Union employees represented by the International Brotherhood of Teamsters have voted overwhelmingly to modify the current labour agreements for YRC Worldwide's Yellow Transportation, Roadway, Holland and New Penn business units
The modified contract includes a 10% reduction in all wages paid, inclusive of scheduled increases, and the suspension of cost of living adjustments (COLA) for the remaining life of the contract
In exchange, Teamsters employees will receive a 15% ownership stake in YRC Worldwide, allowing them to share in future company performance
Contributions to the health, welfare and pension plans will continue as previously negotiated
Non-union employees will experience the same or greater percentage reduction in total compensation as their union counterparts, including modifications made last year to the non-union pension, retirement and other benefit programs
Non-union employees have also received options to purchase up to a 7% ownership stake in the company
Senior executives will reduce total compensation, but will not be eligible to participate in the stock option program
YRC chairman, president & CEO Bill Zollars commented: "During a time of economic hardship, we are proud of the understanding and support of our employees The amended contract will provide our company with significant annual cost reductions that will also have long-term benefits as the economy recovers"
YRC expects to achieve $220 - $250 million in annual savings from its labour contract modification during the remaining term of the contract, in addition to the $75 to $85 million in savings in 2009 from the non-union compensation reductions that were effective January 1st, 2009
The company also expects to improve 2009 operating income by a run rate of $200 million from the integration of the Yellow Transportation and Roadway networks, which is expected to be complete in early spring 2009
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