ABF Freight System Inc. employees, represented by the International Brotherhood of Teamsters, ratified a national collective bargaining agreement Thursday that will be in effect for the next five years.
The agreement calls for a 7 percent wage reduction and a loss of one week’s vacation for all employees, but preserves health, welfare and pension plans.
“We are very pleased that our Teamster employees have ratified the [National Master Freight Agreement], which is a critical step to putting ABF back on the path to profitability, while still preserving the best-payingjobs and benefits in the industry,” Roy Slagle, president and chief executive, said in a news release.
Though the national agreement was approved, six local supplements were rejected. Kathy Fieweger, spokesman for ABF Freight System Inc., said the supplements pertain to technical matters in specific areas and do not affect the majority of workers.
Fieweger said 6,100 ballots were cast and 52 percent of union members voted for the national agreement.
Spokesmen from the International Brotherhood of Teamsters and ABF Freight System Inc. declined to comment on negotiations.
The Fort Smith-based trucking company contended that the changes were necessary because it has lost more than $250 million since 2009 and posted a first quarter loss of $22.5 million.
In a summary of the agreement, the Teamsters union said it audited the company’s financial reports, finding it “simply unrealistic to conclude that ABF’s mounting losses would reverse without some level of employee sacrifice.”
In the summary, Teamsters said benefits were a priority. The union secured a profit-sharing agreement where bonuses are paid if the company’s operating ratio, a measure that compares operating expenses with net sales, falls below 96.
Though pay was cut by 7 percent, wages will increaseby 2 percent in July 2014, 2015 and 2016. In 2017, wages will increase 2.5 percent, according to the summary.
“This was a really happy ending for such a long negotiation,” said Lane Kidd, president of the Arkansas Trucking Association. “Everyone would have suffered if negotiations had broken down and there was a work stoppage.”
Kidd said ABF Freight has low employee turnover, which indicates higher-than-average wages. He said some competitors, like YRC Worldwide Inc., are also unionized, though union membership in the trucking industry has declined since the 1980s.
In Friday trading, Arkansas Best Corp. gained nearly 15 percent to close at $22.95, a twoyear high.
“It obviously looks like good news for the company and should bode well for the future,” Kidd said.
Business, Pages 25 on 06/29/2013