Implementation of the National Master Freight Agreement between Teamster employees and ABF Freight System Inc. of Fort Smith continues to be delayed because of failure to pass supplemental contracts.
Employees in two regions - Central Region Local Cartage and the Western States Office Employees Part V - voted for a second time not to accept the supplemental terms. Five other groups approved their supplemental contracts in a second vote, but the five-year master freight agreement - which was approved in July - cannot go into effect until all supplemental deals are in place. That means employees will not see increases to health, welfare and pension benefits until an agreement can be reached with the remaining two holdouts.
Arkansas Best Corp., parent company of ABF Freight System, indicated in a Securities and Exchange Commission filing on Thursday that the two sides would meet “in the near term” to address the two remaining supplemental agreements. Neither ABF nor the Teamsters would comment on what the timetable for that meeting would be or where it would occur.
More than 6,000 of the company’s 7,500 union employees approved the ABF National Master Freight Agreement in June, ending six months of negotiations. Talks between the trucking firm and the union began in December, and the two sides have agreed to multiple, temporary extensions of their current contracts, including one that is set to expire on Saturday.
If no progress is made when representatives of both sides meet to discuss the two remaining supplemental deals, then the option exists for the union to conduct a vote that would authorize a strike, according to Ken Paff, national organizer for the Teamsters for a Democratic Union, a watchdog organization.
“They’re saying they’re going to vote until the company gets it right,” Paff said. “If the workers hold out long enough, it will hold out to a strike vote.”
A post on the Teamsters for a Democratic Union website, citing Article XII, Section 2 of the union’s constitution, indicates that “the master national negotiating committee shall return to the bargaining table and attempt to address the issues. … In the event no new tentative agreement is reached, or if the members reject the new tentative agreement, the master committee shall conduct a strike authorization vote.”
Finalizing contracts with the Teamsters is seen as an important piece of the puzzle for Arkansas Best Corp.’s overall financial picture. Throughout the negotiations the company has said that the new deal would help return the company to “historic profitability.” Included in the master freight agreement was an initial 7 percent wage reduction that the Teamsters have said they expected to entirely recoup by the fifth year.
Arkansas Best Corp. reported net income of $4.9 million for the second quarter, a 58 percent drop from the same period last year. While overall revenue was up, 13 percent to $576.9 million, Arkansas Best reported $17 million in year-to-date losses during the Aug. 9 earnings call.
Getting the contracts approved and ending negotiations with the Teamsters would be “pivotal,” Arkansas Best President and Chief Executive Officer Judy McReynolds said in a release announcing the company’s second-quarter earnings. Specifically the company is looking to cut wage and vacation costs and improve operating efficiency in union shops.
“We are all looking forward to fully wrapping up our Teamsters contract for the next five years and realizing the associated cost savings going forward,” McReynolds said in an Aug. 9 call with investors.
Arkansas Best’s stock brice was up Thursday despite the uncertainty associated with the unresolved contracts. Trading closed at $26.59 per share, up from $26.48 to close Wednesday.
Business, Pages 27 on 08/30/2013