, 2017.
Arkansas Best officials have said that wage cuts were necessary for the company to return to profitability.
The company reported on April 30 a first quarter 2013 loss of $13.4 million. The loss of 52 cents per share was higher than the consensus analyst estimate of a loss of 41 cent per share. Revenue during the quarter was $520.7 million, well ahead of the $440.9 million during the same quarter in 2012.
The quarter followed a 2012 that saw the Fort Smith-based transportation holding company post a $7.7 million loss, a wide swing from the $6.159 million gain in 2011. Arkansas Best has been unable to post two consecutive years of income gains since 2008.
Gordon Sweeton, co-chairman of the National ABF Negotiating Committee, praised the Teamsters for taking cuts in a statement:
“We understand the sacrifices our ABF members are making. We will work on obtaining approval of those supplements that were not approved. … Once ratified, the national contract will protect our members’ health, welfare and pension benefits and will also give the company the ability to compete in a very tough trucking environment, which is good for ABF and the long-term job security of our members.”
Roy Slagle, ABF Freight System President and Chief Executive Officer, echoed the sentiment:
“We are very pleased that our Teamster employees have ratified the ABF NMFA, which is a critical step to putting ABF back on the path to profitability while still preserving the best-paying jobs and benefits in the industry. We know this was a difficult decision for our union workforce, following many sacrifices made in recent years by our non-union employees, and we look forward to resolving the remaining supplements in the near term.”
The relationship between the Teamsters and ABF has been tumultuous at times as bankruptcy concerns have mounted. The Teamsters, though, have continually made concessions to help the company stay afloat. This has included granting the company the flexibility to use non-union truckers to capture business or “reduce empty miles.”
A statement from the Teamsters suggests their members approved 21 of the 27 supplements included in the contract. Those that still need to be agreed upon pertain to local work rules and “technical items.” These must be agreed upon before before the national agreement can be implemented.